According to a report published by Allied Market Research, the global FMCG logistics market is expected to grow at a CAGR of approximately 4.6 from 2020 to 2027. This growth is being driven by multiple factors — the end consumer’s increasing adoption of e-commerce, changing consumer buying patterns like the renewed trust in big FMCG brands rather than private labels, and improvements in last mile deliveries, to name a few. However, growth is currently coming at a cost and FMCG corporations are looking for ways to ensure that their supply chain outcome is greater than the sum of its parts.
Today’s FMCG supply chain
Through the era of globalisation, FMCG multinationals have developed partnerships with local suppliers and third-party logistics service providers around the world, resulting in a supply chain that’s highly interdependent. Additionally, continuous consumer demand for high-speed delivery of low-cost, multi-SKU products has pushed these supply chains to prioritise leanness over everything else. That being the case, today’s FMCG supply chain follows just-in-time models with little or no room for error.
The challenge with lean
Just-in-time logistics is built to deliver efficiency in terms of operational costs. In the ideal scenario, it works on the premise that very little can go wrong. Unfortunately, in the real world, this is not always the case. So, when rolls of toilet paper are missing from not on supermarket shelves but are stocked in warehouses, intended for offices and restaurants, the FMCG supply chain takes time to gather this information and has trouble diverting the product to retailers because of their lean inventory.
Present-day solutions provide visibility, but with multiple logistics parties involved, data is still very fragmented. Integration is very dependent on stakeholders providing information manually, and therefore real-time decision making is not yet the norm. Consequently, FMCG supply chains are looking to re-design their ecosystem into one that can bounce back quickly and prevent a disruption from affecting the end consumer.
The future of FMCG supply chains
FMCG companies have now begun to think long-term and invest in their supply chains. They know that they need to expect the unexpected, and for that reason have ranked "Overall Supply Chain Visibility" as their No. 1 focus when it comes to mitigating risks in the supply chain, according to the IDC 2020 Supply Chain Survey. After all, if you don’t know that a problem exists you cannot come up with a solution, let alone one that enables you to recover quickly.
In addition, visibility can play a crucial role in improving efficiency, reducing operational costs, smarter inventory management, and increasing speed to market. To achieve this, logistics teams will need to accelerate their digital transformation, implement technologies that continuously monitor systems and processes, and glean meaningful insights from this new data-driven approach. While FMCG companies realise that the days of annual health and due diligence reports are over, they must change their mindset and create a culture of continuous improvement.
Here’s where Maersk can help. We have supply chain management solutions like Maersk NeoNav, that break down silos and connect people, processes, and technologies to provide FMCG partners end-to-end visibility, real-time intelligence, and the confidence to make smarter decisions. Simultaneously, our people bring industry expertise and Maersk values to every interaction, helping companies manage relationships at every stage of the supply chain. With this combination of IQ and EQ, FMCG supply chains can not only stay ahead of potential disruptions, they can stay ahead of the competition as well.
The business outcomes
With Maersk NeoNav, you'll enjoy better visibility, control, and decision making.
Up to 1%
5% to 30%
Up to 2%
Up to 20%
Carbon Emission Reduction
5% to 15%
Perfect Order Improvement
Improved Transit Time Reliability
50% to 75%
Reduced Expanding Cost
5% to 20%
Reduced Transportation Spend
To learn more about how we’re trying to transform FMCG supply chain decision making with end to end transparency, click here.