Supply and Demand Planning for Consumer Packaged Goods Businesses

Posted on November 21 , 2022. 

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Facing unprecedented global change and shifting patterns of consumer behaviour, the CPG industry must embrace technological solutions to thrive.

​The COVID pandemic and its effects on all levels of consumer behaviour have been felt strongly across the Consumer Packaged Goods industry. CPG players need to respond by increasing their investment in strategic planning, to adapt to the digital transformation of the global market.

Supply chain disruptions, raw material price spikes, transportation bottlenecks, rising shipping costs, and rapidly shifting consumer purchasing patterns have fundamentally changed how supply and demand planning must be conceptualised and implemented.

Technology upgrades are an important part of the necessary corporate response, as they allow businesses to track and even influence these emergent trends. This article will examine the utility of supply chain planning technology within the CPG industry, with a particular eye toward the ways planners can minimise waste and increase profits amid the shift towards digital and direct-to-consumer (DTC) activities.

Planning for a sustainable future

At present, regional and global instability makes it hard to forecast both demand and supply availability. Nevertheless, the rise of ESG-focused business practices has greatly increased post-COVID, with sustainability evolving into a widespread strategic pillar.

These simultaneous challenges can be addressed with the help of technological advances. AI-powered forecasting tools can facilitate data-driven planning within a fast-changing environment, while advanced communications platforms enable easy coordination between large numbers of suppliers, including those with shared sustainability goals.

Handling disruption

COVID-related lockdowns decimated the supply chain in recent years, and the partial isolation of major economies such as China continue to greatly impact access to resources and markets. Bottlenecks in shipping have likewise made it harder to source materials, secure containers, book space on boats, or find ports that are processing goods swiftly and effectively.

Regional issues in the Middle East, as well as in Russia and Ukraine, have also greatly affected the price of oil and energy, which adds further costs to manufacturing and transportation. The rising cost of raw materials such as paper pulp, wood, and plastic, also place a growing burden on manufacturers.

These disruptions are taking place amid a generational shift in consumer spending and shopping patterns. Each of these factors has affected not only the supply chain in general, but also the ways in which goods are manufactured, packaged, and sold. The rise of environmentally friendly manufacturing, print-on-demand, and customization all mean that agile and flexible companies are better situated for a post-pandemic market.

The right application of technology, together with skilled talent and sensible procedures in place, can help companies navigate these unprecedented challenges and opportunities. The use of Blockchain inventory tools, smart contracts, digital ledgers, and AI-driven systems have greatly improved performance, letting companies manage and adjust their supply chains as necessary to become more resilient to shocks. The importance of advanced analytics likewise cannot be overstated, as companies look to increase efficiency in the post-pandemic period.

Although change management is always a challenge, the pandemic has led to a much-needed general willingness to revisit core assumptions about how work is done and how technology can streamline key operational processes.

The key ingredient is talent

Of course, even the best machines and software tools can achieve very little without the right talent to operate them. Fortunately, the normalisation of remote work and the “digital office” means that top talent can now be hired, trained, and relied on around the world, greatly increasing the quality and quantity of candidates available to CPG manufacturers.

Companies that are tech-savvy, flexible, assertive in their hiring strategy, and have a strong strategic focus will be well-suited to gain significant market share as they adapt to a changing business environment.

Connexus Global has the experience and expertise to help CPG businesses adapt to changing conditions, making supply and demand planning more effective with the help of talent and technology. Contact us today to get started.

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