EY-re-engineering-the-supply-chain-for-the-omni-channel-of-tomorrow

Re-engineering the supply chainfor the omni-channel of tomorrowGlobal consumer goods and retailomni-channel supply chain surveyFebruary 2015

-WelcomeCracking the omni-channelsupply chain codeOmni-channel has rapidly become the engine of growthin consumer goods and retail, but few companies areconfident about their ability to execute against it andmaintain margins. As the largest driver of cost, supplychain has a critical role to play in delivering profitability.Companies are struggling to adapt:• Can omni-channel be profitable?• Which consumers should be servedwith what product portfolio?• What is the role of bricks-and-mortar?• What are the barriers to omnichannelsuccess?To gain a clearer understanding of how companies are addressing these issues,EY and the Consumer Goods Forum Supply Chain Committee carried out asurvey of 42 senior supply chain executives from the world’s largest consumergoods and retail companies. This report presents the findings from the survey,a program of interviews and the views of EY leaders. Together, these outlinesome of the ways in which we believe companies need to re-engineer the supplychain for the omni-channel of tomorrow.“Omni-channel has placed supplychain firmly on the front line. Withconsumers now expecting to browse,purchase and return goods across avariety of channels, the supply chainhas to reach beyond the retail store tothe consumer’s home and dedicatedpick-up points. This requires real-time,channel-agnostic visibility of inventoryacross the supply chain and a singleview of the consumer as they hopfrom one channel to another.”John PhillipsSVP Customer Supply Chain & Go-To-Market,PepsiCo, and Co-Chair of The ConsumerGoods Forum Supply Chain Committee“Fulfilling the omni-channel promisewill require significant organizationaltransformation. Building an omnichannelcapability cannot be anafterthought. To succeed, we believecompanies must embed omni-channelinto their strategy, transform theirsupply chain to be truly agile andresponsive, and build robust data andanalytics capabilities.”Andrew CaveneyGlobal Leader, Supply Chain & OperationsEYDavid JonesSupply Chain Director, Waitrose, and Co-Chairof The Consumer Goods Forum SupplyChain Committee02

-Welcome+Overview+Case for change+Call for action+About the survey+ContactCracking the omni-channelsupply chain code+Surveyparticipants(companies)+Participantdemographics+AboutConsumerGoodsForum+About EYsupply chainservicesOmni-channel has rapidly become the engine of growthin consumer goods and retail, but few companies areconfident about their ability to execute against it andmaintain margins. As the largest driver of cost, supplychain has a critical role to play in delivering profitability.+OverviewLearn more+Call foractionLearn more+Case forchangeLearn more+About thesurveyLearn moreCompanies are struggling to adapt:Survey participants (companies)We surveyed 42 senior supply chainexecutives from the world’s largestconsumer goods and retail companiesand The Consumer Goods Forumsupply chain network. The survey wassupplemented with in-depth interviewswith select companies who hadcompleted the survey. A number ofcompanies represented in the researchare noted alongside.• Can omni-channel be profitable?• Which consumers should be servedwith what product portfolio?AB Vassilopoulos To gain a clearer understanding of how companies are addressing these issues,ÆON Co., EY Ltd. and the Consumer Goods Forum Supply Chain Committee carried out aCencosud survey S.A. of 42 senior supply chain executives from the world’s largest consumerGALERIA goods Kaufhof and GmbH retail companies. This report presents the findings from the survey,GSK Consumer a program Healthcare of interviews and the views of EY leaders. Together, these outlineL’Oréal some of the ways in which we believe companies need to re-engineer the supplyMars, Incorporated chain for the omni-channel of tomorrow.Mondelēz InternationalNestlé SA“Omni-channel has placed supply “Fulfilling the omni-channel promisePepsiCo, Inc.chain firmly on the front line. With will require significant organizationalThe Kroger Companyconsumers now expecting to browse, transformation. Building an omnichannelcapability cannot be anThe Procter & Gamble Companypurchase and return goods across aUnilever PLCvariety of channels, the supply chain afterthought. To succeed, we believeWaitrosehas to reach beyond the retail store to companies must embed omni-channelthe consumer’s home and dedicated into their strategy, transform theirTo find out more, please clickpick-up points. This requires real-time, supply chain to be truly agile andchannel-agnostic visibility of inventory responsive, and build robust data andacross the supply chain and a single analytics capabilities.”view of the consumer as they hopfrom one channel to another.”02John PhillipsSVP Customer Supply Chain & Go-To-Market,PepsiCo, and Co-Chair of The ConsumerGoods Forum Supply Chain CommitteeDavid JonesSupply Chain Director, Waitrose, and Co-Chairof The Consumer Goods Forum SupplyChain Committee• What is the role of bricks-and-mortar?• What are the barriers to omnichannelsuccess?Andrew CaveneyGlobal Leader, Supply Chain & OperationsEYPrint PDF

-OverviewConsumer goods and retail companies must re-engineerthe supply chain if omni-channel is to be profitableBackNextEmbraceomni-channelas the criticaldriver of growthBricks-and-mortarwill generate81% of revenuesin five years, downfrom 93% todayEmbedomni-channelsupply chain strategyin the corporatestrategy81%believe the supplychain is not fitfor purpose foromni-channelOmni-channelgrowth risks dilutingmargins in the sector;only 38% say omnichannelinitiatives aremargin-accretivePrioritize agilityand responsivenessin omni-channelsupply chaindesignRe-engineerthe supply chainto deliver omnichannelgrowthprofitablyCollaboratewith value chainpartners to enableseamless datavisibility andactionableinsightEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow03

+Welcome+Overview-Case for change+Call for action+About the survey+ContactOmni-channel growth will dilute marginsunless the supply chain changesBack1 of 5NextKey takeawaysThe traditional consumer goodssupply chain is not fit for purposeand must be re-engineered.Bricks-and-mortar stilldominates, but omni-channelis critical for growth.Omni-channel growthrisks dragging downcorporate profits.Omni-channel is the critical driver for growthOmni-channel represents the biggest growthopportunity for the consumer goods and retail industry.Although 74% of senior supply chain professionalssurveyed for this report think store-based sales willDefining continue to dominate omni-channelin the next five years, 88% believethat consumer goods firms can no longer rely ontraditional sales channels to drive growth. Annual globalThe consumer store-based growth just wants is forecast to to shop be just 5% between2014 and 2019, compared to online growth of 15%. 1An omni-channel In emerging strategy markets, is the one gap that between provides store-based anda seamless online and growth consistent will be shopping even greater. experienceacross different channels and devices. From asupply chain perspective, this means that there2014-2019 total retail sales by channel CAGR %is complete visibility across channels, along witha holistic, unified view of the path to purchase.15%InternetStore-based5%13%2%14%3%12%2%12%4%12%7%21%8%40%10%79%18%Percentage of respondentswho believe:Consumer goods firms can nolonger rely solely on traditional saleschannels to drive future growth.88%86%90%Store-based sales will continue todominate in developed markets inthe next five years.74%86%62%TotalRetailConsumer packaged goodsmanufacturers (CPG)+Definingomni-channelLearn moreWorld France Germany UK US Brazil China India NigeriaDevelopedEmergingFrontier1Source: Euromonitor.com+Internetgrowth bycategoryLearn moreMenu• Can companies afford omnichannelto be a drag on profits?• The traditional supply chain isno longer fit for purpose.EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow04

