Impact of Agile Supply Chain Management on Organizational Capabilities in FMCG Industry

The impact of using agile supply chain management on the organizational capabilities in
the FMCG industry
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Table of Contents
1.Introduction..........................................................................................................................................2
2.Background of the study....................................................................................................................2
3.Problem and management decision.................................................................................................3
3.1 The management problem......................................................................................................3
3.2 Research question..................................................................................................................3
3.3 Objectives...............................................................................................................................4
4.Literature review.................................................................................................................................4
4.1 Supply chain management.....................................................................................................4
4.2 The value-chain concept........................................................................................................5
4.3 The lean concept....................................................................................................................5
4.4 Key supply chain activities of the FMCG organizations.......................................................5
4.5 The agility concept in the FMCG industry............................................................................5
4.6 Measures of evaluation..........................................................................................................7
5.Research design and method.............................................................................................................8
5.1 Research design and justification...........................................................................................8
5.2 Subjects for study and selection process................................................................................8
5.3 Conceptualization and measurement.....................................................................................9
5.4 Data collection method........................................................................................................10
5.5 Data analysis........................................................................................................................10
6.Ethical consideration in social research.......................................................................................10
7.Research limitations.........................................................................................................................11
References..............................................................................................................................................12

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1. Introduction
The fast-moving consumer goods (FMCG) are also called the "consumer packaged goods". They
include groceries and other items consumers buy at regular periods; like household accessories,
shampoos, toilet soaps and certain electronic goods. These goods have a high rate of return (Ray
et al. 2016).
The supply chain landscape is not static, it continues to evolve and vary in size, configuration,
shape and management strategy. The supply chain lifecycle is similar to the product lifecycle, it
starts with the stages of emergence, growth, maturity and decline. This lifecycle is applicable in
different industries, including the FMCG industry (MacCarthy et al. 2016).
There are many sorts of risk associated with the FMCG supply chain management. The internal
and external forces affect the effectiveness of the supply chain. In order to enhance its efficiency
and effectiveness, FMCG organizations use the agile to reduce the cost of production and timely
respond to the customer needs (Agigi, Niemann & Kotzé 2016).
This research critically analyzes the importance of using the agile supply chain in the FMCG
industry, its framework and dimensions. Also, it discusses its impact on the FMCG
organizational capabilities and the best measurements that fit the agile strategy.
2. Background of the study
The supply chain strategy in each organization is derived from its unique characteristics,
customer focus, channels of distribution and investment mix. Focusing on the most strategic
priorities and capabilities and aligning them with the organizational goals is the key to create a
competitive advantage. The FMCG business strategy involves one or a mixture of four key
supply chain strategies, represented in the competitive, partnered, responsive (agile) or
sustainable strategy. The responsive or agile strategy refers to being able to adaptively and

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quickly respond to the consumers, retailers and suppliers' changing needs and requirements while
ensuring risk management through the supply chain (A.T. Kearney 2017).
A survey was conducted by A.T. Kearney in 2017 about the Australian Food and Grocery
Council (AFGC) members, revealed that the dominant strategy among them is the responsive
(agile) strategy. About 3 out of five members used this strategy in 2015 and still using it. An
increasing attention of the FMCG organization is devoted to using technology to help in
producing innovative products. Miragliotta et al. (2009), as cited in Balocco et al. (2011),
discussed the main advantages of using the radio-frequency identification (RFID) on the supply
chain performance. RFID is used to automatically identify tags of products and easily tracks
them.
3. Problem and management decision
3.1 The management problem
FMCG organizations are required to carry out effective and adequate supply chain management
to make sure that business performance always improves upon. The assessment of current
situation shall be done to find out new initiatives that may be implemented for managing supply
chains. The management needs to assess the current scenario and determines the new measures
that should be implemented to maintain supply chain agility and faster launch of the new
products (Bourlakis & Matopoulos 2010). The research problem could be stated as follows:
"Measuring the impact of using the agile supply chain management on the organizational
capabilities in the FMCG industry in Australia".
3.2 Research question
The following research questions will be answered upon the completion of the research: