BuilDing stRAtEgiEs FOR thE nEW DEcADE FUTURE VALUE CHAIN Additional sponsorship from
Key Trends Discussed Key Trends Discussed Key Trends Discussed • Society/Spread of WealthACKnoWLeDGMents • Sustainability Mike Fitzpatrick, nestlé • Aging population Ben newton, Woolworths • Technology-Enabled Consumers • Technology-Enabled Consumers Peter Florenz, Henkel • Sustainability erland nielsen, Gs1 Denmark • Health and Wellbeing (including Safety) • Health and Wellbeing nicolas Florin, Gs1 switzerland Alejandra • Technology-Enabled consumers Montes de oca, Gs1 MéxicoThe Consumer Goods Forum (TCGF) Rob Fox, JM smucker Company Donna olszowka, Georgia-Pacific Key Initiatives Identiﬁedwishes to thank the following executives Bernard Key Initiatives Identiﬁed Fradin, Kraft Foods Fernando Key Initiatives Identiﬁed orozco, sigmafor their•time, a Healthand valuable insight For support Mexico xavier Franco, Johnson & Chain • Shared Supply Johnson • Supply Chain Collaboration Benoît Pacaud, Capgeminiinto the• Supply Chain Information Sharing 2020 Future Value Chain: Paulette • Industry Sustainability Frank, Johnson & Johnson • Consumer Distribution serge Papin, système U • Mobility and Safety onno Franse, Ahold of Working Together • New Ways Meena Patel, Capgemini Models and Platforms • New Business David Friedler, Procter & Gamble Miguel Angel Peralta, Gs1 México2020 Future Value Chain Project Team Alejandro Fuster, Capgemini Clyde Pereira, Coca-Cola Hellenicsabine Ritter, the Consumer Goods Forum MEXICO UNITED STATES Jorge Garcés D., tiendas Garcés NETHERLANDS Philip Petersen, tFLCnigel Bagley, Unilever Pierre Georget, Gs1 France Gérald Poncet, CapgeminiDr. Gerd Wolfram, Metro Group Peter Gietelink, Gs1 netherlands Jörg Pretzel, Gs1 GermanyKees Jacobs, Capgemini Gemma Gordon, Macklin transport Chris Purcell, onesteelMicha van Meeteren, Capgemini nina Groothuijzen, Microsoft Bo Raattamaa, Gs1 swedenBrian Girouard, Capgemini María Asunción espinosa Guzmán, Capgemini David González Ramirez, Gs1 MéxicoPriscilla Donegan, Capgemini Lorike Hagdorn, tno/VU Roberto Rocha Ramirez, Bimbo Bram Hage, Partner Logistics tero Rautsola, Gs1 Finland2020 Future Value Chain Steering Group Ruediger Hagedorn, the Consumer Goods Forum Giedre Razinskiene, Gs1 Lithuaniaellen Gladders, tesco Michael Haines, Westgate Ports Katrin Recke, eCR europetony Vendrig, Ahold elzbieta Halas, Gs1 Poland Bob Richardson, Clorox Companysaliha Barlatey, nestlé August Harder, Coop Pascal Rigaud, Danone eaux FranceJim Flannery, Procter & Gamble Derek Harris, Aust Rail track Corp eduardo Rios, BimboMilan turk, Procter & Gamble Carlos Hernández, Gs1 México Francisco Javier Rodríguez, Kraft FoodsJohn Phillips, PepsiCo, Inc. Gerardo Zwieger Herrán, PepsiCo, Inc. José Luis Ibañez Rojas, La CosteñaPhilippe Lambotte, Kraft Gregor Herzog, Gs1 Austria Leticia González Romero, Pasión Mexicana Fred Holvast, Heineken nederland supply Ian Ross, Australian Logistics Council (ALC)Bruno Aceto, Gs1 Italy Jos van Huizen, nestlé nederland sharon Rossi, UnileverChris Adcock, Gs1 Daryll Hull, ALC/transport and Logistics Centre Dave Rost, sC Johnson & sonMaria teresa Aguilar, Capgemini Ian Hunter, national transport Commission (ntC) Will Ruiz, HPerik Angot, nestlé France Monica Hysell, Abbott nutrition François Rullier, ILeCFlor Argumedo, Comercial Mexicana Miroslav Ilic, Gs1 serbia sabina saksena, Gs1 UsRicardo Ausin, Kraft Foods sigmund Berle Jensen, Gs1 norway Rodolfo osnaya salas, sC Johnson & sonDavid Bailey, Microsoft sharon Jeske, the Consumer Goods Forum David salisbury, ACCCtim Beckmann, Kuehne + nagel nigel Jesson, Gro-Market Logistics Jean-Marc saubade, the Consumer Goods ForumJohan Boeijenga, Jumbo Marisa Jimenez, Gs1 trip shutze, the Coca-Cola CompanyFrans van den Boomen, Mars nederland Jeff Johnson, sC Johnson & son Rimantas sidlauskas, Gs1 Lithuaniaetienne Boonet, Gs1 Belgilux Richard Jones, Gs1 olivier siegler, CapgeminiFrits van den Bos, Gs1 nederland stewart Jones, Commonwealth DItRDLG Andrew smith, PepsiCo, Inc.Jim Bracken, Gs1 Ireland Laurence Jumeaux, Capgemini Jan somers, Gs1 BelgiluxBob Branham, General Mills, Inc. Klara Karivan, Gs1 Croatia Alejandro souza, CapgeminiDale Brockwell, Kraft Foods Rob Karman, spar International Franz speer, HenkelChris Brooks, Woolworths David Ketszeri, Gs1 in europe Greg spiker, QantasClay Broussard, PepsiCo, Inc. Manvendra Khati, Capgemini Peter swan, AmwayJean-Michel Bru, Carrefour Michael Kilgariff, Australian Logistics Council nadia taleb, Gs1Duco Buijze, Lekkerland Mehmet Kunter, Unilever Marnix tax, sara Lee InternationalJoe Burton, Mars Petcare Us olivier Labasse, eCR France Marianne timmons, WegmansBrett Campbell, Graysonline Dominique Lacaze, Bel Alejandro Reyes torres, UnileverJeff Chahley, Kraft Foods Hervé Laureau, Unilever todd turner, Grocery Manufacturers AssociationBen Church, Bluescope steel Grégoire Lebret, nestlé France Mauro Ungheretti, GnDPavla Cihlarova, Gs1 Czech Republic enrique Legorreta, Kraft Foods Victoria Garcia Urrutia, PepsiCo, Inc. FUTURE VALUE CHAIN : A GLOBALted Combs, Microsoft Philippe Lemoine, Laser Luis Ricardo Valencia, Capgeminiscott Craig, Delhaize America eduardo Leon, Procter & Gamble Micha Veenman, BakkerslandRoland Dachs, Crown europe PROGRAM WITH LOCAL RELEVANCE Patrick Lheure, Capgemini Fokke van der Veer, Unilever Beneluxnathalie Damery, Gs1 Chris Librie, sC Johnson & son Liliana Villalpando, Gs1 Méxicothierry Desouches, système U Mary Long, Campbell soup Mario Vollbracht, HPIvanny Ramos Díaz, PepsiCo Miguel Lopera, Gs1 tom Vuorinen, CapgeminiIngilby Dickson, Bluescope steel The Future Value Chain initiative is largely based on the outcomes of local, regionalAnn Dozier, the Coca-Cola Company