+Welcome+Overview-Case for change+Call for action+About the survey+ContactOmni-channel growth will dilute marginsunless the supply chain changesBack1 of 5NextKey takeawaysOmni-channel represents the biggest growthopportunity for the consumer goods and retail industry.Although 74% of senior supply chain professionalsThe traditional consumer goods surveyed for this report think store-based sales willGlobal internet retailsupply chain is not fit for purpose continuemarketto dominatesize and growthin the nextby categoryfive years, 88% believe2014 market size, US$b that consumer goods firms can no longer rely onand must be re-engineered.180traditional sales channels to drive growth. Annual globalstore-based growth is forecast to be just 5% between1602014 and 2019, compared to online growth of 15%. 1footwear140In emerging Consumer markets, the gap between store-based andBricks-and-mortar stillelectronicsonline growth will be even greater.dominates, but omni-channel 120Media productsis critical for growth.1002014-2019 total retail sales by channel CAGR %Omni-channel growthrisks dragging downcorporate profits.Omni-channel is the critical driver for growthFood and drink is forecasted to be thefastest-growing category via internet retail80Apparel and60InternetConsumerStore-basedappliancesFood and drink21%Personal accessories40and eyewear20Homewares 15% and13%14%home furnishings Beauty and personal care12% 12% 12%010%//8%0 10 12 14 16 7% 18 20Source: Euromonitor5%3%4%2%Forecast growth2%2014-2019, CAGR %40%79%18%Percentage of respondentswho believe:Consumer goods firms can nolonger rely solely on traditional saleschannels to drive future growth.88%86%90%Store-based sales will continue todominate in developed markets inthe next five years.74%86%62%TotalRetailConsumer packaged goodsmanufacturers (CPG)+Definingomni-channelLearn moreWorld France Germany UK US Brazil China India NigeriaDevelopedEmergingFrontier1Source: Euromonitor.com+Internetgrowth bycategoryLearn moreMenu• Can companies afford omnichannelto be a drag on profits?• The traditional supply chain isno longer fit for purpose.EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow04

-Case for changeOmni-channel growth will dilute marginsunless the supply chain changesBack2 of 5NextOmni-channel is thecritical driver of growthSurvey respondents confirm thatwhile bricks-and-mortar is still thedominant channel for most, theproportion is falling rapidly. In fiveyears’ time, bricks-and-mortarcould account for just 81%.Delegates at the Consumer GoodsForum’s annual supply chainconference felt this shift couldaccelerate even more quickly. 1Percentage of global sales generatedfrom bricks-and-mortar storesAverage annual spend ofonline and store customersvs. store only 22x1Based on live polling of 115 delegateson 25 September 2014.2Source: EY analysis from retailer annual reports.3In the UK, Argos already originates morethan 52% of sales from outside the store.93%of revenues are viabricks-and-mortarstores todayEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow81%in five years05“Omni-channel can have a compounding impact on growth.EY experience and even retail annual reports demonstrate thatcustomers who shop online and in-store spend twice as muchas those who only shop in-store.” 3Matthew BurtonEMEIA Omni-channel Leader, Supply Chain & OperationsEY

-Case for changeOmni-channel growth will dilute marginsunless the supply chain changesBack3 of 5NextHow long can companies afford to invest inomni-channel before expecting to deliver a profit?In addition to sales growth,omni-channel yields arange of benefits, includingimproved consumer insight,strengthened consumer loyaltyand competitive differentiation.However, only one-third ofrespondents expect to seeincreased profits.Percentage ofrespondents citingexpected benefitfrom operatingan omni-channelstrategy95%Strengthenedconsumerloyalty90%Createdcompetitivedifference84%Improvedconsumerinsight79%Increasedsales76%Expanded/differentiatedconsumerbase73%Increasedcross-categorysales33%IncreasedprofitEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow06

-Case for changeOmni-channel growth will dilute marginsunless the supply chain changesBack4 of 5NextCan companies afford foromni-channel to be a dragon profits?Impact on margins of respondents’omni-channel initiativesOnly 38% of survey respondents saytheir omni-channel initiatives aremargin-accretive; the remainder saythe effect is either dilutive or neutral.“If omni-channel is driving growthbut isn’t profitable, the sector risksyears of margin dilution,” says AndrewCosgrove, Global Lead Analyst,Consumer Goods & Retail at EY. “It isimperative that companies transformtheir operating models to make omnichannelwork both for the consumer,but also for financial performance.”AccretiveNeutralDilutive36%26%38%There are various reasons whycompanies struggle to make omnichannelprofitable. “The sheer paceof change and mad dash to sellproducts online has resulted in illconsideredand irrational behavior,”says a consumer goods global supplychain leader. “Many companies haveaccepted poor terms, with little orno visibility of how products are soldand limited collaboration betweenmanufacturers and retailers.”In their rush to develop e-commercecapabilities, companies have oftenbolted on systems and processeswithout fully considering integrationwith traditional store fulfillment. Asa result, supply chains are inefficientand there is a lack of visibility acrossdifferent channels.*Note: Excludes store salesEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow07

+Welcome+Overview-Case for change+Call for action+About the survey+ContactOmni-channel growth will dilute marginsunless the supply chain changesBack4 of 5NextCan companies afford foromni-channel to be a dragon profits?Only 38% of survey respondents saytheir omni-channel initiatives aremargin-accretive; the remainder saythe effect is either dilutive or neutral.“If omni-channel is driving growthbut isn’t profitable, the sector risksyears of margin dilution,” says AndrewCosgrove, Global Lead Analyst,Consumer Goods & Retail at EY. “It isimperative that companies transformtheir operating models to make omnichannelwork both for the consumer,but also for financial performance.”Impact on margins of respondents’omni-channel initiativesKey barriersRespondents highlighted five key barrierspreventing companies from maximizingthe benefits of an omni-channel supplychain strategy:1 Lack of dedicated 36% resources and capabilities38%2345Level of investment required to succeedChallenge of supply chain complexityLimitations of siloed organizational structuresLack of senior leadership supportAccretiveNeutralDilutive26%There are various reasons whycompanies struggle to make omnichannelprofitable. “The sheer paceof change and mad dash to sellproducts online has resulted in illconsideredand irrational behavior,”says a consumer goods global supplychain leader. “Many companies haveaccepted poor terms, with little orno visibility of how products are soldand limited collaboration betweenmanufacturers and retailers.”In their rush to develop e-commercecapabilities, companies have oftenbolted on systems and processeswithout fully considering integrationwith traditional store fulfillment. Asa result, supply chains are inefficientand there is a lack of visibility acrossdifferent channels.*Note: Excludes store sales+KeybarriersLearn moreEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow07

