How to spot voids and protect ...
November 8, 2021
Crisp’s resident supply chain expert Barry Bradley shares an update on the state of the consumer goods supply chain, offering insight on how companies can stay ahead of the trends and gain a competitive advantage.
Navigating the new normal
Let’s start with some good news: conditions have significantly improved in the supply chain since the pandemic and the subsequent crises that compounded our ability to get products on shelves. As we speak, cargo vessel traffic is clearing up, shipping costs are returning to normal, and goods are more readily available in-stock.
However, this doesn’t mean we can revert to pre-pandemic operations and consider everything “back to normal.” In fact, the need for better visibility and advanced planning is more critical than ever. With timely data, companies are able to make informed decisions and react quickly to continuously changing market dynamics, ensuring they stay agile and responsive.
Shoring up expectations
With escalating tensions and roadblocks overseas, more than half of American CEOs are aiming to reshore or nearshore their manufacturing operations. Reshoring refers to bringing manufacturing operations on US shores, while nearshoring involves relocating operations to nearby countries like Mexico or Canada.
But this doesn’t mean our logistical problems are solved. As more goods are manufactured domestically, there is a greater demand for domestic transportation services. However, the transportation industry is already facing labor shortages, so this demand could result in higher costs and longer delays – particularly in the trucking sector.
Therefore, it’s crucial for CPG suppliers to anticipate and plan for these challenges to ensure a smooth flow of goods throughout the upcoming year and beyond.
This is especially important considering retailers are currently heightening their expectations for on-time-in-full (OTIF) delivery – meaning products must arrive at the right place, at the right time, and in the right quantities. During the pandemic, retailers employed some leniency but shelf space has always been valuable real estate and today, buyers need to make choices that place consistent and dependable suppliers at the forefront.
As more goods are manufactured domestically, there is a greater demand for domestic transportation services. However, the transportation industry is already facing labor shortages, so this demand could result in higher costs and longer delays – particularly in the trucking sector.
Therefore, it’s crucial for CPG suppliers to anticipate and plan for these challenges to ensure a smooth flow of goods throughout the upcoming year and beyond.
Planning with precision
An efficient supply chain starts well before products are loaded on a truck. It involves a holistic approach across the five interconnected pillars of the supply chain: planning, sourcing, making, delivering, and returning. Of the pillars, planning is the foundation that drives the entire supply chain process.
Focusing solely on making business deals that promise new products or greater order quantities without plans to address the capacity needed to fulfill those promises can lead suppliers to fall short, particularly considering the transportation bottlenecks ahead. Real time data, and the ability to remove data silos and collaborate across sales and supply chain functions are critical components to fast moving industries where trends and capacity change daily.
Crisp supports suppliers in their planning process by offering highly granular, real-time data. This data empowers brands to make daily decisions regarding sales, inventory, and supply chain management, enabling them to adapt quickly to changing market trends and achieve operational efficiencies.
Need for speed
To understand how current nearshoring trends are related to planning, consider the analogy of shopping for a luxury sports car. If you only drive within city streets, the speed provided by the sports car becomes irrelevant. Similarly, if you invest in nearshoring to increase your speed to market and to improve order fulfillment but lack timely data, you won’t achieve the desired efficiencies.
For consumer packaged goods companies, relying solely on syndicated data with lengthy lookback periods instead of real-time, store-level data can undermine the value of nearshoring investments. Companies that rely solely on syndicated data with a 30-day delay are essentially driving by looking in the rearview mirror.
The longer the delay between a customer purchasing a product and that data reaching the planning organization, the more challenging it becomes to make timely decisions regarding product demand or inventory levels. This can lead to stockouts, lost sales, and increased costs.
With technology like Crisp now in the market, real-time data is empowering organizations to make data-driven decisions promptly, resulting in a greater return on investments – especially in manufacturing.
Retailers have also become increasingly aware of the benefits of real-time data, and are adjusting their expectations accordingly. They now recognize that suppliers armed with real-time insights can deliver superior performance in terms of inventory management, order fulfillment, and meeting customer demands.
The longer the delay between a customer purchasing a product and that data reaching the planning organization, the more challenging it becomes to make timely decisions regarding product demand or inventory levels. This can lead to stockouts, lost sales, and increased costs.
Conclusion
In the ever-evolving landscape of the supply chain, CPG suppliers face both challenges and opportunities. To navigate this post-pandemic era successfully, adapting to new circumstances and seizing growth opportunities is essential. Key factors that can enable companies to stay ahead of trends and gain a competitive advantage include leveraging real-time data and implementing accurate planning strategies.
By leveraging tools such as Crisp’s real-time data, companies can optimize their supply chain, respond quickly to market demands, and foster collaboration among different teams. This seamless integration enables companies to achieve growth, profitability, and sustainable success moving forward.
About Barry
Barry Bradley is Director of Supply Partnerships at Crisp. Prior to Crisp, Barry led supply chain process development at Target, General Mills, and Chewy.com. Barry received Food Logistics’ Rockstar of the Supply Chain award in 2023 and is a Certified Supply Chain Professional (CSCP) with the Association of Supply Chain Management (ASCM).