Ciprian Losep, Gs1 Romania Luk van Wassenhove, InseAD Gary Lynch, Gs1 UK Dave White, Capgemini and global workshops with participants from the consumer goods and retail industry.Rose elphick, VFLC nicola Macniven, Procter & Gamble Michael Whiting, Johnson & Johnson ConsumerAlfonso Franco endo, La Costeña For the 2020 Future Value Chain project country-speciﬁc workshops took placeHans erdmann, Claessens erdmann Chris Mangan, QMMFC Christine Whitney, Wegmans Juergen Matern, Metro Group Colleen Wickering, Meijer in Australia, France, Mexico, Netherlands and the United States, and a regional work-Mario escárcega, Gs1 México Kerry Mcnair, the Coca-Cola Company Hans Wielinga, BakkerslandMario Padilla espinosa, Unilever shop took place with GS1 in Europe. For the 2018 Future Value Chain project countryGlenn exton, HP Leona Meikle, Land o’ Lakes, Inc. Jill Wilkinson, Capgemini eduard Molkenboer, DHL Robert Wilkinson, the Coca-Cola Company workshops were held in India and Japan and a regional workshop for Southeast AsiaBob Fassett, Capgemini Rafael tena Morelos, ConAgra Foods troy Witt, Clorox Companyxavier Filou, L’oréal Paul Woltering, Akzonobel Coatings took place in Hong Kong. The objective of these workshops was to examine the mostneil Findlay, QtLC Ian Munro, Kraft Foods neil Murphy, sAFC neil Wong, national transport Commission (ntC)timothy Fischer, Bumble Bee Foods relevant trends from a local and regional perspective, and from there to deﬁne andGinny Fisher, Capgemini Hugo sánchez neri, Capgemini Jacob Yau, Chiquita Helen newell, Asciano Pieter Zwart, Coolblue B.V. develop initiatives that could help address these trends.
2 2020 Future Value Chain Building strategies for the new Decade FOREWORDFrom Nigel Bagley, Unilever, and Dr. Gerd In the five years that the Future Value And in this year’s workshops we haveWolfram, METRO Group, Co-Chairmen, Chain initiative has been operating, seen, again, fantastic participation2020 Future Value Chain more than 400 professionals from and concrete outcomes: our industry have directly engagedthe Future Value Chain initiative operates in workshops that have taken place � In Australia the workshop teamon two connected and complementary in europe, north America, Latin is now working with governmentplatforms: the report and the workshops. America, Asia and Australasia. on establishing the blueprint for a collaborative supply chain.In your hand is the third Future Value It is at the workshops that the FutureChain report, “Building strategies for Value Chain project comes alive. � In the netherlands and Mexico thethe new Decade.” this report lays out Participants leave the workshops output from the workshops has be-the trends that will most impact our excited and enthusiastic. come the central theme for thosebusiness over the next 10 years. It countries’ industry programs.presents the strategic objectives that During the 2008 workshops, in Hongwill help us, as a collective industry, Kong, a participant from a regional � A communication platformto continue to meet the needs of our retailer told us: “In the 10 years I have developed in the U.s. workshop isever-changing shoppers, consumers been in this industry, I have never now being adapted for global useand communities. And it demonstrates before sat down with my industry as part of the Consumer Goodshow the programs under way in the partners and talked frankly about how, Forum’s “Knowledge sharing” pillar.Consumer Goods Forum will help by working together, our industry canus to achieve those objectives. better serve our joint consumers.” � the “Gs1 in europe” workshop has resulted in significantly betterBut it is on the second platform, In the same year, in India, we were alignment between national Gs1the workshops, that the Future told that “this workshop has brought programs and the global vision.Value Chain, we believe, now together leaders from the biggestprovides the biggest benefits. businesses in India in a way that has never happened before.”
FOREWORD 3since this last round of workshops we From Jean-Marc Saubade, Managing sustainability, the shared supply Chain,have also seen many national associa- Director The Consumer Goods Forum Consumer technology and Health andtions, as well as individual companies, Wellbeing are all topics that we addressinitiating their own workshops based It is with great pleasure that we share today and will continue to addresson the Future Value Chain framework. this third Future Value Chain report tomorrow. And we look forward to the with you. Future Value Chain initiative continuingthis is where the real success of the to help us bring the right focus acrossprogram lies; in the way that the this initiative is one of the cornerstones our portfolio.principles and concepts are being of the Consumer Goods Forum programadopted across our industry to drive and continues to bring valuable and success, though, comes throughreal collaborative action that delivers usable deliverables into the Forum. implementation of these programs byvalue to our consumers. our members and across the industry. this current report uniquely provides us In this, I ask for your continued supportour reward for leading this initiative with the opportunity to consider the and engagement on the Forum’sis to see and hear that enthusiasm. many activities that we have under way initiatives and projects. in the Consumer Goods Forum in relation to the 10-year vision for our industry. In particular, we can review our program against the industry objectives that have emerged from the workshops. I am pleased to see that the initiatives and projects under way across the Forum’s five strategic pillars are right on track to deliver these objectives.
