The consumer packaged goods (CPG) market is expanding rapidly. It is expected to grow 3% per year between 2022 and 2028 to reach $2.4 billion by 2028. Growth is coming from in-store and online sales. As the CPG market grows, shippers are working quickly to build effective, nimble CPG logistics strategies that enable them to expand sales and increase profitability.
Effectively scaling a CPG supply chain is challenging, and shippers face significant roadblocks in expanding. For success in their CPG logistics, shippers turn to experienced third-party logistics providers (3PLs) to provide new access to new technologies, ideas, and knowledge.
As demand for CPGs increases, shippers face unique challenges in pursuing reliable CPG logistics. These challenges can include dynamic customer demand, visibility challenges, and the need for streamlining collaboration among stakeholders.
Many shippers operate on a just-in-time model where they keep low inventory levels in stock. When consumer preferences keep changing, shippers face new challenges to meet varying demand levels from their existing stocks. A peak in demand may deplete their inventory, and retailers may be left waiting for new products to be produced and shipped. Similarly, an unexpected dip in demand may leave shippers with too much inventory and cause liquidity issues. An agile supply chain strategy is essential to meeting diverse and evolving demands from consumers.
In CPG logistics, visibility in warehousing and during transportation is essential, but many shippers lack end-to-end visibility. Building end-to-end visibility in transportation and warehousing is difficult, and many solutions are expensive or time-consuming.
There is a need for real-time tracking and data integration in operations. It enables better inventory management and more seamless shipping, but it’s difficult for many companies to achieve.
Communication across companies and stakeholders in the CPG supply chain can be challenging. Suppliers, distributors, and retailers might utilize different modes — such as email, phone, and specific platforms — or may be delayed by busy schedules or time zone differences.
Not only do shippers and carriers need effective communication and collaboration, but partnering with adjacent industries or even with competitors can give them an edge.
As a company’s scale of CPG grows, these problems are only exacerbated. Smart shippers understand that the core of reliable CPG logistics comes down to reliable transportation. However, shippers are increasingly building upon this fundamental principle by leveraging innovative logistics solutions alongside transportation.
These five strategies for strong CPG logistics are built upon a solid foundation of reliable transportation, and they ensure that shippers can maximize effectiveness in their CPG logistics.
CPG supply chains are fairly complex, but these five strategies for effective CPG logistics will help shippers and their partners ensure a streamlined and efficient supply chain.
One of the main ways shippers can improve their CPG logistics is by streamlining their supply chain planning. Zengistics empowers streamlined supply chain planning for CPG companies through advanced data analytics, optimized logistics routes, and enhanced collaboration with supply chain partners.
For instance, a shipper that sells hair care products is looking to optimize their supply chain. In the past, they have operated a lean inventory and, with an increase in variation of consumer demand, they’re struggling to meet demand while maintaining inventory stock. With Zengistics, the hair care shipper can access a suite of tools to efficiently manage inventory and forecast demand in the coming months, all while enhancing overall supply chain efficiency and reducing costs.
Demand forecasting is a complex yet essential tool in shippers’ toolkits. Using industry studies, general trends, and more, Zengistics can help companies forecast demand for their CPGs. Better forecasting means a shipper will have enough inventory to meet demand while reducing overhead costs by avoiding holding too much inventory.
Data analytics give shippers actionable insights into strategic inventory management. They go hand-in-hand with demand forecasting by analyzing past inventory size compared to demand and evaluating shipping successes and struggles.
Companies that tap into Zengistic’s extensive demand forecasting and data analytics tools will be a step above the rest in ensuring optimal inventory, meeting demand, and shipping goods in a timely and cost-effective manner.
At the warehouse, Zengistics empowers CPG companies with smart warehousing solutions that enhance efficiency and reduce costs. Zengistics helps CPG companies tap into technological solutions such as RFID and automated storage systems. This helps shippers optimize warehouse layouts, streamline storage, and speed up order fulfillment.
When shippers partner with Zengistics, they can begin optimizing their warehouse layout, inventory management, and technological solutions for managing inventory, such as RFID technology for real-time tracking.
Once CPG shippers have the right amount of stock available to meet demand, they need to orchestrate moving orders from their warehouses to the consumer more quickly. Zengistics accelerates efficient order fulfillment for CPG companies by integrating technology-driven solutions.
There are several steps to efficient order fulfillment that begins with having the inventory in stock and ends when the shipment arrives at the destination. In the warehouse, Zengistics supports shippers with smart warehousing strategies that optimize inventory management and reduce handling costs. They offer technology-driven order processing that ensures orders are prepared accurately and quickly. Technology can help minimize order errors and ensure that clients receive the correct goods and are satisfied with their orders.
Once CPGs leave the warehouse, the goods are only halfway there. Suboptimal routes, lost packages, and delays can impact deliveries along the way. Zengistics helps shippers with real-time tracking and complete shipment visibility from start to finish.
Zengistics employs real-time tracking to bolster resilience in CPG supply chains. By utilizing technologies like the Internet of Things ( IoT) and barcode scanning, Zengistics provides instant visibility into inventory levels and shipment status. This proactive approach enables shippers to adapt swiftly to disruptions, ensuring resilient operations and maintaining a robust and responsive supply chain.
Everyone is happy when shippers can optimize routes to enhance efficiency and closely monitor their shipments. All these strategies ensure timely and accurate order processing and help shippers meet consumer demands with precision and efficiency.
For instance, that hair care product shipper has a shipment of artisan curly hair shampoo heading from their warehouse in New Jersey to a retailer in Ann Arbor, Michigan. If the truck driver calls about a major pile-up backing up the highway, a logistics officer at Zengistics can look at the real-time tracking and help the truck driver identify the fastest route to their destination, avoiding significant delays. The technology from Zengistics can also help the truck driver plan a route for the most efficient way to drop off several deliveries in an area.
As shippers seek more efficiencies, collaboration between shippers and other supply chain partners is vital to smooth operations. Zengistics facilitates seamless collaboration with supply chain partners for CPG companies.
Collaboration is essential to streamlining the entire CPG supply chain. By emphasizing effective communication and leveraging technology, Zengistics helps streamline the entire supply chain from production to distribution. This collaborative approach ensures efficient coordination with suppliers, distributors, and retailers and fosters a cohesive and responsive supply network.
The demand for CPGs is rising. For shippers to adequately keep up with increasing demand, they’ll need to innovate how they order, warehouse, pack, and ship their products. While challenges like dynamic customer demand, a lack of visibility, and the need for better collaboration among stakeholders, can trip some shippers up, smart companies will partner with Zengistics for seamless service and elegant technological solutions. Ready to get ahead of the curve? Contact an expert today.
Operating on the world’s first collaborative logistics platform, Zengistics is a technology company that executes freight.