A Hard Road: Why CPG Companies Need a Strategic Approach to Transportation

Consider the following scenario: your company’s new snack-food offering is a major hit.

Manufacturing is humming, inventory is robust, you’ve locked in distribution, and forecasts appear spot-on.

In every respect, this would be a supply chain success story, except for one: consumers can’t get enough of the product. Literally.

Trucks are chronically late, capacity is insufficient, and missed delivery windows are exasperating retailers.

It may be little consolation, but you would hardly be alone.

Consumer packaged goods (CPG) companies are having a progressively tougher time getting their products to customers.

Transporting goods to retailers is now the greatest worry of supply chain leaders, according to the 2015 Supply Chain Benchmarking Study conducted by BCG and the Grocery Manufacturers Association.

More than 80 percent of the leaders interviewed cited transportation as their top-of-mind concern.

Above all, success with transportation in the new environment requires that transportation be elevated to the supply chain strategic agenda.

Supply chain leaders must communicate the issues these challenges pose - and their strategic implications - to their peers so that the organization can take concerted action.

Companies can then integrate transportation into the sales and operating planning process.

With a robust toolkit of tactical levers, agile supply chains, and a comprehensive strategic approach to transportation, CPG companies have the opportunity to realize much more than cost savings.

They can transform transportation from a source of adversity into a source of competitive advantage.