4 2020 Future Value Chain Building strategies for the new Decade ExEcutivE summARyWhat do you want to achieve in 2020? Are you focused on makingyour business more sustainable, optimizing a new shared supplychain, engaging with technology-enabled consumers or helpingconsumers improve their health and wellbeing? Do you expect toachieve all this by yourself, or will you look for collaboration?our ability to achieve these objectives this new report provides theis essential for the success of the industry and companies with theconsumer goods industry over the framework – in the form of trends,coming decade. this lies at the heart of objectives and tactics – to buildthe 2020 Future Value Chain project. strategies and action plans for 2020. And the time to act is now.In the conclusion of the prior “2018Future Value Chain” report, we noted Trends: What Is Driving Our Objectivesthat the difference between success and the first phase of the 2020 Futurefailure in the consumer goods industry Value Chain project involved identifyingin the next 10 years would be our and analyzing the trends that will haveability to adapt to rapid and significant the greatest impact on our industrychange. this is still true. However, it in the coming 10 years. twelve globalis clear that success will also require root trends were identified that addressfocused strategies and effective change in society, shopper behavior,tactics – for individual companies environment and technology.and for the industry as a whole.
ExEcutivE summARy 5 “2020 Future Value Chain” on the Web more information about the “2020 Future value chain” report and program can be found at www.Futurevaluechain.com.1. Increased Urbanization and the 3. Increasing Spread of Wealth 5. Increase in Consumer Service rise of megacities will impact will lead to a growing middle Demands will define new service the size of stores, logistics class in developing regions, models, offered via the Internet, and the supply chain, and impacting consumption and that move beyond selling distribution infrastructures, availability of food items and individual products and will bring among other factors. providing a source of growth for different types of “solutions” manufacturers and retailers. to consumers and shoppers.2. Aging Population will have economic and political 4. Increased Impact of Consumer 6. Increased Importance of Health consequences related to the Technology Adoption will be and Wellbeing will have significant amount of money spent on reflected not only in consumers’ ramifications as sales of healthful necessities like food and drink, own behavior but also in their products and services are and the type of delivery services, ability to influence the buying expected to nearly quadruple store formats and locations behavior of other consumers in the coming five years. offered to older consumers. as the use of social and digital media continues to spread.
6 2020 Future Value Chain Building strategies for the new Decade ClOSE-UP ON COUNTRIES LoCAL IMPACt In A GLoBAL Context During the course of the 2020 Future Value on developing a sustainable supply chain with a Chain project, a series of workshops was held, goal of helping to shape the overall sustainability including a global session, a pan-european agenda. In the U.s. the team determined workshop and country-specific workshops in that creating a sustainable value chain and Australia, France, Mexico, netherlands and the engaging with technology-enabled consumers United states. these markets were selected to were particularly relevant in their market. In provide a broad cross-section of the industry. Mexico the group focused not only on trends the objective of these country workshops was to like technological developments and product examine the most relevant trends from a local safety, but also on crime and national security. perspective, and from there to define and develop initiatives that could help address these trends. throughout this report, you will find sidebars that take a close-up look at the country workshops. All workshops used the same Future Value Chain note: For a closer look at Asia, please see the framework and globally identified trends as the earlier report, titled “2018 Future Value Chain: starting point, but each country workshop had its succeeding in a Volatile Market,” which highlighted own specific focus, depending on the market. For the results of similar workshops held in Hong Kong example, in Australia the group chose to focus (focused on southeast Asia), India and Japan. 7. Growing Consumer Concern about Objectives: What We Want to Achieve Sustainability will lead consumers to look the overall impact of these root trends is to governments and companies to play a significant, and will require a fundamental major role in combating climate change. change in the way consumer products companies and retailers run their businesses 8. Shifting of Economic Power to countries and serve consumers and shoppers. things like China and India will cause trade not only need to be done differently, they areas to evolve and a new generation also need to be done collaboratively. By of globally competitive companies from working together – not only as an industry these developing markets to emerge. but also with governments, nGos and consumers – we can achieve collectively 9. Scarcity of Natural Resources like energy, what none of us can achieve alone. water and food will become a growing issue as demand is projected to outstrip easily the analysis of the trends was the starting available supplies over the next decade, point to help the industry determine what our resulting in increasing production costs. strategic objectives – defined as “what we want to achieve” – should be for the next 10 10. Increase in Regulatory Pressure will be seen years. the 2020 Future Value Chain project particularly for hot-button areas like the went through a thorough process to identify the environment, sustainability and food safety. global strategic objectives on which the industry should focus. the objectives identified were: 11. Rapid Adoption of Supply Chain Technology Capabilities will enable a 1. Make Our Business More Sustainable more synchronized value chain with greater visibility and traceability. 2. Optimize a Shared Supply Chain 12. Impact of Next-Generation Information 3. Engage with Technology-Enabled Consumers Technologies like cloud computing will lead to a new way to deal, jointly, 4. Serve the Health and Wellbeing of Consumers with business and technology in the consumer goods industry.
ExEcutivE summARy 7the trends link to these objectives. For includes a company track that can be usedexample, trends such as scarcity of to help businesses develop long-term actionnatural resources and increased regulatory plans to respond to the external trends.pressure will be direct change drivers forthe industry’s supply chain in the coming 2. Implement the relevant tactics and ideasdecade. And the rapid adoption of consumer from the Future Value Chain initiative.technology and the increase in consumer In addition to industry global, regionalservice demands will require industry and and local programs, many initiatives thatcompanies to rethink the way they engage address the four strategic objectives arewith technology-enabled consumers. already ongoing inside companies. A sampling of these initiatives is presented inthese four industry objectives are not this report to offer ideas and inspiration.only relevant at the global level; they alsoapply at the regional and country levels, 3. Challenge yourself to see how robustalthough sometimes with differences in your 2020 strategy really is. of course,their “accents” and degree of impact. your company already has strategies in place. And of course, you believe thatTactics: How We Will Achieve Our you are addressing the trends in theObjectives as an Industry market that are relevant to you. But isAfter knowing what we want to achieve, the your strategy really robust in the contextnext step is to determine how to achieve it. the of the rapid and dramatic changes thatgood news is that we don’t have to start from will impact the industry over the nextscratch to develop tactics that address the 10 years? We recommend you challengefour global strategic objectives. A wide range yourself with the list of questionsof global programs are already in place, as presented near the end of the report.demonstrated by a review of current initiativesrun by the Consumer Goods Forum under the A Call to Action for the Industryorganization’s pillars of sustainability, safety the conclusions of the report are clear:and Health, and operational excellence. � to be ready for 2020 (and 2018Matching the four strategic objectives with and 2016) we need to increase thethe current scope and strategic priorities collaboration across our industry.of the Consumer Goods Forum shows goodalignment. All four objectives are addressed � the Consumer Goods Forum companiesin global industry initiatives and projects, need to fully support the Forum programsmany of which are outlined in this report. – and the appropriate regional andthe respective global, regional and local local programs that are under way.organizations will need to continue to workclosely to align their activities, provide � Companies across our industry needcompany-driven focus on some key priorities to challenge themselves on howand help avoid duplication of efforts. prepared they are for 2020.How to Use the Future Value � Companies should use the Future ValueChain in Your Company Chain framework to develop a strategy andFrom the first Future Value Chain project in tactical plan that responds to the external2006 it was clear that companies were taking shopper, consumer and societal trends.the Future Value Chain ideas and output andusing them internally to drive their own thinking the following pages provide a close-up lookand actions. inside the 2020 Future Value Chain: the trends that will have the greatest impact onthere are at least three ways companies can the industry for the coming 10 years; theleverage the Future Value Chain in their own objectives on which the industry should focus;business: and the tactics that will help us achieve these objectives. We strongly recommend you1. Apply the Future Value Chain framework read the full report to evaluate what actions inside your company. the recommended you need to take today to ensure that our and proven three-step Future Value Chain companies and our industry are ready for framework (trends, objectives, tactics) the challenges and opportunities of 2020.
