Rising inflation and supply chain volatility are squeezing the revenue, income and margins of CPG suppliers nationwide. To stay ahead of the unpredictability in both global logistics and consumer buying behavior, suppliers must evolve their supply chains to not only survive – but, thrive. Below are key strategies suppliers should leverage to mitigate inflationary pressures, accelerate agility and drive business resilience.
Approach selection of an integrated retail logistics provider as a strategic business decision – because it is. Rising inflation rates, higher consumer expectations and significant supply chain disruption have necessitated this shift. When selecting a 3PL, consider the importance of asset-based ownership. Through total ownership, middleman costs – typically passed on by 3PLs who outsource their warehousing and trucking operations – are eliminated to create the most cost-effective route to retail. This enables suppliers to protect their profit margins by tapping a 3PL’s streamlined operations that reduce overall costs and drive agility.
Build value-added services into the 3PL partnership to reduce turnaround time and redundancies, while streamlining resource allocation throughout the retail supply chain. Leveraging a full-service 3PL’s packaging, labeling, point-of-sale display services and more, suppliers can move their products through The Middle Mile more efficiently, while improving their ability to focus on their core business. Additionally, through a one-inventory model, suppliers significantly decrease labor charges and eliminate redundant overhead warehouse costs. By controlling distribution from a centralized region, suppliers benefit from preferred pricing and lower trucking rates - resulting from concentration of high freight volumes to and from one region.
Insights and perspectives for today’s supply chain leaders.