Lennart, more and more retailers and FMCG manufacturers are looking for ways to optimize their supply chains. Yet, the basic transportation chain structure in pick-up logistics from consumer goods manufacturers to retail has not changed in decades. Why is now the time to take a closer look at this supply chain area?
By digitizing pick-up logistics with integrated planning and real-time transparency, we can identify enormous optimization potential. This enables businesses to rapidly save up to 10 percent in operational costs and, at the same time, significantly improve delivery services.
In the past, retailer pick-up logistics planning and material management was usually the responsibility of consumer goods manufacturers. Is retail starting to have a stronger impact on pick-up logistics?
At the very least, we can say that retail has a strong influence on the general conditions of pick-up logistics. This is because retailers want to optimize supply chains holistically for themselves and, in particular, to level delivery flows to retail warehouses. In addition, individual retailers are increasingly deciding to take material management into their own hands to make better use of their own transportation resources or design more cost-efficient and flexible routes.
Are we seeing a paradigm shift in the predominance of pick-up logistics?
The answer is clearly no. The retail sector is concentrating more on using consistent synergies within its own networks and more specifically on taking over pickup for small consumer goods manufacturers. Medium and large consumer goods manufacturers, however, will continue to manage a large part of transportation to retailers.
What options do consumer goods manufacturers then have to optimize their supply chains?
Transparency is the basis for successful optimization. For 4flow, this means a holistic approach through integrated transportation management. There is currently a strong trend in the FMCG industry towards building central control towers to plan and control the entire network in an integrated way – usually with a new transportation management system (TMS) that integrates all network partners via a cloud-based platform.
And what if consumer goods manufacturers want to achieve this goal but are reluctant to build their own organization or implement their own software?
These types of businesses are increasingly choosing to plan, control and optimize their global transportation networks together with an external service provider. 4flow is a fourth-party logistics (4PL) service provider and, compared to a 3PL, is neutral and does not have assets. It has established processes, a fully integrated TMS and a well-trained organization.
Can 4flow work together with FMCG businesses to transform existing processes into digital and integrated transportation management?
Yes, it can. Whether by building their own transportation control towers or through working together with 4flow as a 4PL partner, our customers have been able to achieve significant operational cost savings and increase the performance of their networks. Enhanced transparency also enables them to dynamically plan item availability, dock occupancy and resource utilization in their warehouses.
Thank you very much for the interview, Lennart!
A similar article was published in Issue 47 of the German industry publication Lebensmittelzeitung
