Optimizing Complex Fast Moving Consumer Goods Supply Chain
The world of Fast Moving Consumer Goods (FMCG) is a complex one, riddled with regulations, compliance standards, highly specific requirements, and demanding customer service level expectations – especially for companies operating in the Healthcare sector.
When a multi-national FMCG Healthcare company approached DSV – a top global transport and logistics company – they had just opened a new warehouse in Johannesburg, South Africa, which was strategically positioned for multi-modal freight shipments and courier services. What the client needed was a concept DSV came to call freight management services, and it was the first of its kind attempted by DSV in this geography.
Taking on the Challenging World of FMCG
Freight management services for the FMCG client would encompass the end-to-end supply chain, including inbound freight management, outbound flows, domestic distribution, and storage and value-added services during storage. It would also require all three of DSV’s multi-national business units to participate. At the time, each unit had its own team operating according to its own systems and processes. However, the client made it clear they wanted a single point of contact for the entirety of these services.
Add to this the complexity involved in order planning and execution. The client had multiple products with varying order requirements; for instance, 15% of products were highly regulated pharmaceuticals, 40% of deliveries needed white glove bookings and order management, and specific products needed to be at a specific location at a very specific time. DSV needed a solution that would systematically coordinate flows across multiple modes of transport with visibility and control across all their divisions and external service providers. Ideally, the solution would retain the identity of the different business units in terms of who they are and what they do best, while still meeting the needs of the customer.
Brett Sauerman, General Manager of Freight Management Solutions for DSV South Africa, who was the General Manager of eFulfillment at the time, stated:
“It requires a very slick solution that allows people, systems, and processes to, in cohesion, meet one demand. And that one demand is the customer service level agreement. The work instructions need to be clear, everyone involved in the process must understand exactly what they need to do, and when to do it in order to meet the ‘customer promise.’ That is a big ask. Even as one business, it’s as though we each reside in our place upon a giant wheel, coordinating one push to make it turn.”
Optimizing the Supply Chain Against Service and Cost via a Global Control Tower
Because DSV was treading new waters with freight management services in the FMCG space in SA, they needed a highly flexible solution that would allow them to grow and evolve their new offering - occasionally through short notice requirements - until they solidified their offering. Since consumer-based medical and pharmacological products have specific environmental and regulatory requirements, it was also critical that DSV would be able to optimize the supply chain very quickly after implementation.
Other DSV entities had already been using the MPO Multi-Party Orchestration platform for their supply chain control tower and transportation management capabilities, and this played a large role in the selection process. “In other geographies, the technology has proven its ability to optimize the supply chain against service and cost,” says Sauerman.
The MPO platform’s ability to automate highly complex workflows and processes made it a good fit for the project.
DSV leveraged MPO’s supply chain control tower capabilities to centralize real-time information from multiple pipelines, including third parties. Breaking down silos across the supply chain, including external service providers, gave DSV complete order visibility at every transaction point and the power to quickly and effectively manage exceptions on the individual order level. This resulted in a 22% improvement in vehicle utilization on direct, retail for consumer, FTL, and LTL, as well as a 76% decrease in resolution response times for multi-supplier queries.
The supply chain control tower was also functional and not merely analytical - offering in-app options for active and timely planning, execution, control, and analytics. This included warehouse activities, such as calculating shipping capacity and how to optimize space utilization given the different pallet and product types. To keep costs low and ensure consistent and better delivery times, the control tower enabled DSV to connect to a larger carrier network and automate carrier selection and assignment based on the customer and order workflow requirements. On the execution side, intelligent order flow automation allowed DSV to improve productivity on average by 17% and power their customer’s growth.
Sauerman further stated;
“The MPO platform allows us to orchestrate across different service providers with different systems and capabilities, to fulfill certain service instructions, regardless of how complex they are - be it operationally or IT or process-wise.”
He also explains that the key objective is to ensure for their customers the best possible service at the best possible rate. “MPO is helping us do that."
Freight management services might have been uncharted territory for DSV SA when they first partnered with their FMCG client, but they were able to optimize the supply chain to quickly meet their customer’s high expectations and even support their client’s growth. Now, with strengthened expertise and confidence in its offer, DSV has its sights set on commercializing Freight Management Services and bringing similar success to other customers.
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MPO was recently recognized as a Leader in the Nucleus Research Control Tower Value Matrix. To speak with a member of our team about how the MPO supply chain control tower can help you drive similar efficiencies, cost savings, and higher service levels for your business, reach out to [email protected], [email protected], or request a demo today.
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