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    Blog Image

    How to Improve Supply Chain Management of Consumer Goods

    • Consumer goods supply chain management is facing challenges like evolving customer demands and external disruptions.
    • Supply chain management software can help leverage technology like AI and ML to take data-driven decisions.
    • Technology can offer consumer goods businesses with agility, end-to-end visibility, and resilience.

    July 28, 2023 | Supply Chain Software

    Consumer goods supply chain management is a sophisticated network with an aim to offer high-quality and cost-efficient products to consumers and deliver profits and savings to businesses.

    Efficient supply chain management helps businesses operate smoothly and efficiently and allow them to take a customer-centric and sustainable approach to supply chain operations.

    Technology is pivotal in changing the face of supply chain management, making real-time tracking, end-to-end visibility, and fast delivery times imperative. It also helps consumer goods businesses mitigate a host of challenges.

    1. Low End-to-End Visibility

    Buyer needs are constantly evolving, and businesses find it difficult to cope. This is where real-time visibility of the supply chain helps a business in understanding the market’s pulse and tweak operations accordingly. Visibility will also help businesses improve packaging, shipping, payment, and warehouse management processes.

    2. Inefficiency in Demand Forecasting

    Forecasting customer demand is a huge challenge. Especially when done without intelligent systems in place. Demand depends on myriad factors like economic conditions, festivals and local or regional events. Efficient demand forecasting is essential for inventory planning and optimization. It helps businesses collaborate with vendors in a better way to optimize the cost and quality of the products.

    3. The Need for Sustainability

    To meet the U.N.’s net-zero emissions goal by 2050, these businesses must actively partake in waste reduction, sustainable products development, replace legacy equipment, and digitize supply chains. CPG businesses need to take a cradle-to-cradle approach and prepare for a circular economy. This will also help win customers and their trust.

    4. Supply Chain Disruption

    Another challenge for consumer goods supply chain management is supply chain disruptions. Despite strong planning and forecasting, there are internal and external events that can disrupt the supply chains. These include economic instability, weather changes, natural calamities, forecasting errors, and conflicts. This causes the bullwhip effect, where a change in demand and supply creates a larger supply chain fluctuation. External factors include labor strikes, port closures and shipping delays due to blocked sea routes.

    In this landscape, technology plays a crucial role in streamlining operations and enhancing efficiency within the consumer goods supply chain. Cutting-edge technologies have revolutionized how consumer goods are produced, distributed, and ultimately delivered to end consumers.

    Also read: Procurement in the Consumer Packaged Goods Industry: Key Challenges and Value Opportunities

    How Technology Helps with Consumer Goods Supply Chain Management

    1. AI-Driven Demand Forecasting

    Investing in advanced demand planning and forecasting technology empowers supply chain professionals to optimize inventory levels, minimize stock outs and meet customer demands. These tools leverage historical data, market trends and predictive analytics to generate accurate forecasts.

    Moreover, artificial intelligence and machine learning algorithms enable organizations to analyze large volumes of data, detect patterns and make accurate predictions.

    By considering factors like seasonality, market fluctuations, and customer behavior, demand planning technology helps organizations align their supply chain activities effectively.

    Improved demand planning leads to reduced lead times, enhanced customer satisfaction and greater overall operational efficiency.

    2. IoT-Enabled Time Tracking

    IoT supports operational efficiencies in areas like asset tracking, inventory management and forecasting, improving productivity and aiding decision-making across the supply chain. For example, companies can track products throughout the entire lifecycle with RFID and GPS sensors.

    3. Warehouse Automation

    Robotic Process Automation (RPA) has revolutionized warehouse operations. Automated systems efficiently handle high-frequency, manual tasks such as picking, packing to make human workforce available for more strategic tasks. Furthermore, it helps with inventory management while significantly reducing potential errors and time.

    4. Blockchain Technology

    Blockchain technology is becoming increasingly popular with the consumer goods supply chain. And the reason for this is its ability to offer traceability and end-to-end visibility. It creates and tracks a comprehensive record of all transactions from sourcing materials to the final sale. It ensures product authenticity and ethical sourcing. This builds consumer trust and addresses sustainability issues and product recalls, protecting both company reputation and consumer safety.

    Also read: How a Global CPG Company Saved 20% on Packaging Costs by Partnering With GEP

    Benefits of Efficient Consumer Goods Supply Chain Management

    Despite the challenges involved, effective management of the consumer goods supply chain offers benefits that have an impact on businesses and customers alike.

    Agility and Responsiveness:

    Efficient supply chain management gives agility to businesses to proactively adapt to changing market trends, evolving consumer demands and unpredictable disruptions.

    Drive Savings:

    When supply chains are optimized, businesses can save up on costs pertaining to inventory, transportation, and unnecessary operational overheads. These cost-saving measures directly contribute to increased profitability.

    Better Customer Service:

    Efficient consumer goods supply chain management leads to satisfied customers by ensuring availability of goods all the time. By maintaining inventory levels and efficient distribution channels, businesses can meet customer demands, resulting in customer retention and more sales.

    To Sum Up

    In today’s fast-paced world consumer goods supply chain is faced with a host of challenges. One of the most efficient ways to navigate these challenges and ensure profitability and customer satisfaction is to double down investment in cutting-edge supply chain technology. Supply chain management technology can help businesses gain end-to-end visibility, agility, resilience, and drive profits.

    Know how GEP can help resolve supply chain and procurement challenges in the consumer goods industry.

     

    Tags: Supply Chain Software , CPG

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