ECR Leaders' Forum - Rethinking the Value Chain: CGF Cap Gemini

In collaboration with

INFORMAL PREVIEW

Not to be distributed

Kees Jacobs, Capgemini, ECR European Leaders Form, 15 october 2015

2 © 2015 Capgemini and The Consumer Goods Forum. All Rights Reserved

Rethinking the Value Chain: New realities in collaborative business

The CGF Board initiated this study to address the new

realities in collaborative business

Board Co-Sponsors

of The Consumer

Goods Forum’s End-to-

End Value Chain &

Standards Pillar

The Board of The Consumer Goods Forum initiated the

strategy and steps that led to the creation of this report.

This paper considers some of the essential ways of

anticipating and addressing profound shifts in consumer

behavior and the industry landscape.

Muhtar Kent

Chairman & CEO

The Coca-Cola Company

Motoya Okada

President & Group CEO

AEON Co., Ltd.



New thinking emerged from collaborative visioning

The Consumer Goods Forum is please to invite you, as a leader

in the Consumer Goods Industry, to participate in a workshop that

will help define the future of our business.

RETHINKING THE VALUE CHAIN

New realities in collaborative

business

The world

changed



Macro-trends driving sweeping global change

Aging global population in developed nations

Rising middle class and emerging young consumers in

developing nations

Increased urbanization – Rise of Megacities

Shifting regional and global economic centers

Insufficient Infrastructure investment in developing nations

Resource stresses – water, energy, land, time & more

Population growth of 8.2 billion people by 2025



At the heart of it all…the empowered consumer

drives demand

5 billion connected to the web by 2025

More reliance on online social networks for info vs. traditional

communications

Consumers now have greater visibility into businesses and

Share of Voice

Greater focus on sustainability, health and wellbeing

Rising bar for consumer trust

70% of consumers won’t buy from a company they don’t like

90% in the US consider where a product is made before buying



Example: How could urban living look like in 2025?



business

Value chain

collaboration

changed



We see an evolution of Industry Collaboration

Industry Track (Collaborate)

Best Practices/ Standards

Documentation, Education,

Communication

Guiding Principles and Frameworks

Share Results

• Common Goals & Measures

• Information Sharing*

• EPC

• Data Sync

Connected Business

Information

• Knowledge, Skills & Capabilities

• Incentives & Rewards

• Organisation Design

Prepare People for New World

• Sustainability

• Cross Industry Integration

• Integrated Supply Chain

Share Our Supply Chain

Trading Partner Track (Competitive Advantage)

Strategic Issues Between Trading

Partners

Common Goals, Common Measures

Specific Measures & Priorities

Other Data Sharing

Opportunities

Consumer/

Shopper

Satisfaction• StrategyAlignment

• JAG Framework

Focus on

Consumer

Mid-nineties

Efficient Consumer Response

Mid-2000’s 2015 – 2025

EFFICIENCY GROWTH

Long-term growth by

NEW VALUE

CREATION

Supply-side focus

Demand-side focus

New Ways of Working Together Value Networks

Co

llab

ora

tio

n V

alu

e



We need to address the challenges to traditional value

chain models

Move away from traditional linear value chains

to a value network approach

Increasing multi-lateral collaboration across

multiple stakeholders

Opening up new opportunities through the use

of disruptive technologies to enable strategic

and transformational collaboration initiatives



Moving from linear Value Chains to

Consumer-driven Value Networks



Future Value Networks organised around ageing

consumers



Example of an health-related Future Value Network

Other

Retailers Other

Manufacturers Pharmacy

Retailer Pharmacy

Manufacturer

Healthcare

Insurer

Medical

Charities

Healthcare

Provider

Technology

Provider

Choice and

budget

Understand

medication

impacts

Health

monitoring

Health

Advise and

Care

Consumer and

health behaviour

Insights

Based on the input from Stefano Pessina, executive vice chairman

and acting chief executive officer of Walgreens Boots Alliance,

at the 2015 Global Summit of The Consumer Goods Forum



This will impact consumer experiences, business

operations and business models



business

Strategic

thrusts for the

industry



We prioritised 3 strategic collaboration thrusts where the

industry is underperforming, which will help to establish

new value creation

Transparency Consumer

Engagement Last Mile Other....

Business

Revenue

Consumer

Trust

Operational

Efficiency

Health &

Sustainability

Bu

sin

ess

Drive

rs

Co

llab

ora

tio

n

Prio

ritie

s

Long-term growth by

NEW VALUE

CREATION

enabled by Modular Technology

1 2 3

4



The CGF Consumer Engagement Principles initiative

provides a platform to build consumer trust

Consumer engagement

Taking part in a dialogue with consumers,

justifying their trust in the industry

CEP is created and driven by the industry - for the

industry and for the consumer

The CEP is forward looking and a ‘living’ set of principles,

which will evolve over time

It creates balance between value for the business, for the

consumer and for society

CEP links to and builds on existing initiatives, platforms

and policies (such as data privacy laws all over the world)

