VALUE CHAIN
COLLABORATION PART B
OPPORTUNITIES AND RISKS
VALUE CHAIN
COLLABORATION
PART B
OPPORTUNITIES
AND RISKS
WHEN VALUE CHAIN PARTNERS SHARE THE SAME VIEW OF THEIR REALITY, IT FACILITATES COLLABORATION AND COMMON FOCUS ON OPPORTUNITIES AND RISKS.
WHEN VALUE CHAIN PARTNERS SHARE THE SAME VIEW OF THEIR REALITY, IT FACILITATES COLLABORATION AND COMMON FOCUS ON OPPORTUNITIES AND RISKS.
In our recent thought leadership piece, we took a more in-depth look at the power of collaboration using data-driven insights.
IN PART B, WE UNPACK THE IDENTIFICATION OF
OPPORTUNITIES AND RISKS AND HOW IT CAN
DRIVE SIGNIFICANT MOVEMENT IN PRODUCT
COST AND SELLING PRICE.
IN PART B, WE UNPACK THE IDENTIFICATION OF OPPORTUNITIES AND RISKS AND HOW IT CAN DRIVE SIGNIFICANT MOVEMENT IN PRODUCT COST AND SELLING PRICE.
To facilitate focused collaboration, it is key to achieve a common understanding of how the value chain works. This ensures a joint understanding of risks and opportunities and facilitates the identification of the required insights to drive focused collaboration between value chain partners, along with the facts and data which will be required to achieve those insights. The common goal should and must be to avoid different versions of the truth as early on in the process as possible.
As illustrated in the diagram below, value chain partners should be focused on golden data threads which can expose win-win and hidden insights and opportunities. The collaboration process should be ongoing and based on facts and data, rather than the results of one-off projects or initiatives. It is built on trust and embedded in the culture of partner organisations and value chain partners share specific data and incentives to collaborate.
TIER 4 SUPPLIER
Input Cost Dynamics
Yields and Losses
Seed Options
Mechanisation Options
Recycling Options
TIER 3 SUPPLIER
Commodity Price
Dynamics
Variety Options
Primary Processing
Waste Hotspots
Procurement Data
TIER 2 SUPPLIER
Cost of Logistics
Waste Hotspots
Sourcing Regions
Secondary Markets
Procurement Data
TIER 1 SUPPLIER
Order Fill Data
Recipe Configuration
Production Efficiencies
Product Costing
Procurement Data
RETAILER / CONSUMER SERVICES
Sales
Promotions
Market Share
Customer Complaints
Store Waste
Product Design
Figure 1
For example, let’s assume value chain partners agree on the need to review and redesign a current product and category offering and target pricing to an opportunity in the market and to take advantage of shifting market conditions driven by consumer needs for a more cost-effective productive offering. It is key for partners to understand the value chain and cost dynamics of the current offering in order to identify and target selected opportunity spaces and the insights and data required to deliver on it.
IN SHORT, A THREE-STEP PROCESS
APPLIES IN THIS EXAMPLE
OPPORTUNITIES & RISKS
VISUALISATION & OPPORTUNITY
IDENTIFICATION & EXECUTION
As illustrated in this example, identification of specific opportunities and risks related to the common objectives becomes possible once the unique relationships and dynamics across the value chain are mapped.
In this particular example, in order to redesign a current product and category offering and target pricing, there are several issues to consider and to address at different levels across the value chain. This could include aspects such as using or trialing alternative forms of raw or processed materials from alternative sources or territories or understanding the impact of altered product specifications – all within the context of target pricing which needs to be achieved for the product categories and channels in scope.
IN OUR NEXT INSIGHTS PIECE, PART C, WE WILL
EXPLORE HOW INSIGHTS AND DATA WOULD SUPPORT
THE CLOSE-OUT OF OPPORTUNITIES
AND RISKS IDENTIFIED.
IN OUR NEXT INSIGHTS PIECE, PART C, WE WILL EXPLORE HOW INSIGHTS AND DATA WOULD SUPPORT THE CLOSE-OUT OF OPPORTUNITIES AND RISKS IDENTIFIED.
VALUE CHAIN SOLUTIONS IS A FULLY-INTEGRATED CONSUMER GOODS VALUE CHAIN ADVISORY AND SOLUTIONS BUSINESS, OPERATING ACROSS MULTIPLE ENTITIES AND GEOGRAPHIES. WE UNDERSTAND AND DEMYSTIFY COMPLEX VALUE CHAIN DYNAMICS FROM SHELF TO SOURCE AND PARTNER WITH OUR CLIENTS TO INTEGRATE FRAGMENTED DATA AND DRIVE VARIOUS INSIGHTS FROM IT TO FACILITATE STEPWISE IMPROVEMENT IN VALUE CHAIN MATURITY, ALONG WITH ONGOING OPTIMISATION AND COLLABORATION.
