The Consumer packaged goods (CPG) industry is already experiencing a seismic change due to challenges including rising raw material costs, stalled demand, declining profits, skyrocketing retail pricing pressures and the never-ending shift in consumer preferences. Furthermore, the changing consumer preferences is bringing about new supply chain challenges for CPG companies. Companies selling consumer packaged goods must effectively identify and mitigate supply chain challenges coming their way in order to drive growth by reaching new customers and channels.
Leaders of consumer products companies need to strike a delicate balance between cost, quality, product innovation, and market growth, all while maintaining margins. Request a free proposal to know how experts at Infiniti can help you achieve this.
Supply chain challenges for CPG companies
Consumer demand for variety
Modern consumers are highly demanding. As a result, there is a constant urgency among players in the CPG industry to offer new products that match the changing consumer preferences. This translates to more SKUs and shorter product lifecycles. The consequent complexity in product development, sourcing, production, and fulfillment will add to the supply chain challenges faced by CPG companies. Reacting to changes in consumer preferences would mean that the CPG supply chain needs to be agile enough so that the required adjustments can be orchestrated end to end across the supply chain.
Venturing into new markets
Experts at Infiniti research are of the opinion that the fastest growing CPG companies are those that choose to compete in the fastest-growing product categories and geographic territories. Investing in the right markets is one of the key drivers for growth, which comes with its own set of challenges. Furthermore, overcoming key supply chain challenges in terms of flexibility will help companies in the consumer packaged goods industry to easily penetrate new markets and create potentially new delivery models and fulfillment channels.
Digital transformation of supply chains
Amidst the rising popularity of digital innovations and enhanced customer experiences, it is no surprise that digital transformation is one of the critical agendas for top executives at leading global CPG companies. However, this cannot be rolled out successfully unless their back-end infrastructure is not capable enough to ensure timely delivery of goods.
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