8 2020 Future Value Chain Building strategies for the new Decade thE EvOlutiOn OF thE FutuRE vAluE chAinA windowless hotel meeting room at schiphol Airport in Amsterdamwas the birthplace, in 2005, of the Future value chain initiative.in the room was a handful of executives from leading manufacturersand retailers who were meeting to discuss how our global industryassociations could move to the next level in facilitating collaborationacross our industry. collaboration that would bring benefit to ourshoppers and consumers as well as removing inefficiency from ourshared business activities.the consideration of this next level development of a series of businessdid not imply that the industry case reports by the Global Commercewas not progressing well on areas Initiative on programs such asof collaboration. In fact, the first Global Data synchronization andfew years of the new century saw the electronic Product Code.tremendous progress, including themerging of eAn and UCC to create so, you might ask, why did theGs1, the collaborative principles people in that schiphol meetingof eCR being institutionalized room think there was a needwithin our businesses, and the to look for another level?
thE EvOlutiOn OF thE FutuRE vAluE chAin 9the answer was simple. Much of the the explosion of consumer At the schiphol meeting the view wassuccess taking place around the in- communication and technology – taken that while we, as an industry,dustry activity was based on concepts from social networking to the mobile should continue to fully supportand ideas that had been developed Internet – is perhaps the most the programs under way, we alsoin the 1990s or even earlier. But the visible change. But if you cast your needed to establish a think tank thatnew century was bringing change at a mind back 10 years, how focused would develop a collective futurephenomenal pace, change that would was your company in 2000 on vision and response for our industryfundamentally impact our industry and environmental sustainability, obesity in light of the rapid changes.would trigger the need for new collabor- or increasing regulatory pressure?ative business models for our industry. Hence the establishment of the Future Value Chain initiative.
10 2020 Future Value Chain Building strategies for the new Decade the objectives were clear. the Future From the outset, clear principles Value Chain initiative would: were also established: � Provide the consumer goods industry � the initiative would publish a report with a comprehensive, connected and every two years that would be based updated view of the critical trends that on a 10-year perspective. will impact companies over the coming decade, with a goal to identify action � Input would come from workshops that plans that address these trends. would bring together experts in marketing, supply chain, sales, commercial and � Identify key areas where we believe across the business. this would ensure companies should collaborate in order to that the initiative reflected what our successfully manage the value chain. industry felt – it would truly be an initiative by the industry, for the industry. � Identify, initiate and implement appropriate industry activities. � While the initiative would benefit from the support of consultants it would not be a consultant project.1 2016: A Vision of the Future Value Chain that prevent it, the benefits that can be In mid-2006 the 2016 Future Value derived from doing so, and the possible Chain project kicked off with two global technical solutions that could enable it. workshops that involved nearly 80 people. � The industry must Develop New Ways of the resulting report, “2016: the Future Value Working Together. A senior executive team Chain,” was launched in late 2006. the was established to address innovative forms report laid out a series of scenarios of how of collaboration between manufacturers and our consumers would behave and how our retailers. Aimed at stimulating sustainable industry would operate in 2016. each of the changes in culture, collaborative business report’s three key findings led to the creation planning and new measures and rewards, the of a global industry project. the findings were: new Ways of Working together framework has been adopted for the Consumer Goods � The industry must Redefine the 2016 Forum’s operational excellence pillar. Supply Chain. the ensuing project has specifically focused on the industry’s the report was well received across the physical supply chain and has designed an industry. Regional and national associations integrated supply chain model that takes (including eCR and Gs1) took the report to into account sustainability parameters heart and starting aligning their programs to the as well as traditional measures.2 report outcomes and to the three new global projects. Individual companies internalized � Trading partners must more readily and the findings, challenging their own business to freely Share Information in their Bi-Lateral see how prepared they were for 2016. Board- Relationships. to address this a project level presentations at a number of companies was launched to examine how the industry confirmed the significance of the findings. can better share information, the barriers 1 in this respect the project has benefited in the past five years from the support of capgemini, which has acted as lead consultant and has provided independent facilitation of the workshops and reports. 2 For more information see www.futuresupplychain.com.
