The FMCD industry is on the cusp of a major transformation. With fast-evolving regulatory frameworks for environmental performance reporting, softening of economic borders and infrastructure for domestic and EXIM trade undergoing a digital transformation, FMCD companies need to look towards opportunities presented by digital technologies to reimagine their supply chains to stay competitive. Moglix Business provides a safe harbor to FMCD companies with its portfolio of supply chain offerings.
The FMCD industry has stayed the course of steady growth in emerging economies and mild to moderate growth in matured markets buoyed by economic, social and institutional drivers. The growth of emerging economies has witnessed a steady evolution of rural to urban migration, growth in young urban consumers and greater female participation in the workforce. Greater adoption of consumer digital technologies, rising digital connectivity owing to investments and policy reforms to unshackle economic growth, have led to emerging economies moving closer towards the adoption of products standards (BEE Star rating), compliance norms for quality standards by regulatory agencies (BIS testing and certification) and energy efficiency levels. Policy initiatives like massive investments in GRID (Government Regulators and Infrastructure Development) have also enabled the growth of revenues and volumes. Global cues like consolidation of Free-Trade Agreements (FTAs) among economies of Asia-Pacific-China (APAC) region have been a major trigger for transnational procurement networks with the opening up of new frontiers of cost-effective sourcing and value addition in geographies with endowments of low cost and skilled labour.
Among the major supply chain challenges impeding optimal growth are fragmented procurement networks, the small scale of operations of 3PL players in emerging economies, linear supply chain designs that engage only manufacturers and customers and consequently complex and multi-layered distribution networks with large volumes of data that inhibit visibility of marketing activities performed by the sales force. Small fleets of vehicles operated by 3PL players in emerging economies and lack of asset-heavy 3PL supply chain services like Pick Up Drop Off (PUDO) centers, hub and spoke models of warehousing and distribution and fragmented supplier bases engage resources, time and effort in managing complex invoicing, billing and contract management SOP implementation. In matured markets compliance with regulations for Building Research Establishment Environmental Assessment Method (BREEAM) in the United Kingdom, Leadership in Energy and Environmental Design (LEED) in the United States and Canada and Comprehensive Assessment System for Built Environment Efficiency (CASBEE) in Japan allow consumers to objectively assess environmental performances of enterprises and navigate towards purchase decisions, thereby mandating supply chains to be lean, efficient and sustainable.
FMCD companies that place a premium on winning the trust of consumers are replacing single-use plastic items with sustainable packaging solutions for their market outreach that are environment-friendly. Market-leading companies in the FMCD industry are exploring new avenues of efficiencies in their procurement networks and downstream supply chains by leveraging digital technologies like data, data-driven procurement practices and supply chain collaborations to manage tail-end spend. The deployment of cutting-edge digital technologies likedata integration, business and contract intelligence capabilities, KPI tracking for suppliers and the use of analytics for demand and materials planning, inventory management and real-time insights into stock-in-channel inventory to enable swift responses to demand shifts are likely to gather momentum, moving forward. FMCD players are also investing in cloud computing capabilities that optimize energy consumption in infrastructure management with the likelihood of sustainability reporting being made mandatory by regulatory agencies. Vendor consolidation can enable FMCD companies to develop more agile, responsive and flexible supply chains that generate economies of scale on bulk purchases, Just-In-Time enablement of deliveries and consistent quality standards and leverage the collaborative advantages of cross-docking, optimal inventory holdings, lower capital lock-in and cost rationalization by means of outsourcing non-core operations along with vertical integration of core competencies.
The Moglix Advantage
At Moglix Business, we enable FMCD companies to transform their supply chains to achieve greater speed, flexibility and visibility of inventory holdings and vendor performance through our portfolio of e-commerce, SaaS, packaging solutions and vendor consolidation offerings.