-Call for actionWhat’s needed to fulfill theomni-channel promise?BackNextKey enablersTo achieve a successful omni-channel supplychain strategy, the leaders surveyed for ourreport identified three key enablers:Omni-channel beingembedded in the overallcompany strategyHaving a responsive,combined omni andtraditional supply chaininfrastructure34%45%22%24%35%12%Only a minority ofrespondents believe theyare currently effectiveat these enablers.For example, 24% think theyare effective or very effectiveat having a responsive,combined omni and traditionalsupply chain infrastructure,and 26% having in placethe IT systems and capabilitiesto enable seamless visibilityand fulfillment.IT systems andcapabilities that enableseamless visibilityand fulfillment to endconsumers26%30%22%Percentage of respondentswho believe they are effectiveor very effective:TotalRetailCPGMost companies have a longway to go before their omnichannelstrategy and executionare mature and established.The next section outlines thesteps we believe companiesneed to take.EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow09

-StrategyCall for action - StrategyEmbracing omni-channeland embedding it in strategyBack1 of 4NextKey takeawaysOmni-channel is critical,but only 40% of respondentsthink their current executionis effective.A consumer-centricend-to-end approach toomni-channel is vital.Strong leadership is requiredto manage the transition, butmany companies consider thisto be lacking.Omni-channel cannot bean afterthoughtExecuting an omni-channel strategy is highly challenging.Companies can no longer afford to manage their channelstrategies in silos or bolt on new channels without integratingthem. To succeed, companies must embrace omni-channeland ensure that it is fully embedded in their overall corporatestrategy and organizational culture.97%of respondents indeveloped markets sayit is important to have anomni-channel strategy.40%believe their omni-channelexecution is effective.Menu?Questions for management• What does the consumer really want (products/service/channels)?• Is omni-channel a strategic imperative rather than a ‘me too’ strategy?• Are we really thinking end-to-end with one view of the consumer?EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow10

+Welcome-Strategy+Agility+Visibility+ContactCall for action - StrategyEmbracing omni-channeland embedding it in strategyBack1 of 4NextKey takeawaysOmni-channel is critical,but only 40% of respondentsthink their current executionis effective.A consumer-centricend-to-end approach toomni-channel is vital.Strong leadership is requiredto manage the transition, butmany companies consider thisto be lacking.Omni-channel cannot bean afterthought97% believe omni-channel is importantPercentage Executing of an respondents omni-channel who strategy think is it highly is important challenging. or veryimportant Companies to have can no an longer omni-channel afford to strategy manage their in developed channel marketsstrategies in silos or bolt on new channels without integratingTotal them. To succeed, companies must embrace omni-channeland ensure that it is fully embedded in their overall corporatestrategy and organizational culture.Retail97%CPG 40%of respondents inbelieve their omni-channeldeveloped markets say execution is effective.Very it is importantto have anImportant omni-channel strategy.+ Learn more+ Learn moreMenu• Omni-channel strategy mustbe consumer-centric.• Company leadership mustcommit to change.• End-to-end thinking mustbe embedded.?Questions for management• What does the consumer really want (products/service/channels)?• Is omni-channel a strategic imperative rather than a ‘me too’ strategy?• Are we really thinking end-to-end with one view of the consumer?EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow10

+Welcome-Strategy+Agility+Visibility+ContactCall for action - StrategyEmbracing omni-channeland embedding it in strategyBack1 of 4NextKey takeawaysOmni-channel is critical,but only 40% of respondentsthink their current executionis effective.A consumer-centricend-to-end approach toomni-channel is vital.Strong leadership is requiredto manage the transition, butmany companies consider thisto be lacking.Omni-channel cannot bean afterthoughtManufacturers are more confident thanretailers in their omni-channel executionExecuting an omni-channel strategy is highly challenging.Percentage Companies of can respondents no longer afford who believe to manage their their developed channel marketomni-channel strategies in execution silos or bolt is effective on new channels without integratingthem. To succeed, companies must embrace omni-channeland ensure that it is fully embedded in their overall corporatestrategy and organizational culture.97%of respondents indeveloped markets sayit Total is important Retail to have anomni-channel strategy.40%believe their omni-channelexecution is effective.CPG+ Learn more+ Learn moreMenu• Omni-channel strategy mustbe consumer-centric.• Company leadership mustcommit to change.• End-to-end thinking mustbe embedded.?Questions for management• What does the consumer really want (products/service/channels)?• Is omni-channel a strategic imperative rather than a ‘me too’ strategy?• Are we really thinking end-to-end with one view of the consumer?EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow10

-StrategyCall for action - StrategyOmni-channel strategy mustbe consumer-centricBack2 of 4NextSuccessful omni-channel strategy must start withunderstanding what consumers want and how their needsand expectations are changing. This means being clearabout what consumers really value, compared with whatthe company thinks is valuable – e.g., offering time slots andan accurate view of delivery times may be more importantthan offering same- or next-day delivery.For most companies, omni-channelinitiatives are still in the early stagesor in process. Just 5% of respondentsdescribe their omni-channel strategyas established. Given the rapid paceof omni-channel’s evolution, thislack of maturity is not surprising.Manufacturers and retailers mustconsider the needs of differentchannels and what drives consumerchoices. Designing processes tosatisfy those requirements willentail a fundamental reconfigurationof the business and supply chain.StartMaturity of respondents’omni-channel strategy0%BeginningIn processEstablished38%57%5%100%“We are at the early stage of a journey that’s going tobe as revolutionary as the introduction of supermarkets 60years ago. I have to convince the rest of the organization whatis required by omni-channel, which means spending a lot oftime with manufacturing, packaging and procurement teams.”Chris TyasGroup Head of Supply ChainNestléEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow11

