Future of Consumer Packaged Goods Transportation Spend Management
Consumer packaged goods (CPG) supply chains are a major player in global economics. In 2020, these complex supply chains were strained to the limit as the COVID-19 pandemic wreaked havoc throughout global logistics. As consumers shifted toward e-commerce and the global shutdown cut off providers from their main suppliers, it was a wakeup call—when supply chains focus only on costs, they’re fragile and vulnerable. Companies that targeted cost reductions and more could quickly shift and adapt. Not only did they survive, but they used that shockwave to onboard more customers and widen the gap from the competition.
This has led to more than 90% of companies rethinking their supply chain layout and networks. It’s time to optimize your Transportation Spend Management within your supply chain—you gain cost reductions and optimization, as well as resiliency, flexibility, and more. Here’s what you need to do to ensure your CPG supply chain management remains competitive in today’s world.
View Supply Chains as Strategic Opportunities
Companies that once viewed their supply chains as cost centers are beginning to see them for what they are: driving forces in the pursuit of dominating the market. A supply chain’s capabilities is the differential between success and failure, the backbone upon which growth is built.
For a supply chain to become equally resilient and profitable, however, you need complete control and global visibility. That’s why we’ve created the Trax Transportation Spend Management Maturity Model, a framework that provides a roadmap for large, global enterprises to shift from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain for all modes and geographies. By moving through the three tiers of the maturity model—Proactive, Optimized, and Leading—your supply chain becomes more dynamic and resilient while simultaneously increasing your cost reductions. Transportation Spend Management makes your supply chain a powerhouse for your company’s growth and prosperity.
Increase CPG Supply Chain Investment
A Gartner survey reveals that 87% of respondents plan to invest in supply chain resiliency within the next two years, and 89% desire to invest in agility. The focus on leading companies, such as Amazon and Target that thrived during the pandemic, has highlighted the importance of a supply chain’s role in maintaining existing customers and onboarding new ones.
But investing must be done strategically. Transportation Spend Management is what complex large, global companies need—it delivers end-to-end visibility into your spend to identify gaps and opportunities to increase cost reductions, ultimately optimizing your spend for maximum flexibility, efficiency, and profitability. Aligning your Transportation Spend Management and business budgets with your long-term goals requires careful planning and scalability with tools that give you real-time, reliable data for analysis, such as Trax’s Budget Manager.
Include Supply Chain Managers on Decision Making
With supply chains serving as a major player in a company’s success, it’s critical to include supply chain managers in decision making. Take into account the fact that 67% of CPG and retail companies expect supply chain managers to offer insights and input into strategic decisions. Supply chain managers already make decisions that impact the company as a whole: 90% of companies plan to make changes to their logistic networks, including supplier location, flexibility, and overall footprint, which positively impact delivery times, transportation costs, brand name, and more.
To offer the most value, supply chain managers need insights based on real-time, reliable data. Maturing through the Trax Transportation Spend Management Maturity Model means you gain deep visibility and high-quality data to offer objective, strategic input. Data management through Trax and Transportation Spend Management is unique in that it centralizes and normalizes data as it pertains to transportation spend, offering you insights into cost drivers, cost relative to different business perspectives, and more to boost your business intelligence.
Build Agility and Resilience in CPG with Transportation Spend Management
As 2020 saw trade barriers increase, customer expectations shift, and supply chains crumble, it became apparent that cost-oriented supply chains are only effective when times are smooth sailing. Of the consumer packaged companies surveyed, 66% report that their strategy will change significantly in the next three years because of the pandemic, with resiliency rising to the top of the list.
Having agile and resilient supply chain means you can survive even blows brought on by global crisis and still adapt to use the challenges to increase market share. The foundation of such agility, dynamicity, and flexibility lies within the processes—optimized processes and costs offer the capabilities to go after new opportunities.
Transportation Spend Management builds your agility and resilience. Through utilizing our Carrier Management services, for example, you have the data and insights to choose the best global, multimodal carriers for each job, thereby steering your CPG transportation logistics closer to an agile logistics network. Or consider freight audit and payment—a tedious, labor-intensive task. Outsourcing freight audit and payment to an expert like Trax means boosting cost reductions, sparing resources, driving growth, and improving operations. Transportation Spend Management optimizes every aspect of your supply chain so no matter what storm is thrown your way, you can navigate the challenges to turn them into opportunities and become a leader in the market.
Boost Automation
Companies want to invest more into automation, and for good reason—automating mitigates human error, increases efficiency, and frees up resources to take on other tasks like going after new business opportunities.
Automating supply chain management processes is becoming a more common practice. One way this occurs is via centralizing all of your data management to deliver a comprehensive view of the information you need to make data-informed decisions, boost business intelligence, and drive up your Return on Investment (ROI). For example, our Rate Manager can help your team easily identify the best suitable vendor and boost productivity through centralized, global collaboration. By automating your processes, you can quickly shift resources and practices to adapt to the most straining of times.
Use Forecasting
Forecasting is a complex task that can be costly, at best, if done incorrectly. As many as 91% of executives agree that forecasting in 2021 needs to look different than it has in the past in order to be prepared. Companies need better visibility to prepare for risks or uncertainties rather than just react to them as they arise.
Companies in the Leading stage of Trax’s Transportation Spend Management Maturity Model excel at this. Precise forecasting requires high-quality, real-time data constantly flowing into your analytics. Leading companies have optimized their data management and other Transportation Spend Management processes to obtain that influx of data, and they know how to expertly use it. While other companies flounder during market shifts or uncertain times, these companies embrace those times to make quick data-driven decisions to snatch new opportunities and grow their market share.
Leverage Industry 4.0 Tools
Companies must embrace the latest consumer packaged goods supply chain solutions, commonly referred to as Industry 4.0 tools. Take Trax’s platform—it improves visibility throughout your logistical network, enhances end-to-end performance, optimizes costs, and accelerates decision-making time. These are all critical capabilities needed to weather a storm.
It’s important to know which tools are right for the job and that those tools will stand the test of time. At Trax, we’ve mastered Transportation Spend Management and have taken that expertise to create an innovative solution that can take every facet of your Transportation Spend Management to the next level. Our solution works with your existing platforms to create a roadmap to optimizing your consumer packaged goods supply chain management operational, financial, analytical, and performance processes. We help you reduce costs, enhance efficiencies, create stronger relationships with your carriers, optimize your data management processes, and gain end-to-end visibility throughout your Transportation Spend Management.
Transportation Spend Management is Key to Success
The year 2020 brought about a new future for consumer packaged goods supply chains. By focusing more on agility and resilience, you can enhance and bullet-proof your Transportation Spend Management. You gain agility, cost-effectiveness, and enhanced visibility so you’re prepared for uncertainty, and better yet, ready to take advantage of it to lead the market. To learn more about maturing your Transportation Spend Management, contact Trax today.