Fmcg Supply Chain- Managing Complexity

1446 WordsSep 29, 20086 Pages
FMCG SUPPLY CHAIN MANAGING COMPLEXITY “Managing Complexity”: Managing complexity can be explained clearly with the help of following trends- 1) Increasing Number of Products and Services: With the increasing consumerism and competition among the organizations to attract more and more customers, customer has become more demanding and uncompromising. Companies are customizing products more and more to retain old customers and attract new customers, to fulfill increasing customer demand and gain competitive advantage over rival firms. This has led to the introduction of large number of new products with multiple SKUs which have very short life cycle. All these factors have led to increased complexity in supply chain which needs to be…show more content…
2) Large Number of Customers- FMCG products are large footprint products and have large number of customers. These large numbers of customers consume FMCG products in relatively smaller quantity, so last mile delivery is a challenge for producers. Producers need to have a distribution channel to cater to small demand of an individual customer. 3) Large Number of SKUs- Large number of SKUs in FMCG industry makes the products handling really complex. Keeping track of stock with large number of SKUs is a complex task. Receiving FMCG goods, checking them, storing them in the correct way and then checking them out again takes long time and costs huge money. 4) Faster Turnaround- FMCG products require faster turnaround due to shorter shelf life and seasonal demand of various FMCG products. This requires supply chain to be very agile and puts extra pressure on supply chain. 5) Wide Distribution Network- FMCG products are relatively low value products for which convenience of purchase is the fist criteria for buying. This creates a necessity for wider distribution network close to end customers. 6) Shelf Presence- Shelf presence and visibility of products is vital to FMCG products. Any Stockout results into loss of sales because customer is not willing to wait for these kinds of products and plenty of rival products are available in the market. So, timely supply of goods is very
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