-StrategyCall for action - StrategyCompany leadership mustcommit to changeBack3 of 4NextStrong leadership is critical to manage the transitionto omni-channel because the change is so far-reaching.However, more than a third of respondents cite lack ofsenior leadership support as a key barrier37%of companies say a lackExisting channel silos must bedismantled, key performance indicators(KPIs) replaced, new processes andtechnologies implemented, and P&Lsand functions aligned. Not everyonein the organization will welcome thesechanges, so leadership must create theimpetus for change, resolve conflictand overcome organizational inertia.“Getting omni-channel right isabout fundamental cultural change,”says David Jones, Supply ChainDirector at Waitrose. “You need tobreak the mindset that you’re losingsales when shoppers buy online.”Cross-functional collaboration isvital. Many existing supply chaincapabilities are still relevant but mustbe blended with new capabilities.Companies should create teams thatmix people with more ‘disruptive’capabilities and those who are morealigned with the existing model.of senior leadershipsupport for omni-channelis a key barrier.Setting the right KPIs is crucial toensure ongoing commitment.“Companies must connect the KPIs of the existing organizationto the new initiatives. A key challenge is sales attribution. Ifa shopper orders a product online and picks it up in a store,which channel is responsible for that sale? Companies need towork through these issues and ensure that channel teams worktogether, rather than competing with each other.”Andrew CosgroveGlobal Lead Analyst, Consumer Products & RetailEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow12

-StrategyCall for action - StrategyEnd-to-end thinking mustbe embeddedBack4 of 4NextCompanies need to take an end-to-end approach to theiromni-channel strategy and executionThis starts with strategic choicesabout where the company can addvalue and the creation of a businessmodel and value proposition thataligns with the needs of the consumer.Everything must be looked atthrough an omni-channel lens, fromthe product and packaging design,through promotional planning,operating model design andsupply chain.Mastering complexity can becomea source of competitive advantage.“There is an absolute differencebetween good complexity and badcomplexity,” says Chris Tyas, GroupHead of Supply Chain at Nestlé.“One of the key questions we needto answer is whether the consumervalues the complexity we add. Forexample, consumers might value thecomplexity of packaging designed foronline that takes up less space whendelivered to the home. If not, we haveto take it out.”By putting omni-channel at theheart of strategic decision-making,companies will be better placed tofulfill the omni-channel promise ofseamless integration across channels.EY’s global perspective on the importanceof “design principles”We often find that companies find it difficult to visualize whatomni-channel will mean for their business. As they make thetransition to an omni-channel world, they need to step backand establish some clear “design principles” about their omnichannelstrategy. This involves looking five years ahead toconsider how the environment and consumer behavior mightchange, and ensuring that the strategy can evolve accordingly.With a clear destination in mind, companies can put inplace the building blocks to reach that end state. This takestenacity and determination. Each of these building blockswill require investment and change management and maymean that margins are diluted in the short term. Businessleaders need to be able to communicate a clear rationale forthese decisions and ensure that the organization as a wholeis prepared to follow them, but also be willing to flex theapproach as the environment changes.Joost VreeswijkOperating Model Effectiveness LeaderEurope, Middle East, India and AfricaEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow13

+Welcome-Strategy+Agility+Visibility+ContactCall for action - StrategyEnd-to-end thinking mustbe embeddedBack4 of 4NextCompanies need to take an end-to-end approach to theiromni-channel strategy and execution.This starts with strategic choicesabout where the company can addvalue and the creation of a businessmodel and value proposition thataligns with the needs of the consumer.Everything must be looked atthrough an omni-channel lens, fromthe product and packaging design,through promotional planning,operating model design andsupply chain.+DedicatedSKUs foronline?Learn moreMastering complexity can becomeDedicated a source of competitive SKUs advantage. for online?“There is an absolute differencebetween good complexity and badEY’s global perspective on the importanceof “design principles”complexity,” says Chris Tyas, GroupAlthoughHead ofemergingSupply Chainmodelsat Nestlé.such as Amazon’s Prime Pantryship We often find that companies find it difficult to visualize what“Onethe sameof thetypeskey questionsof centerwestoreneedproducts as sold in agrocery omni-channel will mean for their business. As they make theto answerstore,issomewhethercompaniesthe consumerbelieve that online retailedproducts transition to an omni-channel world, they need to step backvaluesshouldthe complexityhave dedicatedwe add.SKUs.For“One of the challengesis that and establish some clear “design principles” about their omnichannelstrategy. This involves looking five years ahead toexample,productsconsumersare eithermightdesignedvaluetothebe stocked on a shelf orshipped,”complexitysaysofChrispackagingTyas, GroupdesignedHeadforof Supply Chain at Nestlé.“It’s consider how the environment and consumer behavior mightonlinedifficultthattotakesdesignuppackagingless spacethatwhenwill fulfill the needs of bothonline change, and ensuring that the strategy can evolve accordingly.deliveredand bricks-and-mortarto the home. If not,channels.we haveI am convinced that therighttothingtake ittoout.”do is have a certain number of dot-com SKUs. Forvolumes where a large enough portion is being sold online, With a you clear destination in mind, companies can put inshould place the building blocks to reach that end state. This takesBy puttinghave aomni-channelspecific SKU forat thethat channel.”tenacity and determination. Each of these building blocksheart of strategic decision-making,will require investment and change management and maycompanies will be better placed tomean that margins are diluted in the short term. Businessfulfill the omni-channel promise ofleaders need to be able to communicate a clear rationale forseamless integration across channels.these decisions and ensure that the organization as a wholeis prepared to follow them, but also be willing to flex theapproach as the environment changes.Joost VreeswijkOperating Model Effectiveness Leaderin Europe, Middle East, India and AfricaEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow13

-AgilityCall for action - AgilityCreating the agile and responsiveomni-channel supply chainBack1 of 5NextKey takeawaysA segmented supply chain andinventory model helps to strikethe balance between agilityand efficiency.Compete for therequirements of tomorrow,not today.Supply chain must becomeeven more responsiveIn recent years, many companies have sought to maximizetheir supply chain efficiency by stripping out redundancy andreducing costs where they can. However, the transition toomni-channel challenges this single-minded focus on efficiencyand requires a new level of responsiveness.MenuCareful analysis of theassortment by channel iscritical to success.?Questions for management• Which customers should be served with which product?• Where must we provide supply chain efficiency vs. agility?• How will the supply chain network design need to adaptwith increasing omni-channel fulfillment?EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow14

