Increased Risk Leads FMCG Supply Chain to Collaborate More Than Ever Before - Industry Poll Reveals

When asked how the level of supply chain collaboration with key customers has changed over the last two to three years, 80% said that it had increased.

4/5/2011 --- More than a fifth (22%) of FMCG suppliers say they have a strategic supply chain relationship with their key customers, according to an industry poll conducted by international FMCG experts IGD, unveiled at the ECR Europe conference. This is up from 15% in 2009.

When asked how the level of supply chain collaboration with key customers has changed over the last two to three years, 80% said that it had increased. Although the level of collaboration is rising, there are still nearly twice as many (40%) suppliers with only a transactional relationship with customers.

The poll, conducted among 154 consumer goods manufacturers around the world, also found:
• 75% believe risk in the supply chain has increased over the last two to three years
• 61% say the supply chain function plays a more strategic role within the business compared to a year ago
• 50% cite cost reduction as the main challenge facing supply chains

Tarun Patel, head of supply chain, IGD, said: “Businesses have made a number of changes to achieve a higher level of collaboration with their key customers. Rising levels of supply chain collaboration is a direct response to increased perceptions of supply chain risk. Rising oil prices, multi-channel strategies and the challenge of meeting sustainability objectives all add to increased complexity and sophistication in the chain.

“Competitive pressures are high, and closer collaboration across the different parts of the supply chain can help everyone achieve their objectives – more efficient, responsive, flexible systems.”