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

The skills that made consumer goods companies successful in the past will no longer work for the future and they need to learn new skills to prepare for the future.

The next decade is likely to bring about the biggest disruption to work and employment since the industrial revolution. new jobs would be created but they will require skills that will be in short supply.

For the CPG industry, the skill crunch is driven partly by the shift towards digital channels. Online channels are growing at an astonishing 25% plus whereas the traditional mass channels are plodding along with a growth rate of 1-2 %. Most of the growth is in the hands of the digital startups and CPG companies have to revamp their processes to catch up. 

What will happen to jobs:

While all industries would be affected by automation and new technologies, industries that rely on manual labour will be affected the most. In CPG certain new skills would be required. Warehousing is one area where a lot of automation is replacing manual labour. Also as online channels become more popular skills like digital expertise including data analytics will become important. more jobs would require social and emotional skills as well as logical reasoning and creativity.

The jobs in the CPG industry will be affected by one of these ways.

• Certain jobs will decline: Automation and AI will significantly reduce physical and manual jobs. They will need less office support workers, warehouse helpers, forklift operators. There will also be a change in the collection, processing, visualisation of data.
• New jobs will be created: Rising demand for goods could sour job creation especially in emerging economies. This would be mainly in high-skill jobs like sales reps, managers, executives, engineers. many of the jobs would require skills in areas of data analytics, software development, AI, robot design and maintenance etc.,
• Most jobs would change: Partial automation with machines complementing labour would become common. Jobs with repetitive work will evolve so that workers will spend more time managing and troubleshooting automates systems.

Impact across the value chain

Impacts on various other functions

• Marketing: Data and advanced analytics would become more important in deciding the marketing campaigns, product mix, retailer inventory management etc., Already companies which have implemented these systems have seen improved margins on an average by 2%.
• Sales: They will be in high demand but they need to be data literate and possess analytical skills. many routine processes will be automated. Many processes like sales deployment plans, supplier negotiation terms, sales dashboards for setting priorities would be generated by the computer systems 
• R&D: Innovation and product development will be data-driven. Repetitive activities like documenting protocols & process will be automated. Ai & 3D printing will become common. hence there will be a need for people with high cognitive skills. 
• Supply chain: The entire process from manufacture to warehouse to the customer will be increasingly automated thereby reducing manual labour. people with analytical capabilities will be in mire demand, to exploit demand and supply patterns. 
• Procurement: Computer-driven procurement algorithms would be able to access real-time data and dynamically match demand with supply. Professionals need to become adept at using advanced procurement solutions.
• Finance, Admin and rest: Half the finance functions are routine and can be automated easily. So also back office, HR and other departments where a major part of the activities can be automated. 

Preparing for change.

These trends would force CPG companies to reevaluate their recruitment strategies and also their training needs. To win the future, they must act on three fronts.

• Hire and retain lighthouse talent: The top executives need to get fully updated on new technologies and their potential to advance the future of the work agenda. hiring external leadership can help. HR departments should nontraditional strategies to attract top digital talent. Recruiting is only one part of the required HR effort. it is equally important to retain hired talent. Companies should involve them in making strategic decisions, give a clear opportunity for career progression and provide benefits that are competitive with industry peers.
• Redefine job roles and requirements: As automation takes hold, companies will need to redefine their roles and responsibilities. the qualifications and skills required should evolve accordingly. The ability to master emerging technology quickly will be more important. Technological aptitude will become important across all levels of the organisation. Top management must have at least an understanding of their functionality and potential.
• Reskill employees: COmpanies cannot rely on new hires to fill skill gaps. Through reskilling, helping employees deepen their knowledge, skills and develop new ones, companies can preserve their workforces. It should help employees acquire these skills by creating in-house programs or partnering with third-party training providers. 

Adoption of automation and AI can both be a boon and challenge to companies. It is imperative that companies plan for big changes immediately. Otherwise, they will be left behind in this new world of work.

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

Mckinsey Jan 2020