Each year, Kane Is Able sponsors a "CPG Think Tank Exchange." This year's gathering was held recently and executives from CPG manufacturers, major retailers, and the logistics consulting community shared ideas about the future of the CPG supply chain. Here's a taste of the ideas that were discussed and debated.
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On the impact of profit...Consultant and former A&P logistics VP John Metzger said larger, lower-margin businesses like grocery must put more focus on driving even the smallest logistics savings. To match the profit impact of a $250k savings in freight, a company with a 25% profit margin would need to add $1 million in sales, while a company with a 1% profit margin would need to add $25 million in sales.
On what's important...in a word, CASH. Cross-docking, drop shipping and other strategies that move product quickly through the CPG supply chain help to reduce inventory and free up cash.
On the challenge of mid-sized CPG manufacturers...Ryan Winters of Topps says collaboration could be the key to future supply chain efficiency for companies willing to consolidate freight and share infrastructure costs.
On what 3PLs can do better...Lee Stucky, former VP of International Logistics for Walmart, urged 3PLs working with retailers to get closer to the action and work more directly with vendors and individual stores to get a "feet on the ground" understanding of bottlenecks and improvement opportunities. Jack Ampuja, president of Supply Chain Optimizers, said 3PLs must transform from being "great counterpunchers" (reacting to challenges presented to them) to innovators, leading their clients to implement new and better processes.
Herb Shields, consultant and former Unilever logistics executive, blogged about the Think Tank Day on his DCVelocity blog: Consumer Goods and the Supply Chain.
Want to learn more about the CPG Think Tank Exchange? Contact Chris Kane at (570) 558-5100.