Top Three Logistics Strategies for Efficient Consumer Goods Movement 

Arya Bharti

Top Three Logistics Strategies for Efficient Consumer Goods Movement 

Poor end-to-end visibility, seasonal demand fluctuations, need for sustainability, and omnichannel logistics – Infosys points out these as the top challenges faced by CPG (consumer packaged goods) companies. While some of these stem from the need for fast distribution and delivery needs, the core problem is the misalignment between the core operational model and the digitized management efforts. The mere layering of advanced technology solutions over a legacy operational model fails to drive cost-efficiency in the highly competitive, fast-paced, and disruption-trodden CPG supply chains. 

Hence, CPG companies need to look beyond generic digitization and opt for modern technology-powered solutions that can streamline operations, integrate with the existing technical infrastructure, and help organizations gain the visibility and scalability that is essential for maintaining higher-margin business models. They need to invest in automation that can integrate the supply chain processes for consolidated management, which, in turn, improves customer acquisition and retention, and enables faster time to market. Let’s take a quick dive into some of such supply chain management factors that can help CPG companies unlock cost-efficiency, shrink carbon footprint, improve transparency and visibility, and elevate customer experience.

Create End-to-End Transparency

As per G2, only 6% of businesses claim that they have complete visibility over their supply chains, despite the fact that the worldwide logistics automation market is the highest growth driver of the supply chain market, with a CAGR of 12.4%. The inability to have complete visibility over asset and shipment movements can not only impact the supply chain planning, but also snowball into critical inefficiencies. This can lead to unnecessary costs, delays in deliveries, and potential customer dissatisfaction.

Advanced logistics management systems offer real-time tracking, allowing companies to monitor asset and shipment movements from inbound movements, to the end customer. Such solutions also come with in-built algorithms for optimizing routes and tracking the shipment/asset movements in real-time for responding to disruptions, and providing customers with accurate tracking information, ultimately improving efficiency, reducing costs, and enhancing the customer experience.

Integrate Fragmented Supply Chain Components

Siloed supply chain components, such as warehouse management, order management, customer/vendor communication, and carrier management affect the overall efficiency of CPG companies, that have large distribution and transportation networks. Businesses often grapple with multiple operations management interfaces to utilize the managed IT services offered by multiple partners and service providers. This restricts them from comprehensive operations management, which is of paramount importance. 

Intelligent logistics management solutions seamlessly integrate with multiple logistics systems, and existing technological infrastructure, such as WMS/OMS/ERP/CRM, etc., and enable businesses to manage various aspects of logistics operations, from order management and order processing to fleet tracking and customer communication from a single interface. Recent studies also reveal that 40.02% of retailers want to improve integrated operational planning. 

Further, integrated order processing can help businesses increase their productivity by 25% and space usage by 20%. Businesses can easily integrate such advanced software solutions into the existing infrastructure and manage them via a single dashboard, without compromising overall visibility. This holistic view enhances coordination, reduces duplication of efforts, and minimizes operational costs, streamlining the entire supply chain.

Focus on Efficiency for Reducing Costs

Efficiency is a cornerstone for cost reduction in CPG supply chains and businesses that have optimized supply chains enjoy 15% lower supply chain costs, 3X faster cash-to-cash cycles, and less than 50% of inventory holdings. Optimizing operations across the supply chain minimizes wasted resources and unnecessary expenses. To achieve this, businesses must adopt advanced logistics management systems that streamline processes, integrate fragmented supply chain components, and enhance overall coordination. 

By investing in modern technology-powered solutions, companies can reduce cost bleeds across the entire supply chain, such as empty miles, idling, driver deviations, or frauds leading to lost or damaged parcels, delayed deliveries, and more. They can directly get feedback and proof of delivery from the end customer and use the same for placing validation checks across the supply chain. These solutions also offer in-built workflows and algorithms for allotting shipments to the right vehicle based on multiple custom criteria, such as physical characteristics of the consignments, vehicle make, costs, vendors, etc. 

Businesses can centralize document and finance management, and automate invoicing and driver payout processes that reduce the manual elements and help reduce costs significantly. 

In the ever-evolving world of Consumer Packaged Goods (CPG) operations, the key to success lies in addressing industry-specific challenges with innovative solutions. Challenges such as limited end-to-end visibility, seasonal demand fluctuations, sustainability requirements, and the complexities of omnichannel logistics demand forward-thinking strategies. CPG companies are poised to achieve operational excellence by embracing modern, technology-powered logistics solutions that transcend traditional approaches. 

By investing in cutting-edge automation, these companies can consolidate supply chain processes, ensuring cost-efficiency, sustainability, transparency, and, most importantly, superior customer experiences. As supply chain managers and business owners envision the transformation these advanced logistics management systems can bring – streamlined operations, holistic integration, and a competitive edge. The future of CPG operations awaits, and it’s fueled by the promise of modern logistics solutions.

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