thE EvOlutiOn OF thE FutuRE vAluE chAin 112018: Succeeding in a Volatile Market one of the takeaways from the 2018 reportFor the second iteration of the initiative was that despite the apparent differencesin 2008, the team decided to drill among regions and countries, the regionaldown from a global perspective to priorities and the local priorities were nearlyregional and national levels. always fully aligned. At all levels the need for greater collaboration and improved efficienciesthe choice of region to focus on was simple: are apparent. Countries may be at differentAsia. In addition to the rapid economic growth places on a spectrum but it was the same,in the region, Asia also contains extremes on globally applicable spectrum. this meantjust about every aspect of our industry. An that global collaborative programs really areemerging middle class on one hand, a massive applicable at regional and national levels andlow-income population on the other. Rapid that learning in one market can easily benefitmigration to urban environments coupled other, seemingly very different, markets.with vast under-populated rural expanses.Global leadership in technology in a regiondominated by a supply chain infrastructuredecades – and, in some cases, centuries – old.2020: Building Strategies for the New Decade Value Chain initiative. the focus shifted toAs a result of the outcomes of the Asian providing a framework to help the industryworkshops several regional and national and individual companies understand theassociations approached the Future Value trends that impact our business, envision howChain team through 2009 looking to run they will impact, and then formulate plans toworkshops in their markets to help them benefit our business from those changes.build their own industry work plans. Collaboration and, of course, the globalthis, coupled with the use by member industry projects under way in thecompanies of the “2016 Future Value Chain” Consumer Goods Forum would remainreport internally to trigger long-term strategic the platform for resulting actions.planning, led to a refocusing of the Future
12 2020 Future Value Chain Building strategies for the new Decade The Future Value Chain Framework the framework allows for two tracks: an the Future Value Chain framework was industry track and a company track. developed in an iterative process throughout the eight workshops that took place in the industry track would be used by global, the 2020 project between February and regional and national associations to formulate september 2010. the framework’s roots are strategic non-competitive industry objectives in the “scan,” “focus,” “act” methodology and to set a tactical agenda based on that has been used successfully in all collaboration. the company track would be the Future Value Chain project workshops used by individual companies to set their own since the initiative started in 2005. strategic objectives and competitive agenda. these three phases have now For both the company and the industry been translated to: tracks, however, the starting point – trends – would be the same. � Trends: Understanding what is happening in our world and how it will impact our industry It is also the case that industry objectives or organization in the next 10 years. and company objectives should have common themes. And, in the tactics, a company may � Objectives: Identifying where the include engagement with trading partners on industry or organization wants to be in industry projects as part of its tactical plan. 10 years, what it wants to achieve. so the two tracks are continually connected. � Tactics: the activities that must start While different countries or regions may now to enable the industry or organization have different priorities, we have found to achieve its 10-year objectives. that the same trends and objectives come through at both the global and local levels. through a facilitated workshop, project participants progress through the three this new report presents the findings from phases, arriving at a set of tactics that will the 2020 Future Value Chain workshops and help them achieve their objectives and be provides the industry and individual companies well positioned for the anticipated trends. with the framework to plan for 2020. BUILDInG stRAteGIes FoR tHe neW DeCADe TRENDS OBJECTIVES TACTICS Global Programs INDUSTRY Industry Regional Programs TRACK Strategic Objectives Local Programs Trends Industry Collaboration Tactics COMPANY Company 1:1 Collaboration Tactics TRACK Strategic Objectives Competitive Tactics
thE EvOlutiOn OF thE FutuRE vAluE chAin 13JUST THE FACTS tHe FUtURe VALUe CHAIn InItIAtIVe What started in 2005 with a handful of executives 2018 Future Value Chain from a few leading manufacturers and retailers � the 2018 project involved 130 participants has grown over the years to include more than representing local and international retailers 400 participants from across the industry as and manufacturers, third-party partners, well as academia, logistics service providers, academia and industry associations. consultants and subject matter specialists. � Four workshops were held: a global workshop Consider a few facts about the Future Value Chain: in Utrecht, the netherlands; an Asian regional workshop in Hong Kong; a Mumbai workshop 2016 Future Value Chain focused on the Indian market; and a tokyo � the 2016 project involved two global workshop focused on the Japanese market. workshops held in Utrecht in the netherlands and Chicago in the U.s. 2020 Future Value Chain � the 2020 project involved nearly 200 � Participants comprised nearly 80 people participants in eight workshops. from retailers, consumer products manufacturers, logistics service providers � two global workshops were held, one at the and technology companies. start of the project in Brussels, Belgium, and one at the end that took place at � the project was led by the Global Commerce Les Fontaines (Chantilly) in France. Initiative and endorsed by AIM - european Brands Association, CIes - the Food Business � A regional workshop was held in Antwerp, Forum, eCR europe, Food Marketing Institute Belgium, for Gs1 in europe, along with (FMI), Grocery Manufacturers Association country workshops in Australia, France, (GMA), Gs1, Gs1 Us and Voluntary the netherlands, U.s. and Mexico. Interindustry Commerce solutions (VICs). While different countries or regions may have different priorities, we have found that the same trends and objectives come through at both the global and local levels.
14 2020 Future Value Chain Building strategies for the new Decade tREnDs: WhAt is DRiving OuR OBjEctivEs the speed of change is accelerating. Organizations and industries must respond faster and faster. But how do we ensure that change happens for us instead of to us? And that decisions are made with full information? the first phase of the Future value chain framework addresses these questions by identifying and analyzing the trends that will have the greatest impact on the industry for the coming 10 years.
16 2020 Future Value Chain Building strategies for the new Decadestarting with extensive research as a the combined effect of trends will also resultfoundation, the trends and scenarios were in new trends being identified. For example,developed with engagement and input from the growth of online shopping is a trenddifferent functions and backgrounds across that is driven by four of the 12 global rootthe industry as well as input from academia trends: increased urbanization (in denselyand consultants – all jointly addressing these packed cities smaller retail outlets will nottrends from their different perspectives be able to carry the range that shoppers askthrough facilitated interactive workshops. the for but home delivery can source from thenet result is seeing beyond the obvious. wider assortment of a warehouse), the aging population (older people don’t want to carryFor the 2020 Future Value Chain project heavy shopping bags back from the store – and12 global root trends were identified they are computer literate!), the increasedthat address change in society, shopper impact of consumer technology adoption andbehavior, environment and technology. the increase in consumer service demands.these trends should not be considered in the Future Value Chain approach of lookingisolation. It is important to understand the beyond the ordinary and identifying theinfluence that the trends have on each other. unexpected consequences of the rootIncreasing urbanization, for example, can trends is instrumental to the developmentimpact availability of resources; the increasing of the industry strategies and tactics.spread of wealth is a factor driving the shift these global trends provide an excellentof economic power; and rapid consumer starting point for any organization