The consumer goods supply chain is complex. Flexibility and responsiveness are more critical then ever in the current landscape. With changing customer demands, the FMCG industry is questioning how to keep delivery numbers high and costs down. The fierce competition in the FMCG sector has also highlighted the need for innovation, faster deliveries and increased quality.
In our most recent LinkedIn poll, we asked our social media followers what they thought the biggest supply chain issue was in the FMCG industry in 2022.
FMCG industry supply chain issues: what we found
Supply chain sourcing
Of those that responded, 44% cited supply chain sourcing as the biggest supply chain issue in the FMCG industry in 2022.
In FMCG brands, organisations see their suppliers not simply as vendors but as key assets to their business strategies. Ensuring the availability of all required raw and packaging materials with the right supplier, at the right time, is a significant challenge. Particularly in today’s challenging market with products in all industries being harder to obtain.
Product cost concerns
33% of respondents answered that product cost concerns was currently the greatest issue in the FMCG industry supply chain.
Rising inflation is putting pressures on many industries, including those in FMCG. Many retail analysts are predicting shoppers will change some of their spending habits over the next year. This could mean consumers becoming less likely to stick with a single brand. Instead, we may see consumers switching retailers and brands to get the best possible value. As inflation becomes a critical concern to businesses in the food supply chain, it will cause tension in B2B relationships. With new border measures, labour shortages and regulatory changes, it’s important businesses are able to keep costs low to pass the benefit on to customers.
11% of respondents highlighted traceability challenges as the biggest FMCG industry issue for 2022.
Due to media attention and increased regulations, traceability is a goal that stakeholders throughout the FMCG industry share. Consumers bear the risk of health-related consequences when businesses make errors in ensuring allergens and declarations aren’t 100% accurate. Implementing practices for thorough and accurate tracking can be difficult for large established brands. Consideration therefore needs to be put into new food or technology to help solve traceability problems. `
Finally, 11% highlighted ‘other’ as the biggest supply chain challenge facing the FMCG industry in 2022.
While businesses within the industry invest a lot into ensuring supply chains are efficient, the traditional infrastructure isn’t as cost-effective as it once was. Being able to respond to change could be a possible challenge highlighted within the ‘other’ category. To respond to transformative changes in the food industry supply chain, applications to reduce cost and increase responsiveness will be required.
Additionally, distribution is also a potential challenge for the FMCG industry. Particularly the need for flexibility so that organisations can adapt to seasonal fluctuations and shorter life spans of products. Streamlining processes and maintaining economies of scale to meet price expectations will be important ways to address this and achieve greater supply chain efficiency.
B2BE’s experience in the supply chain sector allows our customers to build, expand and adapt successfully, enabling greater effectiveness. To engage with B2BE and offer feedback on what matters most to you and your business, make sure to follow us on LinkedIn and across social media. You can also vote in our latest LinkedIn poll.