1.

Introduction

Companies in the fast-moving consumer products (FMCG) sector have been at the cutting edge
of creativity in commercial fields such as marketing and distribution but lack emphasis on the
supply chain and processes. Since the last five years, FMCG companies have begun to explore
the use of more advanced solutions in manufacturing processes. This pursuit of creative digital
technologies in the supply chain of manufacturing may be seen as a natural evolution of
manufacturing processes: The Fourth Industrial Revolution or Industry 4.0. (McKinsey &
Company, 2016a).

As a result, leading manufacturing firms are beginning to introduce digital initiatives at their
plants to build new ways to transform, distinguish and compete. Via these programs,
manufacturers will link individuals, equipment, and processes, make relevant information
accessible in real time to encourage agile decision-making and improve the role of
manufacturing.

Owing to the existence of the FMCG sector-characterized by low profits and large sales
volumes-the sector is most likely to benefit from a rise in its consumer base, which would lead to
higher revenues. Bangladesh is a gold mine in this respect. Consumption spending amounted to
97% of national income as of 2015 and, with annual domestic consumption at more than 130
billion dollars, the expansion of the internal economy has increased. As the number of people in
the Middle and Affluent Classes (MAC) is expected to rise from 12 million – or 7% of the total
population – to 34 million by 2025, the high growth of the FMCG sector will continue in the
future (Lightcastle Analytics, 2019).

Since the inception of the first industrial revolution at the end of the 18th century, to describe all
economic activities associated with the processing of raw materials and the manufacturing of
goods in factories the term industry has been used (Preuveneers & Ilie-Zudor, 2017). The
terminology "Industry 4.0" was first adopted by the German government in 2013, after the
second and third industrial revolutions (Davies & Sendler, 2018a). Industry 4.0 comprehends the
development and convergence of information and communication technologies into business
processes (Dalenogare et al., 2018; Wagire et al., 2019). The Fourth Industrial Revolution is
predominantly associated with factories and is a much wider notion, referring also to other areas
of organizational activities, such as supply chain management. This concept goes beyond a
single company and is moved to a network of links between organizations where data is put into
a cloud and processes are structured in virtue along a supply chain (Szozda,2017) Fast Moving
Consumer Goods ( FMCG) are commonly referred to as Packaged Consumer Goods. Items in
this group include all consumables (other than groceries/ pulses) people purchase at regular
intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving
products, packaged food and household products etc. The FMCG Industry is on a high growth
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curve in Bangladesh with total demand expected to increase over the next decade. Proper supply
chain management practice is critical for our country's FMCG industries, because consumers will
choose the company that meets their needs as quickly as possible. The research aims to analyze
the Transformative responsiveness of supply chain in the FMCG industry of Bangladesh due to
the arrival and implementation of Industry 4.0 technologies. The research will also analyze the
future of industry 4.0 in the FMCG supply chain in the perspective of Bangladesh.

1.1 Background

1.1.1 Overview of FMCG Industry in Bangladesh

Consumer goods refer to the final goods and services that are consumed by the households and
not used in the production process of other goods & services. Consumption of these goods and
services is defined as the Private Consumption or Household Consumption. On the other hand,
Fast Moving Consumer Goods (FMCG) are products that are sold rapidly and at comparatively
lower cost. Examples of such FMCGs are packaged foods, beverages, toiletries, over the counter
drugs and similar consumables. Usually, FMCGs have a short shelf life. Some FMCGs are
highly perishable such as meat, fruits, vegetables, dairy products and baked goods. Others
products like toiletries, packaged foods, soft drinks, housework products have high turnover
rates. Revenue margin from the FMCGs is comparatively small, these products are generally
sold in bulk quantities to make considerable aggregate earnings. The business of FMCGs is
considered as the most definitive instance of low margin and high volume business. Based on
how fast products are sold to the customers, consumer goods are also classified as Slow Moving
Consumer Goods (SMCG). SMCGs are those which have a useful life longer than a year
including stuffs such as domestic appliances, furniture and home upgrading products. These
products have a sluggish sales regularity and are not circling as quickly as FMCGs. FMCGs
industry is one of the fastest growing segments of the market. The population of Bangladesh was
164.67 million in the end of 20171 . This large number of population of the country makes the
FMCGs industry very prospective. With the considerable growth of GDP, the private
consumption growth has also increased over the years. In FY 2016-17, GDP Growth rate was

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7.28% compared to 7.11% in FY 2015-16 whereas Private consumption growth in FY 2016-17
was 10.3% compared to 9.1% in FY 2015-16

1.1.2 Industry 4.0

The Industry 4.0 digital revolution is mobilizing a new form of customer who wants a smooth,
quick, efficient shopping experience and who is searching for goods that are more tailored than
ever before. For retailers, these desires can be answered by multi-channel services, a mix of
online and traditional outlet shopping experience with outlets that customers can conveniently
turn between based on their schedule or desires for any particular day. In a multi-channel
framework, increased product monitoring and accountability contribute to better customer
services. If the costs of implementing technologies continue to decline, foreign labor cost
differentials will no longer be a deciding factor in selecting the place of output. Solutions
announced by Industrial Revolution 4.0, such as automated robots, autonomous systems and
additive manufacturing, will revolutionize conventional ways of producing demand. The
resulting improved geographical and temporal versatility brought on by technology would bring
manufacturing and sales locations closer together and force significant shifts in the architecture
of future value and supply chains. These developments would shift the shape and type of
globalization and thus have an effect on the trajectory of goods.