-AgilityCall for action - AgilityBalance supply chain agilityand efficiencyBack2 of 5NextCompanies must strike the right balanceEfficiency comes at a price - it canmean that supply chains are lessflexible and adaptable to a changingexternal environment. Companiesmust also ensure they can respondto, and anticipate, shrinking productcycles, volatile demand and changingconsumer behavior. This relies ongood planning, end-to-end visibilityand clear communication acrosschannels and functional areas.Equally, the extent to whichconsumers expect efficiency overagility will vary. “You can get clickand-collectnext day,” says a retailoperations leader, “but 40% ofconsumers don’t want it next day.It is better to fulfill an order the rightway, not just the quickest way.”In some cases, cost will be thedefining factor, which demandsefficiency, whereas in others, speedof delivery will be paramount, whichrequires agility.40%“40% of consumers don’twant click-and-collectnext day.”“The more you know your customer, the better you areable to predict demand and know how to serve them.Our customer intelligence is a big source of competitiveadvantage that is helping us to put that knowledge to work.”Frank BruniVP Supply ChainThe Kroger CompanyEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow15

-AgilityCall for action - AgilityBalance supply chain agilityand efficiencyBack3 of 5NextRetailers are taking one of two broadapproaches to online fulfillmentOne is to leverage the existing storenetwork and start with fulfillingfrom stores, then expand as demandgrows into dark stores and beyond.The second is to use the existingwarehouse network or creatededicated centralized warehousefacilities at the outset.Each has significant pros and consthat must be considered. There is nosingle right model: the right answerand mix of each approach requiresassessment of likely demand,customer needs, existing footprintand investment case.The store-based approach requireslimited capital, is scalable, and canlead to greater delivery density andtransport efficiency. As demandgrows, fulfillment can be shiftedto dark stores; an approach Tescohas taken in dense urban areas.Dark stores can be laid out justlike a normal store, but in cheaperlocations. Over time, companiescan transform dark stores intoprofessional warehouse operationsby changing layout and addingautomation.Dedicated warehouses, on theother hand, are more costly from acapital perspective, but offer greaterconsistency of range and customerservice. They also have far morescope for extending the range ofproducts offered.“In some cases, there is convergence between the two models.Companies with centralized dedicated facilities are increasinglyinvesting in more regional sites closer to the customer, whilethose that started with in-store picking are increasinglycreating dark stores that are more like regional dedicatedwarehouses. Leading companies have a more segmented viewwith long tail items in more centralized warehouses and fastmovers being supplied locally.”Matthew BurtonEMEIA Omni-channel Leader, Supply Chain & OperationsEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow16

-AgilityCall for action - AgilityWhat stock to hold, whereand in what depth?Back4 of 5NextDepending on the fulfillment approach,the next challenge is deciding on whatinventory to stock whereThe survey responses highlight howdifficult this can be. Less than halfare able to meet demand uplift frommarketing incentives across differentchannels and maintain customerservice KPIs. And 40% have nomechanism to fulfill out-of-stocksacross sales channels until thatchannel is back in stock.49%are able to meet demanduplift across channels.40%have no mechanism tofulfill out-of-stocks.Again, the store-based andwarehouse-based models have theirpros and cons. The centralized sharedfacility offers simplicity because thereis only one stock base. But companiesmust take decisions about the levelof stock that is sent to stores versusbeing held back for online availability.By contrast, store-based fulfillmentcan be highly complex – the inventorymust cover both traditional storedemand and online fulfillment. Thereis significant scope for companies toget this wrong, which will immediatelyresult in many disappointedcustomers. Any stock-keeping errorsonly compound this.EY’s global perspective on the rightassortment for the right channelWhen retailers first set up their e-commerce channels,many assumed that, freed from the constraints of thephysical store, they could offer just about everything. Thisled to high obsolescence costs and write-offs with severalhigh-profile retailers shutting dedicated e-commerce sites.The assortment choice is, in reality, highly complex. Someproducts may simply not be suitable for offering online –either because the consumers that frequent that channel willnot buy it, or because the fulfillment challenges will erodemargins beyond an acceptable point.Many retailers are starting to realize that they need tothink much more strategically about the right assortmentfor the right channel. This means looking at each productand assessing the potential growth, margin potential andfit with the company strategy. They can then map the mostappropriate products to the right channel and fulfillmentapproach and either strip out those that are not profitable orfind the right supply chain response to ranging them at littlecost – e.g., for extended range items holding zero stock andback-to-back ordering products from suppliers.EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow17Matthew BurtonEMEIA Omni-channel Leader, Supply Chain & OperationsEY

+Welcome+Strategy-Agility+Visibility+ContactCall for action - AgilityWhat stock to hold, whereand in what depth?Back4 of 5NextDepending on the fulfillment approach,the next challenge is deciding on whatinventory to stock where.The survey responses highlight howdifficult this can be. Less than halfare able to meet demand uplift frommarketing incentives across differentchannels and maintain customerservice KPIs. And 40% have nomechanism to fulfill out-of-stocksacross sales channels until thatchannel is back in stock.49%are able to meet demanduplift across channels.40%have no mechanism tofulfill out-of-stocks.Addressing ‘out-of-stock’Again, the store-based andwarehouse-based models have theirpros and cons. The centralized sharedfacility offers simplicity because thereis only one stock base. But companiesmust take decisions about the levelof stock that is sent to stores versusbeing held back for online availability.By contrast, store-based fulfillmentcan be highly complex – the inventory“Omni-channel out-of-stock is poorly defined” says DhivantPatel, Global eCommerce Supply Chain Manager atUnilever. “It can mean that demand is at critically low levels,something is not available in one store, across the entiresupply chain, or it could be that pickers simply cannotfind the product. We need to look at shelf packaging andlabelling and work with the retailer to ensure that this is asclear as possible. This is challenging, however, because youmust cover both traditional storeneed store-specific data to understand what the issue is.”demand and online fulfillment. Thereis significant scope for companies toget this wrong, which will immediatelyresult in many disappointedcustomers. Any stock keeping errorsonly compound this.+Addressing‘out-of-stock’Learn moreEY’s global perspective on the rightassortment for the right channelWhen retailers first set up their e-commerce channels,many assumed that, freed from the constraints of thephysical store, they could offer just about everything. Thisled to high obsolescence costs and write-offs with severalhigh-profile retailers shutting dedicated e-commerce sites.The assortment choice is, in reality, highly complex. Someproducts may simply not be suitable for offering online –either because the consumers that frequent that channel willnot buy it, or because the fulfillment challenges will erodemargins beyond an acceptable point.Many retailers are starting to realize that they need tothink much more strategically about the right assortmentfor the right channel. This means looking at each productand assessing the potential growth, margin potential andfit with the company strategy. They can then map the mostappropriate products to the right channel and fulfillmentapproach and either strip out those that are not profitable orfind the right supply chain response to ranging them at littlecost – e.g., for extended range items holding zero stock andback-to-back ordering products from suppliers.Matthew BurtonEMEIA Omni-channel Leader, Supply Chain & OperationsEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow17

