The consumer goods market moves at a rapid pace, ensuring large quantities of goods are available at the touch of a button.
It relies heavily on a transport and logistics supply chain that can keep up with that demand, strategically and on-time.
There are numerous factors in a global supply chain that can cause a knock-on effect to a business, such as accommodating sales promotions or reducing logistics costs. Studies have shown that 83% of decision makers in FMCG industries have expressed that being out of stock is the number one factor in improving their ROI.
Maximise success with metrics
Disruption to a supply chain at any stage can have huge repercussions, costing businesses millions of dollars, meaning supply chain management demands a seamless relationship between supplier, manufacture and consumer. At the final stage of any supply chain is one of the most crucial factors; a satisfied customer. So, what can be done to ensure this runs as smoothly as possible? By investing in, and analysing core metrics such as measuring order measurement, fill rate, inventory turnover and on-time shipping rate, you can start to notice a series of trends, allowing you to implement changes that could improve customer satisfaction across the board.
Reducing costs
Supply chains and logistics costs often account for a large amount of the sales price for consumer goods, meaning any reduction of costs go straight to an organisation’s bottom line. There are several ways in which costs can be reduced, but it’s often not that simple, and can have a domino effect driving costs up elsewhere. An ongoing challenge for the industry is reducing costs without reducing the level of service. Food and beverage giants Starbucks faced supply chain issues in 2008, experiencing fewer than 50% of outlet deliveries arriving on time. After a rigorous strategic analysis, they reorganised their supply chain, reduced the ‘cost to serve’ and laid the groundwork for future capability in the supply chain. They made savings of over $500 million between 2009/10 alone.
Environmental factors
The environmental impacts of the supply chain industry include pollution, greenhouse gas emissions, deforestation, toxic waste – the list goes on. The Australian government released the Corporate Social Responsibility and Human Rights act in 2008, requiring organisations to set up a CSR committee and allocate 2% of net profits in the last three years towards CSR. Environmental concerns will continue to be a significant issue for supply chains going forward, as the very nature of the supply chain industry is delivering the highest standard, as fast as possible, for as little as possible – often not the most sustainable option. In several industries, including FMCG, it’s been found that only 20% of environmental impacts occur from internal operations and 80% occur indirectly in supply chains.
The Australian supply chain and logistics workforce is forecasted to grow from 145,000 people in 2016-17 to 161,000 in 2021-22, and there is a growing demand for managers to develop sophisticated skills in these areas. The online Master of Supply Chain and Logistics Management at RMIT University is designed with this in mind, ensuring logistics professionals have the skills necessary to implement strategic management and manipulate data to make informed business decisions.