Apparently, the biggest obstacles in executing the smart factory/ Industry 4.0 plan, moving on
from the program, are the lack of a blueprint, the obstacles in identifying and prioritizing
prospects and lack of investment (Capgemini, 2017). In conclusion, the transition of the FMCG
industry into smart factories or Industry 4.0 is only at the beginning and the awareness of its
value for action is present, but most FMCG businesses have no idea where to begin. Such a start
to innovation may be a helpful method for identifying or measuring the present and goal state of
the company's manufacturing plant at Industry 4.0. According to the industrial and consultancy
business, Smart Factories or Industry 4.0 has an exciting future for FMCG businesses. However,
most organizations do not have a clear strategy, lack development plans, or a path to begin with
as discussed above. Companies need to know what their “as-it-is” status is regarding Industry

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4.0 maturity. Otherwise, they would not be able to describe a solid road map or a vision for their
smart factory to be.
1.2 Problem Statement

Most of the studies conducted on the transformative responsiveness of the supply chain to
industry 4.0 in the FMCG industry are performed in industrially developed countries and still the
FMCG industry in Bangladesh is not receiving substantial attention in South Asia, including
Bangladesh. Supply chain management in these Bangladeshi industries should be addressed
more systematically on the basis of organized and obtained processes (Sobuj et al., 2017). As a
result, relatively few studies have been performed on the disruptive responsiveness of the supply
chain to industry 4.0. In the FMCG market. Where much of the analysis is focused solely on the
conventional supply chain and future of the FMCG industry (Sobuj et a). (Monjurul &
Ramanathan, 2019) including Supply chain operations in Bangladesh.

The FMCG industry is not unaware of technological challenges and ongoing transformation
processes, and many leading manufacturing firms are also developing Smart Manufacturing or
Industry 4.0 initiatives. However, the findings of previous studies neglect the ongoing transition
due to the effects of Industry 4.0. The present study therefore seeks to investigate the gap and
examine the effect of Industry 4.0 on the supply chain of the FMCG industry in Bangladesh and
how these industries are reacting to continuous transformation.

1.3 Objectives:
 Our project aims to close the gap between the technological components of industry 4.0
and transformative sensitiveness of FMCG Industry.
 To discover digital maturity of our FMCG industry in the scale of Industry 4.0

2. Preliminary Literature Review

This chapter reviews the existing literature on Manufacturing Digital Transformation. This study
will introduce the terminologies that will be used throughout the project to create a common
framework and discuss the gaps identified in previous researches.

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According to Judit et al. (2018), industry 4.0 is perceived in value creating processes and has the
greatest transformative effect in the corporate area. Companies can hold back for a while on the
decision about whether to join the fourth industrial revolution. The development and application
of new, unknown technologies is risky and expensive, but significant savings and revenue
growth are achievable for early starters.

According to Manjurul and Ramanathan (2019), Proper supply chain management practices are
important for Fast Moving Consumer Goods because consumers will choose those companies
where they can meet their needs in the fastest possible ways. And by using industry 4.0 the
FMCG companies will get competitive advantages. The introduction of industry 4.0
technologies, such as virtual and augmented reality, 3D-Printing and simulation, would result in
opportunities for organizations. On the other hand, the organizations can have opportunities in
their SC for big data analytics, cloud technology, cybersecurity, IoT, robotics, drones and
nanotechnology, and business intelligence.
In spite of some challenges FMCG will get lots of benefits such as flexibility, quality standards,
efficiency and productivity. Sunil and Sachin (2018) identified and evaluated the obstacles
associated with Industry 4.0 initiatives to achieve sustainability orientation in supply chains.
Industry 4.0 based sustainability oriented concept helps industrial managers not only combine
environmental conservation and Control steps but also to incorporate protection of processes and
workers and community welfare measure in their supply chains.

According to Abhijeet et al. (2020), Holistic approaches, strategies and frameworks for
implementing Industry 4.0 in SCs are lacking. They developed a SD model to assess the impacts
of Industry 4.0’s barriers and drivers on its implementation in SCs. The findings from the SD
model and the proposed implementation framework for Industry 4.0 will provide companies with
insights into the benefits of Industry 4.0 adaptations and ways of successfully implementing
them in SCs. According to Abdul et al. (2017), researchers and practitioners are giving so much
attention to industry 4.0 and it will create so many benefits to manufacturing organizations.

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But implementation of industry 4.0 in the manufacturing industry is getting less attention which
is a big challenge so now to overcome this challenge developing technological infrastructure for
supporting the implementation of industry 4.0. And before implementing industry 4.0 in existing
supply chains employees should develop existing infrastructure and adopt the technological
changes. There is a growing use of automation, data processing and sharing, cyber-physical
networks, the Internet of Things and cloud technology in industry. Modern factories are
undergoing constant transformation, which has an effect not only on the organization of
manufacturing operations but also on the functioning of supply chains (Natalia 2017)

Methodology:

Sample population

The study will be conducted by supply chain executives. And we have chosen 12 FMCG
companies to do our survey.

Sample size
A survey will be taken from at least 20 t0 25 individuals. Eligible respondents will be service
holders. They will be adults over the age of 25. For this pandemic situation the sample size is not
that huge. This research will involve both male and female employees.

Sample technique
In quantitative research if the sample is carefully obtained then it’s possible to generalize the
results to the whole population as suggested. The research will be conducted by simple random
sampling techniques.

Sources of data

Primary data: Primary data will be obtained from the questionnaires which will be given to the
employees of the organization.

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Secondary data: secondary data will be taken from articles, internet, research papers etc

Data collection

Questionnaire

Questionnaires will be given to the executives of the supply chain department for this survey
because in this situation it’s hard to go to the organization and questionnaires are a great source.
It can reduce biases and the questionnaire will be arranged with closed ended questions.

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