Commodity price volatility. Rapidly shifting consumer demand.
Increased cost pressure. Growing sustainability imperatives.
Business leaders across sectors are dealing with unprecedented market disruptions, with no easy answers. In this challenging environment, data and analytics are crucial to navigate supply-chain disruptions, ensure supply and price stability, and keep the profit margins.
At our Future of Data and Analytics Roundtable, executives from across sectors discussed the largest issues they are facing in this context and how they are using data and analytics to navigate them.
Addressing macroeconomic shocks and supply-chain disruptions
We are facing unprecedented macroeconomic disruptions: the COVID pandemic has created abrupt swings in consumer demand, raw material prices have hit the ceiling, and there is a limited supply of goods across industries. The Russia–Ukraine conflict, moreover, has exacerbated supply and demand tensions—such as those related to oil, gas, corn, and wheat—and helped drive inflation to a record high. As a result, retail sales have fallen recently, as consumers start to moderate demand in the face of looming recession.
This mandates the need for companies to take strategic, decisive steps to mitigate supply-chain challenges. To accomplish this, data and analytics become crucial to foresee and proactively address potential supply-chain disruptions and handle pricing instabilities.
In our latest Future of Data and Analytics Roundtable, we focused on the application of data and analytics to address challenges related to supply and price stability, adjusting execution to the pace of change, and meeting the growing sustainability imperative. The rich discussion yielded the four key takeaways below.
- Pricing challenges have created an existential crisis
- Pull-through strategy: close enough is good enough
- Adapting execution based on indicators is a challenge
- Consumers are increasingly focused on sustainability and corporate ethics
Consumers are increasingly focused on sustainability and corporate ethics
Beyond the supply-chain challenges created by geopolitical disruptions are rising consumer expectations and regulations related to sustainability. Consumers increasingly are looking for purpose-driven brands that help them meet their personal goals. A senior healthcare executive urged, “This should be top of mind for organizations and will become more pressing.”
There is an increased focus on production standards and traceability with consumers deserting long-standing/premium brands to pick brands that better represent their values. This requires organizations to pay much more attention to the raw materials used in their products and the ability to digitize product specifications, thereby demonstrating their corporate commitments to sustainability.
In addition, a focus on healthier food products and scrutiny around ESG reporting mandate the need for higher production and improved raw material traceability to ensure accurate reporting. To ensure companies meet these standards, they will need to deploy specialized machinery for processing packaging and service equipment and systems (for example, RFID labeling) to ensure traceability.
Our discussion delivered helpful insights into how to address rising consumer expectations related to ESG. These include the need to digitize more sustainability-related data, such as ingredients used in products, and deploy innovative solutions to ensure end-to-end traceability of raw material and more accurate ESG reporting.