- DR PATRICK McCRUDDEN & NISHTHA RAJBHANDARI

Nepal’s Fast-Moving Consumer Goods (FMCG) industry is experiencing rapid growth owing to rising incomes, urbanisation and expansion of modern retail formats. However, Nepal’s mountainous geography, underdeveloped infrastructure and vulnerability to disruptions all pose significant challenges to efficient supply chain management within the industry. So, in order for growth within the sector to continue these challenges need to be evaluated.

Nepal’s FMCG firms source raw materials and ingredients through both domestic channels and imports. As such, the first obstacle is that unpredictable customs clearance processes and lack of product testing infrastructure - as well as the seasonality of local agricultural produce and over-reliance on suppliers from India and China, all lead to difficulties in procurement planning. Therefore, if Nepal were to implement strategic vendor partnerships, utilise futures contracts for commodity pricing and integrate digital platforms, the country could facilitate more effective procurement.

Nepal’s mountainous terrain and lack of extensive road and rail connectivity are further obstacles that hamper manufacturing and distribution operations for FMCG products. Natural disasters like floods and landslides frequently impact warehouses and transport routes and smaller firms struggle to achieve economies of scale in both production and logistics due to capacity limitations. However, strategies such as collaborations with third-party logistics (3PL) providers, deployment of mobile manufacturing units, optimisation of plant locations and maintenance of buffer stock inventories could all help to overcome these bottlenecks.

There is also an issue of significant uncertainty in demand forecasting for FMCG companies which is caused by the vast network of small retail stores (kirana shops), fluctuations in seasonal demand, impulse purchase behaviour and the constantly evolving consumer preferences. Therefore it is necessary to invest in retailer relationships through localised promotions. This in turn can leverage machine learning for data-driven demand sensing and build flexibility in product assortments and pricing, which can aid in managing high demand variability.

If we then compare Nepali FMCG firms to regional peers, it’s clear to see that Nepal is yet to fully harness advanced technologies like IoT, AI, and advanced analytics which can transform supply chain operations. So, investing in digitally enabled supply chains and upskilling talent to enable data-driven decisionmaking will be instrumental going forward.

Additionally, partnerships with global analytics firms, academic institutions and technology startups could help accelerate technology assimilation. These should entail emerging technologies like RFID, blockchain and advanced analytics to determine the most promising applications that align with the firm’s strategic supply chain priorities.

Investing in digitally enabled supply chains and upskilling talent to enable data-driven decision-making will be instrumental going forward.

In this way, professionals will have the expertise required to lead implementation programmes that can account for change management and risk mitigation - and a key way for this to happen is through leading postgraduate management programmes, such as the MBA and EMBA provided at The British College which can equip future professional with the critical capabilities needed for technology strategy and assimilation.

Through these programmes, students develop specialist skills in areas such as technology entrepreneurship, strategic management, innovation leadership and enterprise risk management.

Furthermore, the integrated curriculums provide them with the latest theoretical and practical knowledge on leveraging technologies for data-driven decisionmaking, business process optimisation, organisational change management and disruptive innovation. It is also essential that those entering into this field receive hands-on experience through opportunities like the consultancy projects at TBC, which give students invaluable practical experience in areas such as emerging technologies, costbenefit analysis, alignment with strategic priorities, process redesign, and risk mitigation recommendations.

This exposure to live company scenarios builds critical analytical skills whilst honing soft skills like stakeholder management, presentation and solution development - which is instrumental if we wish to develop professionals ready to lead enterprise-wide technology transformation programmes.

So, while Nepal’s FMCG industry shows great promise, effectively overcoming the complex supply chain challenges will require strategic insight, talent development and an embrace of advanced technologies. And with the right training, Nepal can have the right minds to take the thoughtful approaches required for FMCG supply chains to build resilience for future growth. If Nepal were to implement strategic vendor partnerships, utilise futures contracts for commodity pricing and integrate digital platforms, the country could facilitate more effective procurement.

Link: The British College, More than a College