embarkingtechnology adoption has led to greater service on a Future Value Chain project.demands in the web-based economy.let’s have a closer look at the 12 identified root trends.1. Increased Urbanization Among the consequences of urbanization SURVIVING INover half of humanity now lives in cities, and for the consumer goods and retail industry MEGACITIESthere is no end in sight for urban growth. By will be a shift to smaller-footprint stores,2050, roughly 70% of the world’s population with no room for unproductive inventory. Inwill live in urban centers.3 the number of addition, the industry will face significantcities with populations greater than 8 million supply and logistical challenges, and newis expected to double by 2015.4 Many of these distribution infrastructures willmegacities will be in Asia, but also in Africa, be required. the industry has aneurope and Latin America. By 2020, Mumbai, opportunity to work with cities thatDelhi, Mexico City, sao Paulo, new York, will massively invest in modernizingDhaka, Jakarta and Lagos all will have achieved and expanding their infrastructures.metacity status (more than 20 million people).53 “siemens anticipates massive investments worldwide in sustainable urban infrastructure,” 360 Degree view of money, http:// www.sathyamurthy.com/finance/2009/12/siemens-anticipates-massive-investments-worldwide-in-sustainable-urban- infrastructure/#ixzz13y8PjRmA, nov. 25, 20094 “long term global Demographic trends: Reshaping the geopolitical landscape,” ciA, 20015 “un-habitat: state of the World’s cities 2006/7,” un-hABitAt, 2007
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tREnDs: WhAt is DRiving OuR OBjEctivEs 17Older consumers have substantial economic power and devote a greaterproportion of their total expenditure to necessities like food and drink.2. Aging Population the needs of an older population. thisthe aging of societies will have unexpected might include shuttle services, more home POWEReconomic and political consequences. the viewof an older population as being relatively poor delivery, wider aisles, stores in nursing homes and assisted-living facilities, large- TO THEdoes not hold up. older consumers, in fact, print labels, among other developments. SENIORShave substantial economic power and devotea greater proportion of their total expenditure At the same time, population aging willto necessities like food and drink and housing, likely depress growth rates in advancedfuel and power than do younger households.6 economies, while more youthfulIn many countries, consumers 50 and older developing countries may enjoy a growthmay soon represent the majority of the boost as working-age populations increase.voting public, making it harder to implement even with productivity increases, slowerpolitical policies that adversely affect them.7 employment growth caused by the shrinking workforce in some countries will likely reduceRetailers will need to consider changes already tepid GDP growth, impact laborto their business model to accommodate supply and put pressure on social programs.3. Increasing Spread of Wealth the rise in the developing world’sthe middle class, particularly in developing middle class will lead to an increase SAY HELLOregions, is rapidly expanding, with the in consumption, which may have TO THE NEWpopulation in low- and middle-income implications for availability and price MIDDLE CLASScountries with purchasing power parity of commodities like oil and food-(PPP) expected to triple by 2030.8 In stuffs. It may also result in protectionist2000, developing countries were home to policies by countries with a middle class56% of the global middle class; by 2030 that feels threatened by growth abroad. Butthat figure is expected to reach 93%.9 the new middle class will also be the source of growth for manufacturers and retailers.6 “is business ready for an ageing nation?” Department for Business innovation & skills, march 20107 “how will demographic change affect the global economy?” www.imf.org, 20048 “global Economic Prospects,” the World Bank, 20079 “the new global middle class: Potentially Profitable – but Also unpredictable,” Knowledge@Wharton, july 2008
18 2020 Future Value Chain Building strategies for the new Decade4. Increased Impact of Consumer the use of these new tools will impact ALWAYS WIRED Technology Adoption not only consumers’ own behavior but will IS A WAY OF LIFEover the next 10 years, shoppers will continue also influence the buying behavior of otherto become more empowered through the consumers as the use of social media continuesuse of new communication technologies. to spread. Keys to success will be selectingthe growth of mobile features and device the right social communities to effectivelyconvergence such as wallet phones will drive interact with the target consumer groups,mobile commerce. By 2013 more than 2 managing communication on the sites,billion mobile users globally will have made and determining how to leverage the hugea purchase via their handsets.10 At the same amounts of online consumer data. Consumertime, store visits will be enhanced by dynamic products and retail companies will need todigital displays and personalization through a become more transparent and collaborativehand-held device or the customer’s own phone. in their interactions with shoppers while keeping a close eye on privacy concerns.5. Increase in Consumer Service Demands Internet: over the next decade the AT YOURthe exponential growth and adoption of online channel will grow to 25% SERVICE …consumer technologies will drive new levels of to 30% of total retail sales, up ON THEservice demands by shoppers and consumers. from the current 4% to 15%.11 INTERNETWe will see the rise of a stronger web-basedservice economy, giving consumers greater this trend will also define newchoice of shopping options and improved service models, offered via thetransparency. In this environment, consumers Internet, that move beyond sellingwill expect and demand services 24/7. the individual products and will bringmost prominent occurrence of this trend is different types of “solutions”shown by the expected impact of sales via the to consumers and shoppers.6. Increased Importance of Health sustainability) will help drive the safety and Wellbeing and health market in the next decade. COUCH POTATOES ARE OUT!Health, safety and wellbeing are increasinglyimportant to consumers as well as to In the U.s., for example, the LoHAs marketmanufacturers and retailers, and will have is estimated to comprise approximatelysignificant ramifications in the future as 19% of the adult population, representingshoppers place greater attention on more a market of 41 million consumers.12 saleshealthful products as well as healthier from LoHAs consumers are expected tolifestyles. emerging consumer segments nearly quadruple in the coming five years.like LoHAs (Lifestyles of Health and10 “Fifth of online retailers use mobile microsites to push promotions,” Retail Bulletin, november 200811 “Future channel shopping,” capgemini, 200912 “going green: the Future of the Retail Food industry”, www.ats.agr.gc.ca, march 2009
tREnDs: WhAt is DRiving OuR OBjEctivEs 197. Growing Consumer Concern exposed to carbon-emissions CARBON about Sustainability costs and future regulation risks FOOTPRINTConsumer awareness and carbon-footprint due to their relatively high levels SCARIERregulations are expected to significantly of emissions compared with THANincrease, as consumers look to governments revenues. Waste is also becoming BIGFOOTand companies to play a major role in combat- a key focus of sustainabilitying climate change. According to the natural discussions. In the food industry,Marketing Institute (nMI), the green market- in particular, there are major waste lossesplace in the U.s. is predicted to grow from due to inefficient processes across the value$420 billion in 2010 to $845 billion by 2015.13 chain. At the consumer level, 14% to 26% of purchased food in the United states andFood and beverage and personal and around 25% of food and beverages in thehousehold goods sectors are particularly United Kingdom are wasted in households.148. Shifting of Economic Power from developing markets will emerge, helping THE POWERS OFIn the next decade new economic powers to further solidify their position in the global TODAY WILL NOTlike China and India will continue to rise. marketplace: Brazil in agribusiness and off- BE THE POWERSChina’s share of total world GDP in terms shore energy exploration; Russia in energy and OF 2020of PPP has increased from 7.1% in 2000 metals; India in It services, pharmaceuticalsto 13.3% in 2010 and is expected to reach and auto parts; and China in steel, home ap-20.7% by 2020. China will overtake the pliances and telecommunications equipment.U.s. to become the world’s largest economyas early as 2017.15 And by 2012, India will the recent recession has severely affectedhave overtaken Japan to become the world’s the global commodity markets, therebythird largest economy, with GDP accounting calling into question the impact futurefor 5.8% of the world total in PPP terms.16 recessions may have on global economic growth across most industries. In addition, althoughAs this power shift occurs, a volatile global this cannot be predicted in great detail, theeconomy will remain the norm for the com- occurrence of disruptions such as naturaling decade. trade areas will evolve and a new disasters, military conflicts and terrorismgeneration of globally competitive companies will have a great impact on the economy.china will overtake the u.s. to become the world’s largest economy asearly as 2017. And by 2012, india will have overtaken japan to becomethe world’s third largest economy.13 ibid14 “Driving sustainable consumption: value chain Waste,” World Economic Forum, October 200915 Euromonitor international from imF, international Financial statistics and World Economic Outlook/un/national statistics16 ibid
