The pandemic exposed supply chain vulnerabilities in nearly every industry sector. According to the BCI, in 2020, the number of organizations experiencing 10 or more disruptions increased by over 27 percentage points. Customer shifts toward online buying created new expectations for product availability and forced e-commerce into the spotlight, which drove retailers to tighten compliance requirements – placing increased pressure on CPG suppliers to meet new protocols or face significant fines. And for the first time in decades, supply chain management was escalated to a C-suite conversation and has become a strategic business imperative for suppliers worldwide.
As CPG companies make critical assessments that evolve retail supply chains for greater optimization, one program has proven transformational – Retail Consolidation. A simple concept that yields immediate cost savings, decreases carbon footprints, and improves overall supply chain performance. Suppliers can comply with retailer requirements while growing their business via higher in-stocks, stronger profitability, line extensions, and more.
CPG suppliers leverage economies of scale by sharing truckloads with other customers to create a single, full truckload to the same retailer distribution center. Inventory is consolidated with other products at strategically located warehouses, then taken by truck directly to a retailer distribution center. This approach creates the most efficient route to retail by eliminating supply chain redundancies.
In fact, one truckload shipment in our Retail Consolidation program replaces 13 Less-Than-Truckload (LTL) shipments. Beyond transportation cost savings of 20-30%, our customers benefit from the highest performance rates in the industry – 98% On-Time and 99% In-Full, with nearly 100% inventory accuracy.
- Example of a Texas customer to a Retailer DC in Florida
2 days transit time
Inventory is consolidated with other products in our Chicagoland warehouses, then picked up on RJW-managed trucks traveling a direct route to the retailer distribution center near Brooksville, FL.
6 Days Transit Time
Freight travels an indirect route making many stops to unload, crossdock, and reload - sometimes including multiple stops in a single city. This increases transit time and creates opportunities for compromised inventory and poor delivery performance.
This past year has exposed wide-spread supply chain vulnerabilities, yet it also has given leaders a platform to elevate understanding of supply chain value – repositioning it as a strategic business imperative. The goal must be to build a more resilient, efficient supply chain that contributes to overall growth. While Retail Consolidation is one program within a complex logistics framework, it is game changing for today’s CPG suppliers. In today’s high stakes logistics environment, partnering with a 3PL that has unmatched logistics expertise has never been more important.