Solving the Problem of Profitable CPG Distribution

Every supply chain is complex, with tough decisions that need to be made at every stage. Making the right choices is critical to ensuring high levels of service, along with strong sales and margins. Driven by volatile shopper demand, price competition, the power dynamics of the retail channel and, in many cases, product perishability, the consumer packaged goods (CPG) supply chain is especially complex.

Products must be sourced in the right quantities from the right distribution center. The right carrier and logistics scheme must be defined for each order. Complex fulfillment and delivery constraints must be considered — including truckload capacities, special picking or packing needs, handling requirements and labor availability. Customers may have different fulfillment needs. For example, Tier 2 retailers’ orders may need to be single-sourced, as they a expect single delivery to a centralized warehouse. But large, bulk orders for Tier 1 retailers may need to be split into multiple single truckload orders and delivered to individual stores.

Getting these decisions right is absolutely critical to operating profitably in today’s environment of razor thin margins. The winners will be those companies that can apply intelligent, dynamic sourcing logic that balances profitability with customer service, helping to avoid late-delivery penalties.

Additional challenges include the need to consider and preserve product freshness, the need to calculate available-to-promise (ATP) inventories accurately and the need to prioritize orders in a strategic manner. In addition, the CPG industry is characterized by large daily order volumes, which means making optimal choices quickly, at massive scale.

Download the whitepaper to see how Blue Yonder's Order Management solution can help you adapt to changes when conditions and priorities shift.