For consumer-packaged goods (CPG) brands wanting to lead their category at major retailers, it’s critical to be strategic and adaptable with a logistics strategy. While many brands try to shave pennies off transactional transportation costs, that won’t drive long-term success in retail locations. CPG brands that DO find success are proactive and utilize technology to increase order visibility and analyze performance data.
Technology Leads to Category Leadership
Shipping technology has significantly improved in recent years and is now a massive determinant of CPG brand success. When leveraged correctly, shipping technology helps CPG brands improve visibility and transparency, forecast and plan better for the future, and increase efficiencies through consolidation.
More Visibility and Transparency
Shipper intelligence technology provides CPG brands with increased, accurate visibility to track shipments and collect supply chain performance data. Real-time updates pulled from both GPS tracking and manual check-ins with carriers allow shippers to track and trace each shipment through illustrative maps. According to a recent Deloitte study, 90% of companies that use supply chain data to increase the level of transparency for their consumers experience an increase in profit.
These tools can be available as SaaS (Software as a Service) or as a plug-in to their existing FMS (freight management system), which benefits those who manage their freight.
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Track-and-trace software results in more accurate delivery estimates, making it easier for shippers to respond quickly to customer inquiries or complaints. Giving shippers the ability to know where each shipment is creates peace of mind. In addition, the software can strengthen communication, reliability and credibility with customers while improving overall relationships and chances of winning more business in the long run.
Increased Forecasting and Planning
Shipper intelligence technology allows CPG brands to measure and break down supply chain data through metrics like on-time delivery percentage, number of loads, spending, distance, etc. The technology also allows companies to create reports based on specific time periods and compare performance to historical data or predict future costs.
Analyzing this data reveals the inner workings of your supply chain and helps identify improvement areas that will maximize efficiency and cost savings. This can lead to actions as simple as asking customers for more lead time and adjusting must-arrive-by dates with retailers. Or it can lead to fundamental shifts in your logistics strategy, like consolidating shipments. Analyzing data across your entire network can even inform major executive decisions regarding expanding or relocating physical store locations, warehouses or distribution centers.
Some of the largest and most successful companies rely heavily on technology to analyze their supply chains, forecast demand and make buying decisions. For example, Walmart leverages data and analytics to analyze inventory levels, sales data and customer demand to minimize waste and make accurate inventory management decisions.
The retail leader also uses data to monitor suppliers’ delivery performance, identify potential supply chain disruptions and proactively mitigate risk. Walmart even created its own retail benchmark. on-time in-full. (OTIF) to support its data-driven supply chain strategy. OTIF has been so successful that many other large retailers adopted their own versions of OTIF in turn.
Efficiency Consolidation
Consolidating shipments with technology is one of the best ways CPG brands can reach significant cost savings. Consolidation in logistics refers to strategically analyzing historical orders to identify and capture future opportunities to combine shipments. Removing the high cost and risks of shipping less-than-truckload (LTL) into retail locations, consolidation maintains the visibility and control of truckload-level services for less-than-truckload quantities.
Consolidation also helps brands hit key retailer benchmark metrics like OTIF and must-arrive-by date (MABD), eliminating the risk of damaging retailer relationships and costly fines. Additionally, utilizing consolidation has an enormous impact on sustainability. Consolidating orders means fewer trucks on the road, reducing fuel costs and emissions.
Some other benefits of freight consolidation include pricing simplicity, faster transit times, less congestion at loading docks, fewer but stronger carrier relationships and more control of due dates and production schedules.
Technology Elevates On-Shelf Performance
Leveraging technology helps CPG brands navigate supply chain issues but also puts the organization in the best possible position to get on the shelf on-time in-full, avoid out-of-stocks and become leaders of its category. If a company’s competitor fails to fill shelf space because of supply chain issues, it must take advantage of the opportunity, as this can lead to new customers and convert brand loyalty.
CPG brands seeking a data-driven strategy for their logistics can start by contacting a third-party logistics (3PL) provider as a significant first step. 3PLs specializing in retail deliveries have the experience and knowledge to navigate retailer-specific issues, allowing companies to take their logistics strategy to new levels.
Andrew Lynch is President and Co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third-party logistics.