20 2020 Future Value Chain Building strategies for the new Decade9. Scarcity of Natural Resources with wind and solar becoming viable sources DEMANDBy 2030, the world’s population will reach of energy in some parts of the world. OUTSTRIPS8.3 billion, with the demand for food and SUPPLIESenergy increasing by 50% and for fresh water Water: Water-related disruptions in theby 30%.17 this growth will continue to put agricultural supply chain will have apressure on natural resources like energy, water dramatic impact on the industry’s economicand food, with demand projected to outstrip performance. Additional challenges may comeeasily available supplies over the next decade, in the form of plant siting obstacles in water-resulting in increasing production costs. the stressed countries and stricter water policies.UsDA, for example, expects unit costs of cerealproduction to rise by up to 15% by 2016-17.18 Food: Global economic growth and climate-the industry will need to collaborate to address change impact on the availability of foodsustainability in business practices going ingredients will lead to volatile food pricesforward, particularly as consumers consider over the next decade. Food prices will alsosustainability aspects in their buying decisions. be impacted by the use of raw material for generating alternative energy like biofuels.Energy: As the cost of fossil fuel remains As food demand increases, pressures onvolatile and supplies finite, an energy quality and safety will also mount.revolution could occur in the coming decade10. Increase in Regulatory Pressure Food safety will also be a key BIG BROTHER WILLover the next decade regulatory pressure focus for regulatory action. CONTROL IF WEis expected to increase, particularly for For example, China, Japan DONT CHANGEhot-button areas like the environment and and Korea have signed a foodsustainability. the recent global economic safety pact that enables the threemeltdown serves as a timely reminder of nations to notify each other im-the inter-connected nature of global trade mediately if a food safety problemtoday, and how without proper regulatory surfaces and to clarify the pro-frameworks in place, companies could cess of investigation.19 Activitiesface significantly worse scenarios. to improve the effectiveness of food safety recalls will need to be addressed.the industry will need to collaborate to address sustainability in businesspractices going forward, particularly as consumers consider sustainabilityaspects in their buying decisions.17 “Rising food prices: A global crisis,” Overseas Development institute, 200818 ibid19 “china, japan, south Korea sign food safety pact,” www.ap-foodtechnology.com, november 2009
tREnDs: WhAt is DRiving OuR OBjEctivEs 2111. Rapid Adoption of Supply Chain We will see an increasing ability to constantly FINALLY, REAL-TIME Technology Capabilities read, analyze, exchange and react to informa- VISIBILITYIn the coming decade, improved collaboration tion inside and outside the company boundar-together with new supply chain/logistics ies. Visibility will be enhanced by supplierstechnologies and information transparency will that have access to better demand signals,enable a more synchronized value chain with enabling them to efficiently use their capac-greater visibility and traceability. Already 73% ity and other resources. Communication andof fast-moving consumer goods companies say high-quality data sharing will be the mostthey have implemented or improved logistics- critical factor in successful collaboration. eDI,related technology tools or enablers.20 GDs and RFID will be key enablers for this supply chain transparency in the future.12. Impact of Next-Generation new waves of business technology Information Technologies solutions will enable manufactur- FREEING UP FROMInformation technology will no longer be just ers and retailers to quickly and CONSTRAINTS, EMPOWERING NEW OPPORTUNITIESan indispensable support function, but an dynamically simulate, describe,expansion of the organization’s intelligence, model, execute and manage businessa universal connector, the way to become processes – for example, to collaborativelyadaptive. With executives, employees, partners, manage promotions, categories, inventories orshoppers and consumers experiencing joint value chain performance. this opens upinformation technology in a new way, with vast opportunities for new value and innovation.business making technology its own, there will In addition, new technology solutions (readilybe a new way to deal, jointly, with business and deployable on-demand via the Internet, thetechnology in the consumer goods industry. so-called “cloud”) will help companies to free themselves from current constraints provided by often inflexible and costly It landscapes.Establishing a clear understanding of these trends and the potentialimpact to our industry led to the identification of the strategic objectivesthat will help the industry – and companies – to set the agendas for 2020.20 2010 third-Party logistics study, capgemini, september 2010
22 2020 Future Value Chain Building strategies for the new Decade OBjEctivEs: WhAt WE WAnt tO AchiEvE the overall impact of all these root trends is significant, and will require a fundamental change in the way consumer products companies and retailers run their businesses and serve consumers and shoppers. things not only need to be done differently, they also need to be done collaboratively. By working together – not only as an industry but also with governments, ngOs and consumers – we can achieve collectively what none of us can achieve alone.
24 2020 Future Value Chain Building strategies for the new Decade the analysis of the trends was the starting point the trends link to these objectives. For example, to help the industry determine what our stra- trends such as scarcity of natural resources and tegic objectives – defined as “what we want to increased regulatory pressure will be direct achieve” – should be for the next 10 years. the change drivers for the industry’s supply chain in 2020 Future Value Chain project went through the coming decade. And the rapid adoption of a thorough process to identify the global strate- consumer technology and the increase in gic objectives on which the industry should fo- consumer service demands will require industry cus its energies. the objectives identified were: and companies to rethink the way they engage with technology-enabled consumers. 1. Make Our Business More Sustainable these four industry objectives are not only 2. Optimize a Shared Supply Chain relevant at the global level; they also apply at the regional and country levels. We live in a 3. Engage with Technology-Enabled Consumers global world and in local societies at the same time. In each of the country workshops these 4. Serve the Health and Wellbeing of Consumers four objectives were identified as important, although there are different “accents” in the true power of these objectives is based on the different countries or regions. For example, fact that they result from a synthesis of extensive in Mexico the focus of “serve the health research on the identified trends blended with the and wellbeing of consumers” relates largely outcomes of the country and global workshops. to security, as people feel insecure due to the increasing crime rates. And in Australia, because of its particular geographical situation, “optimize a shared supply chain” requires a strong focus on import/export and on urban vs. rural distribution collaboration. these industry objectives require a new and different type of collaboration within the industry. let’s see what industry success looks like for each of these objectives.
