New Kearney Supply Chain Report Finds Inefficient Supply Chains Will Cost CPGs $800 Billion in Top-Line Growth

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Jun 02, 2022, 10:17 ET

48% of CPGs will capture the majority of growth while the rest of underperforming companies will lose
Supply chain leaders must make quick, informed decisions
Local and regional portions of the supply chain must be empowered
Legacy supply chains must be moved from low-cost to a "best-cost" model

CHICAGO, June 2, 2022 /PRNewswire/ -- Today, global management consulting firm Kearney releases its newest supply chain and transformation paper, More than half of all CPG companies on track to grow below the market by 2027, which analyzes supply chain inefficiencies and gives strong guidance on how CPG companies can look to transformative models to win in the current climate of change and uncertainty.

More than half of all CPG companies on track to grow below the market by 2027

"Top performing companies today have supply chains that are built around speed, resilience and especially customer service," said report co-author Arun Kochar, a partner in Kearney's Strategic Operations practice. "Most big transformations fail because people don't like to change, but with $800 billion in top-line growth at stake, there's a compelling case for CPG companies to make the necessary changes."

The report lays out a model for supply chain transformation that includes an exhaustive three-step approach and a rationale for exactly what must change and why. It also analyzes economic supply chain opportunity in terms of:

Quantifying expected market size in 5 years
Identifying relevant peer sets by fast-moving consumer goods (FMCG) sector, and dividing it into quartiles
Understanding quartile growth relative to market compound annual growth rate (CAGR)
Estimating gain or loss of market share by quartile over the next 5 years

"Transformations are rarely easy," said study co-author Greg Portell, lead partner in Kearney's Global Consumer and Retail practice. "Half of all transformations are stopped; 80% are proven ineffective. Success requires building the required support in the organization and, at every step of the way, ensuring that the proposed changes are still relevant along the entire 12 to 24-month journey."

A copy of the new forward-looking supply chain study, More than half of all CPG companies on track to grow below the market by 2027, is available at this link.

About Kearney

As a global consulting partnership in more than 40 countries, our people make us who we are. We're individuals who take as much joy from those we work with as the work itself. Driven to be the difference between a big idea and making it happen, we help our clients break through. Learn more at Kearney.com.

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SOURCE Kearney