Consumer product leaders are focusing on improving supply chain operations, leveraging analytics, AI and other technologies to drive greater efficiencies and help achieve sustainability goals.
April 12, 2023
ARMONK, NY and PARIS, FRANCE April 12, 2023 – According to a new global study by IBM (NYSE: IBM) and The Consumer Goods Forum (CGF), 61% of consumer goods leaders are purposefully aligning their sustainability and operational goals, with 77 % of respondents who agree sustainability investments will accelerate business growth. Respondents indicated that technology budgets will be increased by 34% over the next three years in order for their companies to fulfill their commitment to operationalize sustainability.
study, titled “Redesigning brand values: Convergence in purpose and profit core functions” 1,800 consumer goods executives in 23 countries were surveyed. It reveals that consumer goods companies are integrating sustainability into their operations, recalibrating sustainability measurement and reporting, as well as increasing their investments in technology to help achieve their sustainability goals.
“The world we live in is changing rapidly and FMCG and consumers are paying attention,” said Rudiger Hagedorn, CGF End-to-End Value Chain Director. An efficient future using new technologies? This report provides valuable insight into what determines decision-making at boardroom level globally, which will shape our future.”
Some of the key findings of the study include:
- Integrating sustainability and operations: 61% of surveyed consumer goods leaders are purposefully aligning sustainability and operational goals to optimize investments and efforts, 77% of leaders agree that sustainable investments accelerate business growth. This strategic integration has resulted in innovative initiatives such as sustainable packaging, energy-efficient production processes, and ethical sourcing of ingredients.
- Recalibration of consistency measurement and reporting: About 75% of leaders agree on the need to recalibrate how sustainability goals are measured and reported. However, many lack the capabilities to monitor and measure progress in real time. The study highlights the importance of establishing a solid data foundation and improving data collection capabilities to increase transparency and trust.
- Using technology to operationalize sustainability: Companies are turning to technology to effectively deliver on their sustainability promises, seeing a role for many advanced technologies including automation (71%), analytics (69%), IoT (62%), AI (55%), and intelligent workflow (55%). 44%). As they revamp their supply chain operations, 67% cite the use of predictive and prescriptive analytics and AI-powered demand sensing (69%) to improve inventory management and eliminate excess stock. They are also implementing AI-enabled workflows (70%) and are adopting the emerging technology of digital twins (26%) to drive capabilities.
“In today’s world, consumers actively seek out brands that reflect their values, making sustainability integration a critical differentiator for consumer goods businesses and the retailers they serve,” said Luke Niazi, global managing partner for the industry at IBM. Operations can only be achieved through a strong combination of business processes, technology, ecosystem partnerships, and C-suite collaboration across manufacturing, technology, operations, supply chain, and sustainability. By embracing this holistic approach, consumer industry executives can help drive sustainable business operations. Demonstration to Tap into Greater Share of Consumer Spending.”
The study shows successful examples from consumer goods companies, including Levi Strauss, Pandora, Reckitt, Unilever and Walmart, who have already started using technology for sustainability and reaping the benefits. These businesses serve as inspiration for other companies looking to bring about positive change in their business operations.
In 2022, the IBM Institute for Business Value and The Consumer Goods Forum (CGF), in collaboration with Oxford Economics, conducted a global survey of 1,800 industry executives in North America, Latin America, Europe, the Middle East and Africa, and 23 countries. Asia Pacific – To understand how consumer product leaders balance emerging and immediate sustainability objectives with ongoing operational goals. The full study is available here: https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/sustainable-operations-consumer-products
About the IBM Institute for Business Value
The IBM Institute for Business Value (IBV), IBM’s thought leadership think tank, combines global research and performance data with the expertise of industry thinkers and leading academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit: www.ibm.com/ibv.
About the Consumer Goods Forum
The Consumer Goods Forum (“CGF”) is a global, peer-to-peer industry network driven by its members to encourage global adoption of practices and standards that serve the consumer goods industry worldwide. It brings together the CEOs and senior management of nearly 400 retailers, manufacturers, service providers, and other stakeholders in 70 countries, and it reflects the industry’s diversity in geography, size, product category, and format. Its member companies have combined sales of EUR 4.6 trillion and directly employ approximately 10 million people, with an additional 90 million associated jobs estimated in the value chain. It is governed by its board of directors, which includes more than 55 manufacturer and retailer CEOs. For more information, please visit: www.theconsumergoodsforum.com.
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