As we have seen over the past year, the global supply chain is a delicate ecosystem that we all rely on to provide essential goods and keep the economy moving. The blockage of the Suez Canal was a devastating example of this fact, as the stranded Evergreen transport ship held up 12% of global trade each day. Although this blockage has certainly been the most high-profile of supply chain issues, other events, like the multiple COVID-19 outbreaks throughout key distribution centers in Asia, had an equally disastrous impact.
There are dozens of industries that rely on these crucial distribution lines to send their products around the globe. And while large-scale errors are out of the realm of control for most companies, many factors go into maintaining a strong distribution process. On the technical side, ERP systems and digital infrastructure can greatly improve operations monitoring and management. In contrast, both high-level and on-the-ground protocol changes can improve performance on the human side.
These systemic changes can be challenging for enterprises to carry out internally, especially given the global nature, and challenges, of consumer goods distribution. By investing in a powerful ERP platform and leveraging the experience of global rollout experts, it’s possible for stakeholders to avoid, or at least mitigate, the impact of the challenges outlined below.
Challenges of Global Consumer Beverages Distribution
The consumer packaged goods industry enjoyed decades of success throughout the late 20th and early 21st century, but this model has produced a rapid industry decline over the past decade. The previous 5-factor model for CPG success is running up against multiple challenges that must be adequately addressed to achieve optimal results in today’s tech-enabled global market. Here are some of the major issues currently facing consumer beverages and other packaged goods manufacturers.
The rapid transition towards direct-to-consumer sales through eCommerce contributes to a huge percentage of industry growth. The shift to online platforms and systems also produces new data lakes that need to be successfully tracked and managed. From tracking the efficiency of third-party distributors to analyzing trends in consumer needs and behavior, master data is a crucial part of the success of any consumer beverages provider.
Critical practices, like master data governance and master data management, must be carried out properly to preserve the integrity of strategic information. Despite this, a significant percentage of businesses don’t have sufficient data policies or practices in place. This restricts their ability to use accurate data to identify new revenue streams, eliminate costs, and refine processes.
Stock Keeping Units
As anyone in the CPG and retail sector knows, Stock Keeping Units are essential to the proper distribution of products. These scannable barcodes have revolutionized the management of inventory and also help collect important sales and process data. Unfortunately, without the proper systems in place, SKUs can also rapidly proliferate into an issue of their own.
When consumer beverages and other packaged-goods companies expand their inventory, new SKUs are developed for each product. This is a good sign of company growth, but can quickly spiral into a managerial nightmare if not properly addressed. As a result, capital is stuck in products, fulfillment is harder to optimize, and storage fees can skyrocket.
3PL Stock Management
Stock management helps reduce overhead, lower costs, and prevent wasted products. As technology continues to transform the CPG and logistics industries, third-party logistics platforms are helping to keep the supply chain running smoothly. Unfortunately, these systems can be challenging to integrate with the in-house software tools used by the manufacturers and producers. Without proper integration, the benefits of 3PL stock management tools are simply another wasteful process.
The Three C’s of Consumer Beverages
Experienced consumer beverages professionals know that these challenges represent a barrier to maintaining the Three C’s of Consumer Beverages: Cost Control, Margin Control, and Budget Control. Without proper control over these factors, any growth within the consumer beverages sector is impossible.
Cost Control: The process of identifying and reducing costly procedures to improve profit
Margin Control: The process of ensuring that an increasing percentage of sales are turned into profit
Budget Control: The process of managing expenses for more profitable income
The consumer beverages market segment certainly sees stronger profit margins than other aspects of the food and beverages industry. Still, for companies, private equity investors, and M&A groups to realize these benefits, a successful ERP rollout is required.
Successful ERP Rollout in the Consumer Beverages Market
When enterprises in the CPG and consumer beverages market go through a digital transformation or ERP system update, it’s critical that they use an experienced vendor group and a team of rollout experts. These investments more than pay for themselves, as common pain points throughout the supply chain are avoided in place of a series of operational benefits:
Business Transfer: When businesses change ownership, implementation and integration of new ERPS is crucial in order to hit the ground running
Customer Portals and Integration: Providing B2B and D2C beverage consumers with a seamless user experience improves customer retention and satisfaction
Ecosystem Transformation: New online ecosystems are driving digital transformations to produce more capable, profitable CPG enterprises
Systems Automation: Many of the traditional administrative tasks involved in CPG production can now be streamlined through ERP platforms
Third- and Fourth-Party Logistics: From integrating 3PL systems with legacy ERPs to adopting enhanced, comprehensive 4PLs, supply chain management is being revolutionized
If you’re interested in learning more about how a successful ERP rollout can improve cost, margin, and budget control for your consumer beverages company, reach out to be one solutions today!
101 Post Views