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Is the consumer-goods industry ready for the new world of work?

February 26, 2020

The next two decades will see a disruption of work as great - or even greater - as the industrial revolution. In that era, machines replaced more than half the workers in certain sectors over a period of about 30 years. Only this time there could be bigger consequences. According to McKinsey Global Institute, automation could replace 400 to 800 million people by 2030. The same number of jobs or even more will be created. But new skills will be needed and people will need to adapt to them.


What will happen to the jobs


In the consumer-packaged-goods (CPG) industry, these changes are already around the corner, especially thanks to digital shopping channels. Although according to Euromonitor, less than 5% of CPG purchases are made online, businesses such as Alibaba and Amazon are growing by 27% per year, compared to only 1.4% for traditional channels. 


The intensity of disruption will not be the same in all industries. Not surprisingly, the sector most affected is the one that relies on manual labor. For example, warehouse operators have a high potential for automation. The need for physical use will decline as machines become more advanced. On the other hand, technical qualities will be on the rise and consequently will become more important. More and more jobs required social, emotional, logical reasoning and creative qualities.


The jobs in the CPG industry will be affected in three major ways. 


Certain jobs will decline: As mentioned before, the automation will reduce the need for physical and manual skills. CPG companies won’t need as many office-support workers, warehouse stockers and forklift operators as they did. 


New jobs will be created: The creation of new jobs will be greater than the jobs lost due to automation. The growth in demand for goods will cause more jobs to emerge, especially in emerging economies. Global consumption could grow by $15 trillion between 2020 and 2030. And jobs that already exist will be shifted to higher-skilled jobs, including sales representatives, managers, engineers. And 8 to 9 percent of the demand for new jobs will be occupations that have never existed. 


Most jobs will change: Now with partial automation, complementing human work. At least 40% of the jobs will require more time managing and troubleshooting automated systems. 


Impact across the value chain


Here is how it is likely to affect each sector of the companies.


Marketing: Although creativity and intuition will continue to play a key role when it comes to campaigning and venerating products. Data and advanced analysis is expected to make many decisions.  Decisions such as which client to reach, pricing, and promotions will be decided in analytics.


Sales: Sellers will continue to be in great demand, but their role will change. They will now need to be more literate and possess more analytical skills. Many routine processes will be automated; it is very possible that machine learning will create sales plans. 


Supply chain: Everything will change, from operations, production, warehouse management, and logistics. The traditional staff will be replaced by technicians trained in engineering and data scientists. Supply-chain planners, for example, will need to be able to work with complex data and find advanced algorithms to identify and exploit patterns.


Finance, legal and other back-office operations: Studies conclude that 40% of finance activities are fully automatable, and another 17% partially. Finance departments of CPG companies have started to use robotic process automation, a software that performs redundant tasks efficiently and correctly. The requirements for finance people will now be to know about these machines and how to perform activities with them.


Prepare for change


Changes in the workplace will require CPG companies to reassess their strategies and recalibrate their workforce needs. In order to succeed in the future, they need to start today. Adapting to automation can be both beneficial and challenging for CPG companies. There will be many repercussions on your operations, your structure and your workforce. You need to start competing with automation now, before it is too late. 


 Patrick Guggenberger, Jessica Moulton, Patrick Simon, and Alexander Thiel (2020, January). Is the consumer-goods industry ready for the new world of work? Retrieved February, 2020, from https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/is-the-consumer-goods-industry-ready-for-the-new-world-of-work



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