-AgilityCall for action - AgilityMeet the standards of tomorrow, not todayBack5 of 5NextThe growth of omni-channel is dramaticallyincreasing supply chain complexityThe trend is toward shorter leadtimes and click and collectOver the next five years the omnichannelmix will shift, with emergingchannels, like click and collect,growing in popularity. Companieswill need to adapt their supply chaininfrastructure to keep pace withthese trends, ensuring that theyhave the agility to respond to highlycomplex consumer behavior.In reconfiguring the supply chain,companies must focus on theneeds of the future. Shorteninglead times further increases theneed for responsiveness. Manycompanies are now offering someform of same-day delivery services.“Amazon is defining the deliverystandards to which every companywill have to aspire,” says one retailsupply chain leader. “Quite simply,we are living in an Amazon world.”Among our respondents, 42%say that they offer lead timesof 12 to 24 hours, while 16%offer 12 hours or less.Spending effort to achievenext-day delivery whenindustry leaders are alreadyfocused on same-day andpredictive delivery risks leavingcompanies still behind thecurve. To stay one stepahead, companies shouldalso explore emerging models,such as predictive fulfillment,which involves forecastingthe rate at which consumersuse everyday products anddelivering them without theneed to place an order.Predicted shift in fulfillmentchannel importance1. Store sales-9%2. Click and collect (store)3%3. Home delivery-7%4. Click and collect(third party and drop box)Percentage of respondentswho offer a lead time of:>48 hrs24-48 hrs12-24 hrs6-12 hrs12%35%42%58%5%2-6 hrs4%EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow18

-VisibilityCall for action - VisibilityProviding seamless data visibilityand actionable insightBack1 of 4NextKey takeawaysClose collaborationbetween manufacturersand retailers is critical.Effective omni-channel cannotbe achieved by either retailersor manufacturers aloneMenuExploit big data tomake a step change inforecasting and demandsensingoutcomes.It requires close collaborationbetween the two, and the constantsharing of information. At themoment, this seamless visibility ismissing. Andrew Caveney, GlobalLeader, Supply Chain & Operationsat EY, says that retailers need moreinformation from manufacturersthan ever before. “Retailers wantmore unstructured information, suchas written copy for marketing orproduct images. They need this in aformat they can easily leverage fordigital channels.”Integrate IT to providea single view of thecustomer and to provideseamless fulfillment.?Questions for management• Are you collaborating with key suppliers and customersto share forecast and sales data?• Is the data available being properly exploited to provide real consumerinsights and purchasing preferences and to enhance forecasts?• Is the data and IT being combined to provide a single view ofthe consumer and provide seamless fulfillment?EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow19

-VisibilityCall for action - VisibilityData sharing is critical to forecastingand demand sensingBack2 of 4NextSeamless visibility is missingStandardization and synchronization will have animportant role to play in improving supply chain efficiencyJust 45% ofmanufacturers haveaccess to end-consumersales, split by channel.74% saymistakes in priceelasticity/promotionsdrive significant costand complexity intofulfillment.49% are ableto meet demanduplift from marketingincentives acrossdifferent channels andmaintain customerservice KPIs.“You need collaboration to close theloop between manufacturer andretailer,” states Chris Tyas, GroupHead of Supply Chain at Nestlé. “On aday-to-day basis, this could be lettingretailers know when they’re continuingto order lines that are discontinued.Taking it to the next level, collaborationmeans working with the retailer. Inan online environment, this meansmanufacturers and retailers reviewingon a weekly basis the products thathave changed to make sure they arecorrect on the retailers’ systems.”Standardization will have an importantrole to play in improving supply chainefficiency by ensuring thatall data is supplied in a consistentand uniform format. However,complete standardization may not beattractive for retailers that still wantto differentiate themselves. Inevitably,there will be retailers that want tostand apart from the crowd. They willhave unique needs, and they will wantthose needs met.Equally, retailers must be willingto share relevant information withmanufacturers. For example, datasharing is critical to forecasting anddemand sensing. Success will dependon strong relationships.40% have nomechanism to fulfillstock-outs across saleschannels until thatchannel is back in stock.“Manufacturers need to make sure they have goodrelationships with the right people to get the intelligence theyneed. If retailers fail to give manufacturers more clarity, theythemselves will suffer from a problem with supply readiness.”EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow20Andrew CaveneyGlobal Leader, Supply Chain & OperationsEY

-VisibilityCall for action - VisibilityBig data must be exploitedBack3 of 4NextTraditional approaches to forecasting relied on historical data.However, the increasingly challenging nature of predictingwhich channel consumers will utilize is prompting some supplychain leaders to ask if forecasting is still relevantEY’s global perspective onusing shopper preferencedata for strategic advantage“It is very difficult to forecast whenwe are responding to a market that isso dynamic,” notes one retailer. “Thequestion becomes, how responsive canwe be to changes in demand?”With the advent of big data andpredictive analytics, companies areable to make a step change in theirdemand sensing. As consumersmigrate towards digital channels,they are yielding increasingly richdata about their purchasing behaviorand preferences. Companies thatcan capitalize on this data will derivesignificant benefits.Consumers now leave a trail ofinformation that can be hugelyvaluable. They also expect companiesto be joined up and know what theyhave purchased in every channel.Analyzing this data effectivelyenables companies to ensure that theyhave a single view of the customer,the right level of inventory in the rightplace, and that they can respondquickly to changing patterns ofconsumer demand.Companies are combining thisconsumer data with otherinformation in real time.For example, some retailersare analyzing historical salesdata alongside meteorologicalinformation to see if the weatherinfluences purchasing behavior.They can then predict futuredemand for product lines moreaccurately by factoring theweather forecast into theirinventory decisions.For now, these more advancedcapabilities are rare, with just26% of companies surveyedsaying that they have effective ITsystems and capabilities to enableseamless visibility and fulfillmentto end consumers.Gone are the days of simply relyingon traditional marketing strategiesto drive sales. The use of advancedanalytics for how consumers shoponline and in-store will increasinglyprovide critical visibility to enablecompanies to sense real-time shiftsin demand, personalize the shoppingexperience and identify thoseproducts that will be of highest valueto the consumer.Next-generation marketingcampaigns that align with shopperpreferences and transaction historywill predict shopping behaviors,recommend where inventory mustbe available and suggest productsthat may fit consumer needs.Leaders will be able to sense andshape demand by pushing productmarketing notifications in real timeto the shopper as they browseonline or are in-store.Ross BrubakerSupply Chain ConsultantEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow21

+Welcome+Strategy+Agility-Visibility+ContactCall for action - VisibilityBig data must be exploitedBack3 of 4NextTraditional approaches to forecasting relied on historical data.However, the increasingly challenging nature of predictingwhich channel consumers will utilize is leading some supplychain leaders to ask if forecastingUtilizingis still relevant.social media“It is very difficult to forecast when Consumers now leave a trail of Companies are combining thiswe are responding to a market that isSocialinformationmedia canthatbecana vitalbe hugelysource of insight.consumer“A maturedata with otherso dynamic,” notes one retailer. “Theomni-channelvaluable. Theyplayeralsoshouldexpecthavecompaniesa clear strategyinformationforin real time.question becomes, how responsive cancapturingto be joined– anduprespondingand knowtowhat– onlinetheyratingswe be to changes in demand?” have purchased in every channel. Forandexample, some retailersreviews,” says Dhivant Patel, Global eCommerceAnalyzing this data effectively are analyzingSupplyhistorical salesWith the advent of big data andpredictive analytics, companies areable to make a step change in theirdemand sensing. As consumersmigrate towards digital channels,they are yielding increasingly richdata about their purchasing behaviorand preferences. Companies thatcan capitalize on this data will derivesignificant benefits.for insightChain Manager at Unilever. “If online ratingsenables companies to ensure that they datadeclinealongsidewithinmeteorologicala number of weeks, it should flag that therehave a single view of the customer, informationis a temporaryto see if the weatherissue with a product. This must correlate withthe right level of inventory in the right influenceswhat comespurchasing behavior.in via call centers and the feedback passed to the categoryandplace,marketandteams.”that they can respondquickly to changing patterns ofconsumer demand.+Utilizingsocial mediaLearn moreThey can then predict futuredemand for product lines moreaccurately by factoring theweather forecast into theirinventory decisions.For now, these more advancedcapabilities are rare, with just26% of companies surveyedsaying that they have effective ITsystems and capabilities to enableseamless visibility and fulfillmentto end consumers.EY’s global perspective onusing shopper preferencedata for strategic advantageGone are the days of simplyrelying on traditional marketingstrategies to drive sales. Theuse of advanced analytics forhow consumers shop onlineand in-store will increasinglyprovide critical visibility to enablecompanies to sense real-timeshifts in demand, personalize theshopping experience and identifythose products that will be ofhighest value to the consumer.Next-generation marketingcampaigns that align with shopperpreferences and transactionhistory will predict shoppingbehaviors, recommend whereinventory must be available andsuggest products that may fitconsumer needs. Leaders will beable to sense and shape demandby pushing product marketingnotifications in real time to theshopper as they browseonline or are in-store.Ross BrubakerSupply Chain ConsultantEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow21

-VisibilityCall for action - VisibilityIntegrate IT and SC to provideseamless fulfillmentBack4 of 4NextBetter integration between IT and the supply chainlies at the heart of omni-channel successWith lead times constantlyshortening, and consumers expectingthe same level of inventory andservice irrespective of the channel,companies must put in place an ITinfrastructure that enables crosschannelvisibility and the free flowof information across functionalboundaries. Information silos mustbe eroded so that there is a clearline of sight between productdevelopment, demand planning,logistics and marketing.David Jones, Supply Chain Directorat Waitrose highlights the importanceof IT systems that support the supplychain. “In omni-channel, you needto be agile, but that has systemsimplications. You can’t be agile ifyour ordering systems, for example,don’t allow it. You need IT systemsthat support areas such as real-timepredictive analytics, stock counting,and ordering. At John Lewis, if youmake an order the night before, youcan get it the next day. Grocery needsto move the same way and you needthe technology to make that happen.”20.00•14.00EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow22

-Call for actionWhat do you need to do to succeed?BackNextStrategy• Focus on the real needs of theconsumer and don’t over engineerthe omni-channel offer• Dedicate resources to prioritizeomni-channel and collaborate acrosschannels to remove silo behavior• Embed a continuous improvementmindset to keep up with fast-changingtechnology platforms and behaviors• Design products and packaging forthe requirements of omni-channelAgility• Plan for supply chain needs of thefuture, not today, or you will alwaysbe behind• Segment the supply chain tomeet the different product andchannel demands• Sweat existing assets ina creative way to support theomni-channel need• Get click and collect right asa priority over home deliveryVisibility• Incentivize data sharing to get anend-to-end view of the value chain• Move beyond traditional salesforecasting to sense and shapedemand• Use your data to create a single viewof the customer across all channelsincluding returns• Leverage advanced analyticsplatforms to drive granular detail oncost to serve in order to understandreal profit drivers“Re-engineering the omni-channel supply chain must be apriority for consumer goods companies and retailers if theyare going to remain relevant to both the consumer and theirshareholders. All three enablers (strategy, agility, and visibility)will determine a new configuration, shifting from very linearsupply chains to more networked configurations with alternativepaths to support the needs of omni-channel fulfillment.However, companies cannot be complacent. The ongoingrapid evolution of omni-channel makes change managementa critical capability.”Andrew CaveneyGlobal Leader, Supply Chain & OperationsEYEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow23

+Welcome-Call for actionInterested in learning more?BackNextWe have selected some leading industry and issue-basedreports and additional information sources to providesupplementary insights.We would like to thank thefollowing people for theircontribution to the report:Disrupt or bedisrupted: creatingvalue in the brandnew orderUnlocking margins inconsumer products:integrated marginmanagement to deliverbreakthrough performancein consumer productsBridging the gapbetween CFOs andsupply chainAndrew CosgroveMatthew BurtonRob MitchellBecky DeaconElizabeth BurgessKristyn GreenEmmanuelle RomanTracy JacksonRoss BrubakerManvendra Singh KhatiDesign team at Pull DigitalDelivering Agile InnovationShifting fromconsumption toexperience: winningin omni-channelretailingProfit or lose: balancingthe growth-profit paradoxfor global consumerproducts companiesand retailers in Asia’semerging marketsConsumers on Board:how to copilot themultichannel journeyEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow24

-About the surveyProfile of respondents from the consumergoods and retail industriesBackNextAbout this report: For this study, EY worked with the Consumer GoodsForum to survey 42 senior executives of large organizations in the consumergoods and retail sectors. The respondent distribution is shown below.The survey was supplemented with in-depth interviews with select companieswho had completed the survey.Base: all respondents (42)12%Less thanUS$1bSubsector of respondentsFood andbeverageGrocery retail24%43%Function of respondentsHome andpersonalcareOtherretail26%7%40%More thanUS$25b24%BetweenUS$1b andUS$10bSupply chain/operationsMarketingOther67%6%3%ITSales19%6%Size of firm(globally)24%BetweenUS$10band US$25bLocation in which respondents were basedAsia12%EMEA56%Americas32%EY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow25

