08/08/2023

Transforming and Optimising Retail Supply Chains through Digitalisation

08/14/2023 | 7 min

The evolution of digital technology has had a profound impact on how Grocers, Retailers, and FMCG markets operate. Consumer satisfaction in particular is under the spotlight and as a result, product distribution processes have undergone significant transformation with emphasis on efficiency and effectiveness. Digitalisation empowers data-driven decision-making to enhance overall customer experience, while also improving the bottom line for businesses.

In a recent webinar, we examined how the most successful Retailers and FMCG players in the supply chain lean on integrated technology to stay on top of rapidly changing consumer trends and mitigate costs while becoming more sustainable and better allocating resources for the future.

 

The customer knows best

Consumers are the dominant force driving markets today. As consumer references evolve and retailers find themselves faced with ever-changing demands, staying proactive and informed about purchasing trends is essential if you want to keep up. Modern consumers want convenience, value, transparency, and sustainably sourced products, and most of the time this means bringing the market to them. Covid-19 transformed how we live and shop – cementing E-Commerce, Direct-to-Consumer supply chains and Demand Chain Management. Bringing the market to consumers requires significant digital investment in exchange for strong ROI and in support of numerous supply chain processes:

  • Predicting final consumer demand and behaviour
  • Successful forecasting for pricing strategies and promotions 
  • Accurate and timely stock replenishment
  • Efficient logistics execution by optimising warehouse and transport operations
  • Enhanced supply chain integration and collaboration
  • Successfully managing supply chain complexity and providing enhanced transparency

 

“Digitalization is becoming a competitive necessity for grocery supply chain members who cannot stay behind if they want to survive in this cut-throat environment.”

- Neil Ashworth, Non-Executive Director, Retail Logistics Expert

Seeing is Believing (and Saving)

Data is the new gold and can enhance your business if you know how to leverage it. Though retailers operating in hyper-competitive markets can be reluctant to share their data, when Real-Time Data Visibility (RTDV) is integrated into the Transportation Management Platform it provides valuable insights to make data-driven decisions, improve operational efficiency, mitigate costs and be more sustainable.

 

“RDTV provides a significant opportunity to break the operational silos between grocery supply chain members and is supported by functional and cross-functional activities, processes, and KPIs."

- Gabriel Thomsen, Heineken

 

Supply Chain Visibility combined with Data Insights unlocks meaningful savings for operations and procurement teams. But what does this look like in practice?

Nestlé: a Visibility case study

We documented a case study with Nestlé focused on how consumer demand pivoted so rapidly during Covid-19. Nestlé was quick to recognise the severity of the situation, and implemented predictive ETA tools that would ensure they would retain a holistic view of all transport activity and operations across Europe.

With end-to-end load visibility combined with real-time insights derived from reams of data processed by the platform, they mitigated higher costs and achieved operational savings by avoiding escalations and increasing stability within the supply chain.

Shippers and retailers often find it challenging to verify their pricing strategies when negotiating with carriers. This is mainly due to the lack of external reference points from a procurement standpoint. Data tools like Market Insights provide an effective solution to these challenges – offering real-time insights into European transport markets, lanes, and their development. It provides external, neutral, and trustworthy market indexes – including capacity, contract and spot rates - and assists in smartly allocating loads between spot and contract, procuring the best rates, and achieving real procurement savings.

In Europe, retail warehouses have evolved throughout recent decades. These hubs took responsibility from suppliers for distributing products to retail stores, meaning retailers need visibility of incoming and outgoing loads. In this instance, inbound and outbound deliveries pass through the facility, and delays of one impact the other. In the realm of inbound logistics, challenges lie in accurately tracking the whereabouts and estimated time of arrival of deliveries to effectively organize unloading and processing. On the outbound side, inefficient route planning and poor coordination of deliveries means costly transit fees, more transportation waste, and reduced overall efficiency.

Lower Emissions = Bigger Savings

A Transportation Management Platform allows retailers to reduce emissions by assigning more sustainable routes and monitoring touchpoints along the way.

The benefits of CO2 reporting for retailers and FMCG companies are two-fold. Customers want to know they are purchasing from ecologically responsible retailers and producers, meanwhile accurately reporting on emissions can positively impact the bottom line as soon every kilogram of CO2 will have a price attached to it.

