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Traditional supply chain management has been all about streamlining, but the Covid-19 pandemic exposed the risk of a narrow focus on cost efficiency at the expense of customer convenience—namely, concentrating supply with one or two large sources and limiting buffer capacity. Research by Bain & Company and Microsoft shows that the share of retail and consumer goods executives rating cost efficiency as one of their top two supply chain goals fell by 13 percentage points, while agility rose by 24 percentage points. To improve flexibility, successful retailers and consumer goods companies have started setting up alternative suppliers, manufacturing sites and assembly nodes. They also are adding multiple customer fulfillment options.
It's Time to Build Resilience into Retail and Consumer Goods Supply Chains
Reeling from Covid-19 disruptions, leaders are investing to improve speed and agility.