“Rapidly changing” consumer demands are putting strain on FMCG supply chains and industry needs to “accelerate how we respond to that”.
Gavin Chappell, commercial services director at Asda, told the IGD Supply Chain Summit in London yesterday firms needed to “collaborate on the big issues”.
“Consumers are rapidly changing the way they want to interact with us as an industry,” he said. “Consumers are demanding more and more transparency about how their food supply chain operates. We need to accelerate how we respond to that.
“Transparency cannot be solved by any one part of the supply chain.”
Chappell, who is also co chair of ECR UK, an industry body working to improve supply chain efficiency, said the sector was on track to meet a target of reducing waste in the supply chain by 200,000 tonnes by the end of 2014.
Karen Whitworth, director of supply chain operations at Sainsbury’s, said the overall market was in decline, shoppers were more “savvy”, and online shopping and the rise of convenience stores had “changed the supply chain”.
“Thinking of new innovative ways of sourcing is becoming more difficult but more important,” she said.
Whitworth said building “trusting partnerships” with suppliers was critical.
“If we are not clear with our suppliers with what we want from them, how are they going understand us? How are they going to make us happy?” she said.
She said a 25 per cent increase in a product’s life, through less time spent in storage for example, resulted in a 4 per cent increase in availability and a 3 per cent drop in waste.
Sue McGeorge, GB supply chain director for Diageo, said they had moved from a “one-size-fits-all” supply chain to one “tailored to the particular characteristics of the brand”, including the development of a portable packaging line built in a shipping container that can be dropped anywhere. “You plug it into local utilities and you’re up and ready to go,” she said.
Malcolm Basey, supply chain director at Morrisons, said they were planning to work more collaboratively with suppliers and move to a “stockless environment” for some products. “This will require high levels of performance for those suppliers involved,” he said.