Difficulty accessing data is the top area of pain 41% with 32% of respondents having difficulty using that data to provide a basis for action and improvement in supply chain execution. This thesis emphasizes how integrating production and logistics strategies can offer significant improvement to any firms supply chain. Simply put, a retailer can be found at the end of the supply chain, but the cpg firm is one step below the end process since they manufacture the goods. Most ceos of the top 50 cpg companies grow their careers within the same industry theyre now leading. Gillettes oral care segment dominates both the manual and power toothbrush markets. Supply chain strategy is seldom stated explicitly, making it difficult to discuss a firm. Cpg firms also sell their products, but they sell in bulks or in wholesale. The importance of supply chain management strategy pls. Consumers may demand more for health prevention and cleaning in the short term, and may reduce demand for some. Ibp, inventory optimization, supply chain network optimization, omnichannel supply chain, supply chain assessment, and integrated distribution management systems idms. A thorough assessment of the location, form, and function of distribution centers, transportation lanes, and throughput. Reinventing the cpg supply chain with zerobased budgeting 4 automation and analytics can be applied in supply chains in a variety of ways. Reengineering the supply chain for the omnichannel of.
Yet these lowcost benefits are eroding through a combination of cost. There are clear steps cpg companies must take in order to prepare, according to a new report authored by the boston consulting group bcg and commissioned by the grocery manufacturers association gma. Io can help you fine tune your next sampling strategy and hopefully attract a healthy new clip of future customers. A supply chain strategy should be selected based on the characteristics of the product and. In particular, firms with a multiechelon inventory or setup cost structure can benefit from a model that accounts for these important cost. Amsterdam, 2017 fast moving consumer goods analytics framework point of view. In their case, a breakdown in trade treaties between two countries in which the company had presence forced them to reanalyze their supply chain strategy in order to look for new locations. Fisher 3 categorized products as either functional or innovative, depending on. Article pdf 2mb over the last 30 years, supply chain has undergone a tremendous change. Cpg industry supply planning, consumer packaged goods, fmcg marketing, consumer goods industry, trade marketing, supply chain management, inventory management, logistics management, demand forecasting, strategic planning solutions are now available from quantzig.
Within the world of supply chain management scm, each industry is unique. Supply chain resources for consumer packaged goods one network for cpg and retail one networks solution for cpgretail optimizes, automates and tracks execution of the entire inbound and outbound logistics lifecycle, from order to delivery. This paper presents a method to capture and express a firm. Supply chain management once upon a time, operating a supply chain at peak efficiency was a key to success. Price points are a key weapon in this battle and, increasingly, cpg companies rely on lean logistics operations to provide a cost advantage. At national sales and marketing, we are extremely pleased to offer our customers a one stop solution. Supply chain management is the overall management of all the links incorporated in the process of the production and transportation of goods and services. Online shopping, new digital technologies, and increasing channel fragmentation are intensifying the pressures on us consumer packaged goods cpg supply chains. Cpg supply chains are adapting to disruption, new research. Companies who are members of ctls supply chain ex change. Taxation labour and material costs have been, for many multinationals, the initial driver of supply chain considerations in china. And digital demand is not just ecommerce, but also social media, subscription sales and smart appliances. Things are different now and the whole concept of demand driven urgently needs a refresh before big cpg replenishes itself into oblivion.
With incremental improvements to existing distribution processes. Consumer packaged goods cpg businesses are being rocked by changing consumer. Cpg companies have traditionally sought to reduce supply chain costs by 2% to 5% a year. Kumar worked with leading fortune 500 cpg firms and at a national retailer and apparel manufacturer. Supply chain risk management helps a renowned client in the cpg industry save millions overview of the cpg industry the global consumer packed goods cpg industry typically consists of groups including appliances, toiletries and cosmetics, and food and beverage. Responsive supply chain inputs and outputs approvals are completed, shipping. Apply to supply chain specialist, senior director, senior supply chain specialist and more. Align your supply chain with business goals by integrating sales and operations planning with corporate business planning. Incremental reductions are no longer sufficient to withstand the pressures of todays business environment. The purpose of the supply chain challenge study is to investigate cpg manufacturer strategies for coping with the supply chain demands of major retailers. The ability of blockchain to track, trace and authenticate products, record contracts, guarantee the movement of information and record transactions means it can be used across the entire value chain. Io can both advise on how to execute your next sampling program and execute it for you.