Carbon Visibility tools comprehensively track emissions taking into consideration primary data like engine age and size, exact route, load type, average speed, and driver acceleration to formulate precise calculations and accurate emissions reporting. But what does this look like in practice?

IKEA: a Carbon Visibility case study

Take a look at our case study on IKEA's carbon emissions and the differences between the two data sets to find out how much this impacts businesses. In a trial using our Carbon Visibility tool, the precise emission calculations were 13% lower than the default data averages – meaning IKEA could achieve up to 13% cost savings compared to the generalised industry emission averages.

Making the supply chain more sustainable involves the use of various tools and strategies that are readily available today to fundamentally reduce the environmental impact of transportation and logistics operations:

  • Last-mile delivery solutions that use electric vehicles or bicycles
  • Circular economy concepts with emphasis on reusing and recycling materials
  • Green suppliers that focus only on end-to-end sustainable production methods
  • Reducing empty miles with route optimisation, full truck utilisation, efficient loading and unloading processes, and shipper-carrier collaboration.

In union there is strength

Supply chain operations have significant influence over the high inflation and rising product prices, which means it’s in logistics managers’ hands to bring these costs down. How? By implementing unified solutions that both manage operational costs and the price of goods, while ensuring retailers and FMCG businesses stay competitive. Doing nothing represents too much of a risk. You can act by focusing on the following three key areas:

  • Intelligent, unified solutions that enable automation, such as machine learning, artificial intelligence, and clever algorithms
  • Data, which is most valuable when its aggregated, visible, and in real-time
  • Interoperability – which is key to collaboration, sharing and interacting with others in your supply chain

 

“The supply chains of the future will not look like the supply chains of the past.”

– Professor Michael Bourlakis, Cranfield University

 

Retail and FMCG markets are complex. Millions of SKUs to manage, multiple delivery points between locations, and supply chain demand volatility can only be managed if unification - collaboration, end-to-end visibility and data sharing – is fully enabled. Steps to unify and achieve vertical integration in the supply chain must include interconnectivity, cloud technology and data sharing. A Transportation Management Platform provides the conditions for supply chain to function optimally. When transport service providers, suppliers and retailers rely on the same platform, collaboration is easy, fewer costs are passed on to customers and all players enjoy better profitability.

Find out how Transporeon can help you grow your retail and FMCG business:

TRANSPOREON HUBS

Explore our Transportation Management Platform

Discover our Platform

BENEFITS

Insights Hub

Headline for Flip 2
  • Always stay one step ahead.
  • Gain useful insight into your performance as well as that of your logistics partners.
  • Identify bottlenecks and inefficiencies.

BENEFITS

Visibility Hub

Headline for Flip 2
  • Real Time Visibility as a companywide capability, rather than a feature. All modes, all covered. 
  • Reduce check calls and automate processes.
  • Reduce wait and dwell times with more accurate ETAs.
  • Reduce CO2 emissions and empty mileage.

BENEFITS

Sustainability Hub

Headline for Flip 2
  • Track, report and manage your transport emissions to meet sustainability targets. 
  • Discover the resources that will help you to measure, manage and reduce your carbon footprint in the most efficient and transparent way.

BENEFITS

Dock & Yard Management Hub

Headline for Flip 2
  • Bring order to the dock, warehouse and yard with visibility-driven dock scheduling and yard management solutions. 
  • Increase the speed of handling and control downstream processes, boosting productivity by up to 20%.
  • Reduce wait times by up to 30 to 40% and lower detention and demurrage charges.

BENEFITS

Freight Audit & Payment Hub

Headline for Flip 2
  • Automate your freight billing process and stay on top of your freight spend for all modes. 
  • Gain a clear picture of logistic operations based on a single source of audited and indisputable data.
  • Improve cash flow.

BENEFITS

Freight Sourcing Hub

Headline for Flip 2
  • A structured and scalable way to source the right partners for your spot, seasonal and long-term contracts.
  • All modes are all covered, from FTL to LTL, ocean, air and rail. 
  • Easily benchmark your procurement results with peers in your industry.
  • Become part of a global collaboration network.

BENEFITS

Transport Execution Hub

Headline for Flip 2
  • Move more freight and worry less. It’s the smartest way from load to asset, and vice versa. 
  • Incorporate spot shipments into your daily tactical execution process and rely on real-time insights.
  • Expand your pool of potential partners.