CPG Supply Chain Sees Value Prop Dip: Gartner

AI Anxiety

Perhaps unsurprisingly, employees are very concerned about what the rapid rise in artificial intelligence means for their jobs, and they’re starting to ask questions about how their roles might change, said Clemens.  

“There’s a lot of uncertainty and fear that is preventing some of this adoption or willingness to upskill. At the same time, as leaders, we’re not doing a good job easing or addressing these concerns.”  

In fact, 70% of organizations aren’t addressing any of the concerns about how it will impact employees’ roles, skills, or stability. “Communication and transparency is highly lacking.”  

Data Integrity

“Garbage in, garbage out” may have already hit cliche status, but it’s never been more critical. The increase of external and customer data is driving a greater need for data understanding, cleansing, and governance, in turn fueling an increased focus on supply chain cybersecurity, said Clemens. 

One need look no further to see this in action than Clorox, which suffered a data breach that impacted distribution. The company is more aggressively investing in its security, sinking twice as much as in the past. 

Fittingly, 69% of consumer products supply chain leaders are partnering with IT to establish data security, according to Gartner. 

Customer Collaboration 

While supply chain leaders may be ready to collaborate across their organization, there’s less of a priority to do so with their retail partners: Only 40% of consumer products leaders said it’s a focus area. 

Retailers, however, are taking a much stronger position in the driver’s seat when it comes to making decisions about their business, said Clemens, including investing in analytics and point-of-sale technology, reclaiming shelf space and merchandising decisions, and dictating it back to suppliers. 

“We see the likes of Walmart, who are using generative AI to do supplier negotiations. If suppliers/ manufacturers are not prepared for that, they could easily [have a disadvantage]. Understanding how to come with your best offers and negotiate with generative AI is something that they need to think about, but it has not really been on the radar.”