Porter 3 points out that although many companies have gained operational. Cpg and the postreplenishment supply chain challenge. According to the apics dictionary, 14th edition, the strategy of an enterprise identifies how a company will function in its environment. A kane white paper strategies to reduce logistics costs in the cpg supply chain consumer packaged goods cpg companies face a constant battle for market share and retail shelf space. Empirical case study in europe and asia according to the resourcebased view, the resources of a. Consumer packaged goods cpg companies are adapting. Key challenges and value opportunities, geps experts share three highimpact strategies for cpg companies to respond to changing market dynamics and stay competitive. Supply chain management strategy is a major player in product customization, quality control, cost reductions, and speedtomarket. The popular retailers are costco, target, walmart and amazon, to name a few, and all of them sell cpg.
Resourcebased view is a complement to the traditional emphasis of industrial eco. We enable cpg companies to reduce their total cost of ownership tco by evolving from a reactive, supplydriven setup to proactive, demanddriven operations. The report also shares specific action points for procurement teams to underpin the enterprises growth agenda. The road to 2025 6 cpg at the ipping point ow brands can in in the ew routes to arket knowing consumers and engaging oneonone with them represents power for brands and rocks the timehonored model of working through retailers as the middleman. A kane white paper strategies to reduce logistics costs in. Assessing opportunities to reduce cycle times across the supply chain. Retail consolidation, digitalization and the race to enter emerging markets add growing pressure. Implications for cpg manufacturers demand planning supply chain adjust production to consumer demand shocks and potential short term and longterm scenarios. A leading cpg company with global operations and premium, categoryleading brands. A kane research study key supply chain challenges of mid. At many companies, the commercial organization and the supply chain organization fail to collaborate on a mutually beneficial strategy. But in setting supply chain strategy, youll need to look at three layers of cost. How cpg supply chains are preparing for seismic change.
Digital supply chain iot 28 28 of cpg companies use iot. Sell reflects the extent to which companies engage consumers through digital means, sell through multiple integrated channels and serve consumers with a seamless experience postsale or subscription. Our unique suite of services allows us to offer our clients a broad range of services to maximize the efficiency and efficacy of the cpg marketing and sales process for their businesses. But in todays business climate, customer expectations have grown more complex, which is fragmenting supply chains and shortening cycle times. Strategies to reduce logistics costs in the cpg supply chain. Improvement in these metrics have a direct effect on the bottomline of the. A supply chain strategy that defines planttodistribution center assignments. Strategies for cpg companies abstract reallife proof points show that omnichannel and directtoconsumer digital strategies are. Once the supply chain council has set a strategy, the supply chain organization must be prepared to execute. Weve helped 23 of the 25 largest global consumer products companies see through the haze, increasing profits and building sustained value. The global standards management process gsmp is the global process. Excellent supply chains in the consumer packaged goods. Would you like to learn more about our consumer packaged goods practice. Price points are a key weapon in this battle and, increasingly, cpg companies rely.
The impact of implementing a supply chain strategy that leverages scientific risk management techniques for. Whether on one of our eretail partner channels, direct as a promotion on a custom url or via email or affiliate, cpg. Each of the projects is a joint effort between a sponsoring company, one or two students, and one or two faculty advisors. For cpg companies, the implications in terms of supply chain strategy reach well back into product innovation and network design, and yet many still seem to be unclear about the path forward. A truly competitive supply chain supports the business strategy by supporting the business model in a highly integrated way. Reinventing the cpg supply chain with zerobased budgeting. How are outbound cpg supply chains faring in this tumultuous.
How to integrate your production and logistics strategy. So the tight capacity has enabled us to invest in yield management tools. Global standards for supply chain management in consumer. The idea driving supply chains through the 1990s came from a shelfcentric view of demand. Moredetailed benchmarks show that supply chains can still yield significant valuebuilding on the investments so many cpg companies have already made. Although sales and operations planning processes provide coordination among sales, manufacturing, and distribution, there still are disconnects and gaps among finance, strategy, and operations in many companies. It is not an easy time to be a supply chain professional is it ever.