Building resilience in FMCG supply chains: A strategic investment perspective

In response to the increasing black swan events, Fast-Moving Consumer Goods (FMCG) supply chains must shift from a focus on cost efficiency to integrating resilience to maintain competitiveness and sustainable growth. Despite the critical importance of resilience investments in the FMCG sector, current research provides limited models to guide investment decision-making. This paper addresses this gap by introducing a net present value (NPV)-based resilience indicator that integrates FMCG performance metrics. Deterministic and robust integer non-linear programming models are developed to estimate resilience cash flow in a two-echelon, multi-product FMCG supply chain under demand uncertainty. The models employ process flexibility as an investment strategy and apply robust optimization to manage uncertainty. Numerical experiments reveal investing in resilience strategies can yield up to a 54% increase in cash flow, with market competitiveness as the most influential factor. Additionally, an optimal uncertainty level is identified for motivating companies to invest in resilience while an extreme robust level prevents resource waste. These findings provide critical decision-making insights for FMCG supply chain managers regarding resilience investments.