Moving Fast-Moving Consumer Goods Even Faster
Are your Fast-Moving Consumer Goods moving fast enough?
FMCG companies operate in a dynamic and competitive market where success is measured in consistently meeting customer demand swiftly and efficiently.
If your company is lagging, outsourcing delivery activity to a third-party logistics (3PL) provider is a proven way to speed up FMCG logistics and boost customer satisfaction.
Such enterprises offer comprehensive logistics and supply chain solutions, such as transportation, warehousing, inventory management, and last-mile delivery.
The Winners and the Laggards
Pressing home the point, a survey by the Boston Consulting Group of 825 retail, ecommerce, and FMCG executives spanning 11 international markets found companies that thrived in 2023 adopted the following winning tactics:
- They invested significantly in digital economies.
- They exercised heavy employment of third-party ecommerce platforms.
The ‘laggards’, as the survey report calls them–companies reporting negative or flat growth–were found to be ignoring these two important business strategies.
What 3PLs Bring to the FMCG Supply Chain Party
You would be wrong to think that the only reason to employ a 3PL provider is to speed up your last-mile delivery processes. Partnering with a logistics specialist also brings many other benefits.
Let’s examine them briefly.
1. Supply Chain Agility and Scalability
Unlike many FMCG businesses, 3PL providers possess the infrastructure, technology, and expertise to swiftly adapt to demand fluctuations and scale operations accordingly.
Their advanced inventory management systems help companies track and manage their inventory, reducing the risk of stockouts or overstocking.
Faced with uncertainties such as seasonal spikes or unforeseen surges, 3PLs adeptly manage variations, ensuring timely deliveries without compromising quality.
2. Increased Efficiency
By entrusting delivery operations to 3PL providers, companies can redirect their focus from managing the intricacies of last-mile logistics to tackling FMCG core competencies.
Many companies suffer losses due to warehouse inefficiencies and poor load planning. Long loading times often incur demurrage charges while poorly loaded trucks and containers could see you paying to transport air.
Leaving these logistical tasks in the hands of the experts can reduce operating costs substantially and support overall logistics optimization.
With this strategic shift of resources, you can concentrate on product innovation, marketing strategies, and enhancing product quality.
3. Cost Savings
Competing in the FMCG market, where margins are low, requires fast and efficient delivery of orders. Unless you are prepared to invest in an in-house fleet of vehicles and employ teams of delivery agents, your business can’t hope to keep up with the ever-growing demand.
An efficient 3PL service would already have these assets in place. Furthermore, a 3PL company can leverage its scale and cut your costs by planning optimized routes and offering consolidated shipments.
It can also provide cost-effective solutions for storage, inventory management, handling, and distribution–in other words, overall supply chain cost reduction.
4. Enhanced Customer Experience
Getting orders to customers when they expect them has always been the key to fostering customer satisfaction and loyalty. Partnering with a reliable 3PL provider ensures consistent and punctual deliveries and can help you achieve this goal.
Most 3PLs offer real-time tracking and proactive communication to bolster the last-mile delivery experience.
They also handle returns, which as FMCG companies know all too well, is one of the biggest bugbears linked to consumer retail. Because of the nature of many FCMG products, speed is critical when transporting returns to the warehouse, or to stores for repacking onto shelves.
5. Technology Integration
Leading 3PL providers such as Shipa Delivery have invested in pioneering technology for supply chain management and logistics, which can be leveraged by FMCG companies.
The integration of advanced tracking systems, route optimization software, and data analytics tools offered by 3PLs empower FMCG firms with valuable insights and wide-ranging data,
allowing them to streamline operations and forecast demand.
6. Geographic Reach and Flexibility
Expanding into new markets or reaching remote areas can be challenging for FMCG companies.
Collaborating with 3PL partners grants access to their extensive geographic reach and expertise in navigating diverse and cross-border markets. That also facilitates FMCG market expansion strategies and ensures product availability in previously untapped regions.
7. Risk Mitigation
Outsourcing deliveries to 3PL companies mitigates the risks associated with transportation, warehousing, and inventory management because logistics providers assume responsibility for these business functions. They also employ logistics risk management protocols and devise contingency plans, safeguarding FMCG companies from potential disruptions.
Consider the Statistics
Still not convinced? Consider this: The Global FMCG market in 2021 was valued at $1,059 billion (USD). It is expected to rise at a CAGR of 4.86 percent and reach $1,549 billion by 2030.
At the same time, the global 3PL market in the FMCG sector is expected to grow at a CAGR of 5.5 percent between 2022 and 2030.
Look at that figure: 5.5 percent. That’s a higher growth rate than the 4.86 percent forecast for the FMCG market itself—meaning that in the coming years, the 3PL market in the FMCG sector is predicted to expand exponentially. In other words, more and more FMCG companies will partner with 3PL providers.
The reason, as we have outlined above, is that 3PLs typically provide warehousing,
transportation, inventory management, order fulfillment, and other services that increase efficiency, cut costs, and improve customer satisfaction.
Can you really afford not to follow the trend?
Have a Chat with our Team
Why not contact us to discuss what we can offer your business to help it unlock new potentials,
fortify its market positions, and stay ahead of the increasingly competitive FMCG curve? You have nothing to lose and, potentially, a whole lot to gain.