Changing the culture of a business is critical to success in the digital world, according to the supply chain boss at Unilever.
Marc Engel, chief supply chain officer at the FMCG giant, said organisations today faced the choice of either “disrupt or be disrupted.”
Speaking at the Gartner Supply Chain Executive Conference in London, Engel said: “Unless you change the human culture that’s running the digital stuff you are not going to become digital and you’re not going to win.”
Engel said the three pillars of the traditional FMCG model – mass communication, mass distribution and mass production – had altered dramatically.
Mass communication, exemplified by the creation of soap operas in the 60s by FMCG firms to create advertising audiences, was no longer relevant when “no one watches TV”.
“New FMCG is about focused communications to consumers and building a relationship with them,” he said.
Engel said online retailers such as Amazon and JD.com provided distribution networks that meant small firms could compete with much larger and more established companies.
And he said mass production was being replaced with small volume, customised products.
“The three fundamental building blocks are changing fast,” he said. “Scale is no longer a competitive advantage.”
Engel said Unilever had turnover of €53.7bn in 2017, with an annual procurement spend of €34m. It works with 488 third-party manufacturers and has 306 factories in 67 countries.
He said the traditional 40-year career that existed when people started working in the 50s and 60s was no longer relevant because of the pace of technological change.
“If we don’t get into a new mindset of learning, unlearning and relearning, we will be failing in our mission,” he said. “How comfortable are you with upgrading yourself?”
Engel said it was important to question your own ways of working.
“Disrupt or be disrupted,” he said. “How can you disrupt yourself, rather than say, ‘This is not broken so don’t fix it’. If you don’t break it someone else will.”