–ContactAbout The Consumer Goods ForumBackNextThe Consumer Goods Forum is a global, parity-basedindustry network that is driven by its members.It brings together the CEOs andsenior management of some 400retailers, manufacturers, serviceproviders and other stakeholdersacross 70 countries, and it reflectsthe diversity of the industry ingeography, size, product categoryand format. Its member companieshave combined sales of €2.5 trillionand directly employ nearly 10 millionpeople, with a further 90 millionrelated jobs estimated along thevalue chain. It is governed by itsBoard of Directors, which comprises50 manufacturer and retailer CEOs.The CGF’s mission is, “Bringingtogether consumer goodsmanufacturers and retailers inpursuit of business practices forefficiency and positive change acrossour industry benefiting shoppers,consumers and the world withoutimpeding competition.” It providesa unique global platform for thedevelopment of global industryprocesses and standards as well assharing best practices. Its activitiesare organized around sustainability,product safety, health and wellness,and end-to-end value chain andstandards, each of which is centralto better serving consumers. TheForum’s success is driven by theactive participation of its memberswho together develop and lead theimplementation of best practicesalong the value chain. With itsheadquarters in Paris and its regionaloffices in Washington, DC, and Tokyo,The Forum serves its membersthroughout the world.For more information, please visitEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow26

–ContactThe Consumer Goods ForumSupply Chain CommitteeBackNextDelighting the consumer. Acting as one.John S. Phillips SVP Customer Supply Chain & Go-To-Market,Pepsico Global Operations, US (Committee Co-chairman)David Jones Supply Chain Director, Waitrose Ltd.,United Kingdom(Committee Co-chairman)João Amaral Logistics and Production, Sonae, PortugalPetra Albuschus Senior Vice President Logistics, ICA Sverige AB, SwedenFrank Bruni Vice President Logistic Operations, The Kroger Co., USNuno Cardoso Supply Chain Director, Jeronimo Martins, PortugalMartin Gleiss Supply Chain & Logistics Manager, Spar, AustriaJavier Huerta Vice President, Global Supply Chain Strategies & CustomerService, Unilever, United KingdomYasuyuki Ishii Senior Executive Officer, President of ProductionDivision, President of Supply Chain Management Division, Kirin BreweryCompany, JapanMarjolein Raes Senior Manager, Knowledge and Best Practice Sharing,The Consumer Goods ForumEthem Kamanli Supply Chain Solutions Group Manager,Migros Ticaret A.S., TurkeyHerbert Kueng Vice President Customer Service & Logistics Ceema,Mondelez International, AustriaSandra Macquillan Vice President Supply, Global Petcare, Mars, BelgiumAndreas Münch Member of the Executive Board, Head of DepartmentLogistics & IT, Migros, SwitzerlandStefano Pietroni Network Design, Planning & Sourcing Director, Barilla, ItalyJim Radin Vice President – Global Supply Chain Operations, McCormick& Co. Inc., USRob Scholte Chief Sales and Supply Chain Officer, Metro AG, GermanyDaniel Seh Director Supply Chain DPGP Europe, L’Oréal, FranceJohann Seif Int. Planning & Logistics, Henkel AG & Co KGAA, GermanyFumimaro Sekine Vice President, Kao Corporation, JapanYannis Skoufalos Global Product Supply Officer, Procter & Gamble, USMarcelo Stefani Chief Procurement Officer, S.C. Johnson & Son, Inc., USChris Tyas Group Head of Supply Chain, Nestlé Group, SwitzerlandXavier Ury Vice President Procurement Support, Quality and Supply Chain,Delhaize Group, BelgiumGary Wyborn Director, Customer Integration, The Coca-Cola Company, USMidori Yamaguchi President, Aeon Global SCM Co. Ltd., Japan SpecialAdvisor to the CommitteeValentin Elistratov Vice President Business Development InternationalSupply Chain, Emea, DHL Global Forwarding, FranceContactMarjolein Raes Senior Manager, Knowledge and Best Practice SharingThe Consumer Goods Forumm.raes@theconsumergoodsforum.comEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow27

–ContactAbout EYBackNextEY | Assurance | Tax | Transactions | AdvisoryAbout EYEY is a global leader in assurance, tax, transaction and advisoryservices. The insights and quality services we deliver help build trust andconfidence in the capital markets and in economies the world over. Wedevelop outstanding leaders who team to deliver on our promises to allof our stakeholders. In so doing, we play a critical role in building a betterworking world for our people, for our clients and for our communities.EY refers to the global organization, and may refer to one or more, ofthe member firms of Ernst & Young Global Limited, each of which is aseparate legal entity. Ernst & Young Global Limited, a UK company limitedby guarantee, does not provide services to clients. For more informationabout our organization, please visitHow EY’s global consumer products team can help your businessConsumer products companies are operating in a brand-new order,a challenging environment of spiraling complexity and unprecedentedchange. Demand is shifting to rapid-growth markets, costs are rising,consumer behavior and expectations are evolving, and stakeholders arebecoming more demanding. To succeed, companies now need to beleaner and more agile, with a relentless focus on execution. Our worldwidenetwork of more than 17,500 consumer products-focused assurance, tax,transaction and advisory professionals shares powerful insights and deepsector knowledge with businesses like yours. This intelligence, combinedwith our technical experience, can assist you in making more informed,strategic choices and help you execute better and faster.© 2015 EYGM Limited.All Rights Reserved.EYG no. EN0638ED NoneThis material has been prepared for general informationalpurposes only and is not intended to be relied upon asaccounting, tax, or other professional advice. Please refer toyour advisors for specific advice. The views of third partiesset out in this publication are not necessarily the views of theglobal EY organization or its member firms. Moreover, theyshould be seen in the context of the time they were made.ContactsKristina RogersGlobal Sector Leader,Consumer Products & Retailkristina.rogers@tr.ey.comAndrew CosgroveGlobal Lead Analyst,Consumer Products & Retailacosgrove@uk.ey.comAndrew CaveneyGlobal Leader,Supply Chain & Operationsacaveney@uk.ey.comMatthew BurtonOmni-channel Leader, SupplyChain & Operations, EMEIAmburton@uk.ey.comBraden DicksonOceania Leader,Supply Chain & Operationsbraden.dickson@nz.ey.comBrian MeadowsAmericas Leader,Supply Chain & Operationsbrian.meadows@ey.comFrank ThewihsenEMEIA Leader,Supply Chain & Operationsfrank.thewihsen@de.ey.comJonathan WrightAsia Pacific Leader,Supply Chain & Operationsjonathan.wright@sg.ey.comEY in collaboration with The CGF: Re-engineering the supply chain for the omni-channel of tomorrow28