OBjEctivEs: WhAt WE WAnt tO AchiEvE 25 make Our Business more sustainable Optimize a shared supply chain Engage with technology-Enabled consumers1 serve the health and Wellbeing of consumersMake our Business More sustainable:From niche to normthe urgency to achieve a more sustainable In this environment, companies need to takebusiness is driven by a number of trends. the responsibility – in fact, if they don’t consumerscontinued growth of economies like China, will force them to do so. the regulatoryIndia and Brazil will put a further strain on environment as it relates to environmentalthe world’s natural resources, whether food, issues may significantly change, but theenergy or water. the predicted scarcity of some industry has the opportunity to get ahead ofof these critical resources will increasingly be it by taking responsibility and acting now.top-of-mind topics for media attention andsocietal discussions. People will be more and sustainability must be viewed holistically,more aware of the impact of their behavior and with a lifecycle approach that includesbe more cautious about the choices they make, consumer use. this means that influencingas sustainability grows from niche to norm. consumer behavior will likely be the biggest challenge for the industry and the biggest opportunity to make a difference.
26 2020 Future Value Chain Building strategies for the new Decade 2020 The View from 2020 – What Success looks like: Consumers Trust Our Industry collectively took since 2010, and led by the Consumer Goods Forum, that addressed Future success on this objective is measured hotspots on carbon emissions such as simply by the trust consumers put in our deforestation and refrigeration, demonstrated industry to be doing the right thing. trust in to consumers that retailers and manufacturers the stores in which they do their daily and can trust each other. trust within our industry weekly shopping, and trust in the brands has helped consumers trust in our industry. with which they interact on a daily basis. With a collective voice – using common Back in 2010, consumers were skeptical measures, a common language and consistent about “big business,” they were wary of messaging also developed by the Consumer “green-washing” and confused about what Goods Forum – the industry has helped needed to be done and who needed to do it. consumers understand the role they play and helped them make the right decisions. this In 2020 consumers see retailers and brand has enabled a significant change in consumer manufacturers working together, collectively, behavior. this was really necessary, since for to tackle the big challenges and to help many of our industry’s categories, the consumer consumers understand the role they play in use produces the largest climate impact. living an environmentally friendly lifestyle. the important word here, for consumers, is this did not negate the opportunity for “collectively.” the actions that our industry competitiveness. But competitiveness is delivered by the performance of the brands and stores and by breakthrough innovations that really improve sustainability. Consumers also benefit in 2020 from greater transparency in our industry. Retailers and manufacturers are open and honest about the impact of their operations and their brands. they openly share their policies and their initiatives and are willing to admit where they have not made the progress they had hoped for and where the hotspots are that they need to focus on. Consumers in 2020 see that our industry has stepped up to the plate and provided leadership for business in general. By working with our upstream suppliers and encouraging them to join us in our programs – in fact, by making it a condition of doing business with us that they match our industry agreed standards and policies – we have extended our influence over many other contiguous industries. to summarize, success came when consumers began to trust our industry.
OBjEctivEs: WhAt WE WAnt tO AchiEvE 27 make Our Business more sustainable Optimize a shared supply chain Engage with technology-Enabled consumers serve the health and Wellbeing of consumers2 optimize a shared supply Chain: Collaborate Differently, Compete Differently there are clear trends that drive the need to optimize and share our supply chains. Increasing urbanization – which leads to strict regulations by city governments – requires new collaborative formats for city distribution. Consumer awareness about sustainability demands a more Co2 -friendly provides further transparency and visibility. new information technologies will enable new ways of collaboration and information sharing among all partners in the value chain. new business models will focus on “collaborating to compete,” as brand- supply of products and services. Increased independent and “smart” supply chains emerge adoption of consumer technologies, the aging where information (including Pos, forecast and population and growing urbanization will inventory data) as well as assets (technologies, significantly change shopping behavior and will facilities and fleets) are shared across the value lead, for example, to strong growth in home chain. Distribution logistics will no longer be a shopping. this will trigger new mechanisms competitive playing field – but a collaborative for home delivery and neighborhood pick-up. foundation that allows for competitive the adoption of supply chain technologies differentiation on other areas on top of that.
28 2020 Future Value Chain Building strategies for the new Decade 2020 The View from 2020 – What Success looks like: Supply Chains Are Optimized and Shared � Production is synchronized with the predictive and actual demand the successful supply chain of 2020 originated signals from consumers. from a significant reconsideration of the supply chain model assumptions that existed well � After production the products are shipped to before 2010. In addition to key performance collaborative warehouses in which multiple indicators (KPIs) focused on cost efficiency and manufacturers store their products. availability, the new model also incorporates parameters such as Co2 emissions reduction, � Collaborative transport from the collaborative reduced energy consumption, enhanced warehouse delivers to city hubs and traceability and reduced traffic congestion. to regional consolidation centers. this next level of supply chain optimization is based on transparency and collaboration. � non-urban areas have regional consolidation centers in which products the 2020 supply chain model is driven by are cross-docked for final distribution. consumers. they are the originators of the demand signal – from home, any mobile � Final distribution to stores, pick-up location or a store. they are the trigger for an points and homes in urban and non- optimized collaborative supply chain flow:21 urban areas takes place via consolidated deliveries using energy-efficient assets. this model has delivered tangible results on two types of success metrics: � Effectiveness measures such as increased in-stock availability, Co2 emissions reduction, improved order fill rates, better customer service and reduced lead times. � Efficiency measures like cost reduction, fewer nodes and less handling. to summarize, success came when supply chain optimiza- tion was treated from a total value chain perspective rather than from individual company perspectives. 21 this future model is described extensively in the Future supply chain vision (as presented in “Future supply chain 2016: serving consumers in a sustainable Way,” published by the global commerce initiative and capgemini; see also www.futuresupplychain.com).