CEP aims to provide positive and pragmatic guidelines to

build/maintain consumer trust

CEP will help industry with practical resources

1



The 7 Consumer Engagement Principles

1. Simple Communications

Communicate in a clear, simple and easy to understand language

2. Value Exchange

Inform consumers about the benefits and value that the use of their

personal information provides to both businesses and consumers

3. Transparency

Inform consumers about what we do with the personal information they provide

4. Control and Access

Enable consumers to easily choose whether and how their personal information

is used; and to have access to information on how their personal information is

used, and the ability to correct it and/or have it removed

5. Ongoing Dialogue

Listen and respond to consumer feedback about the use of their personal data

6. Protection of Personal Information

Protect the integrity, reliability and accuracy of consumers’ personal information

and be open about the status of their personal information

7. Integrity in Social Media

Preserve integrity through proper disclosure of commercial interests in social

media practices such as ratings, recommendations, endorsements and work

with regulatory agencies on alignment of practices and guidelines

1



Specific aspects of ingredient provenance and

supplier ethics, as well as environmental and

ecological impact, can become important to

consumers overnight, depending on the public

agenda

Transparency through standardized, industry-wide

approaches to maintain consumer trust

Consumer trust takes decades to

build but can unravel in a day….and

can tarnish industries as a whole…

Trust is volatile

Our ambition is to consistently provide consumers

with exactly the right, accurate information they

need, at the right moment and via the right channels

Meet demand for (new) information hitting the public

agenda via standard, global approaches

Balancing prescriptive rules with principles and

guidelines

Make information online consistent with information

on packaging

Currently this information most often resides in

silos; it needs to be more open and connected

Agree on a clear strategy for unique product

identification and align initiatives and GS1 Standards

that enable provision of transparent information to

consumers

Signal to consumers a strong declaration of a

trustworthy promise.

Successful companies assign a specific executive

role to address transparency

Transparency helps in turning declining trust around Transparency

• Keeping consumers informed about

products’ key attributes, ingredients,

nutrients and provenance as well as their

environmental and societal impacts

This is not a new topic. Our industry has been struggling

to share consistent and accurate product information with

business partners and with consumers for many years now.

We have not been able to solve the issue.. !

2



The last mile of distribution: evaluating collaboration benefits

for efficiencies, sustainability and consumer convenience

Consumers expect more when it comes to

availability, convenience and choice, and want

personalized experiences and service levels in

how goods get to them

Conventional retailers with both a physical store

and online presence face the pressure of meeting

consumer expectations of the last mile without

incurring prohibitive costs

How to manage sustainability of the last mile?

Is the last mile of distribution a ‘customer facing

experience’? What does it mean for our brand?

How do we balance independent execution with the

benefits of collaboration in efficiency, costs,

sustainability and consumer convenience?

Questions to think about

Companies that try to defend their traditional models

and assets will not win

Companies such as Amazon and eBay are already

experts in rapid experimentation and the consumer

goods industry needs to learn from them to compete

effectively

There is little evidence or data on which approaches

to collaboration work best where. Analysis is needed

to understand the business case

Building blocks for success

The last mile of distribution – both to the

retail store and to the consumer

• Reconsidering the assumption that it is an

area where companies operate

independently of each other, and exploring

opportunities to collaborate, under certain

circumstances, to improve speed, efficiency

and consumer satisfaction

3



Our current technology capabilities are hindering our ability

to respond to the rapid pace of change

IT systems adhere to established business models

and value chains, leading to inflexibility and hindering

agility to change

Data is often trapped - business applications and

organizations create silos that makes it difficult to

share information

The problem is also culture, skills and leadership.

There is genuine resistance to change

The current issue

Need to exploit the next generation of business

technology that is faster to deploy, more agile and

designed to openly share data

The hallmarks of this approach will be:

– Autonomous and cleansed data

– Services-oriented business technology

– Corporate commitment to governance disciplines

Building blocks

Enabled by Modularized Technology

• Business agility and rapid collaboration

require the transformation from rigid and

purpose-built IT structures into multi-use,

component-based technology capabilities

which allow for easy assembling or

dissembling according to business needs.

‘ from train to scooter’

4



Way forward for companies

Based on the research-based framework of MIT Centre of Digital Business and Capgemini (‘ Leading Digital’)

‘It is up to individual

companies to rewrite

strategies and adopt

collaborative cultures

so they can generate

value from networked

economies and

consumers’

Va

lue

Ne

two

rk C

ap

ab

ility

Value Network Leadership

The What

The How

Customer

ExperienceOperations

Business

Models

Vision Culture Governance Technology



In summary…

Enabled by Modularized Technology

The last mile of distribution

Reconsidering the assumption that it is an area

where companies operate independently of each

other, and exploring opportunities to collaborate

Consumer engagement

Taking part in a dialogue with consumers,

justifying their trust in the industry

Transparency

Keeping consumers informed about products’ key

attributes, ingredients, nutrients and provenance

as well as their environmental and societal

impacts

1

2

3

4

‘Let’s help ensure that future value networks strengthen our industry

and benefit consumers through the challenges that lie ahead’



business

Discussion

www.futurevaluenetwork.com

Thank You !

ECR Leaders' Forum - Rethinking the Value Chain: CGF Cap Gemini

Business

Transcript of ECR Leaders' Forum - Rethinking the Value Chain: CGF Cap Gemini