InFocus: Why Supply Chain Optimization is Key to Success for FMCGs

The supply chain is a vital aspect of many businesses such as retail and FMCG, with a massive global market value of $15.85 billion. Companies need to optimize their supply chain to reduce costs and improve their bottom line. However, it’s not always clear how many businesses truly understand the benefits of supply chain optimization, such as the potential for increased revenue.

70% of companies globally recognize that building a strong supply chain is key for providing quality customer service and boosting revenue. However, there are still businesses out there that overlook supply chain’s importance when it comes to driving revenue. To throw light on the issue, Locus recently hosted a webinar featuring Ali Aarafat, Regional Director, SEA, Locus, and Wahyu K. Wicaksono, Director of Supply Chain at PT. Tirtakencana Tatawarna (Avian Brands), who shared insights on the significance of supply chain, Tirtakencana’s optimization strategy, and how Locus assisted in the process.

Key takeaways from the Avian webinar

• Supply chain challenges for FMCGs: FMCGs often encounter various obstacles in their supply chain, particularly in the final mile. This includes the arduous task of manually sorting packages by size and address, as well as inefficient routing that results in delayed deliveries. To make matters worse, the lack of adequate tracking and fleet management systems can cause dispatchers and customers to remain in the dark about the status of their orders. Overcoming these challenges requires a comprehensive approach that includes improved logistics technology, optimized routing, and enhanced visibility throughout the supply chain.

• Meeting customer expectations: In today’s fast-paced world, consumers have come to expect seamless and timely deliveries that align with their specific preferences. However, trying to meet these high expectations without the right tools and processes can be a recipe for disaster. To satisfy customer demands while maintaining operational efficiency, companies need to leverage intelligent dispatch management systems with capacity-led bookings. This approach enables seamless reverse logistics, reduces carbon emissions, and provides valuable insights into customer preferences and delivery timelines. By prioritizing technology and innovation, businesses can keep up with the evolving demands of their customers while delivering exceptional service.

             Watch our webinar to know more about what your customers expect from you

• Strategies to reduce operational costs: Last mile costs is one of the main reasons for inefficient supply chain management. However, it’s important to understand the root causes behind why operational costs shoot up:

1. Maximizing fleet volume utilization: Many businesses struggle to fully utilize the space in their trucks, resulting in wasted resources and unnecessary costs. However, by adopting an intelligent dispatch management system that takes into account vehicle size and parcel dimensions when assigning orders, companies can ensure that truck space is used to its full potential, allowing for optimal resource utilization and increased efficiency.

2. Choosing the ideal carrier: Not all delivery needs can be met by captive fleets, which is why many companies must rely on third-party carriers. However, finding the right carrier can be a daunting task that consumes valuable time and resources. Without careful consideration, choosing the wrong carrier can result in lost money, time, and customers. Luckily, an intelligent fleet management solution can simplify this process by evaluating carriers based on a variety of parameters such as SLA, cost, and track record, while also providing convenient features like carrier renewal and auditing. With this technology at their fingertips, businesses can streamline their supply chain operations and optimize their carrier selection process.

3. Reducing delivery failures: Delivery failures can arise from a variety of reasons, such as incorrect goods, damaged vehicles or products, or unclear customer addresses. Using outdated tools like Excel spreadsheets can only get companies so far in resolving these issues. In fact, according to industry data, a staggering 67.4% of supply chain managers globally still rely on Excel spreadsheets to manage their operations. To truly address delivery failures, businesses need to embrace intelligent last mile solutions equipped with advanced features like dynamic routing, geocoding, tracking, and automated package sorting. By doing so, companies can significantly reduce costs in the final mile and stay competitive in the market.

   More last mile cost saving strategies in our webinar 

Efficient supply chain operation, especially in the last mile for FMCGs play a critical role in driving revenue growth for companies. By leveraging these operations effectively businesses can drive a positive impact on the revenue of the company.

Locus’ state-of-the-art dispatch management software has helped FMCG companies like PT. Tirtakencana Tatawarna ace last-mile delivery and improve customer experience and ROI. Locus has helped reduce vehicle use by 20%, planning by 70% and freight cost by 15%.

Download the case study of how Locus optimized PT. Tirtakencana Tatawarna’s supply chain operations