FMCG supply chains: Boosting visibility in an interconnected world

10 February 2022

According to a report published by Allied Market Research, the global FMCG logistics market is expected to grow at a CAGR of approximately 4.6 from 2020 to 2027. This growth is being driven by multiple factors — the end consumer’s increasing adoption of e-commerce, changing consumer buying patterns like the renewed trust in big FMCG brands rather than private labels, and improvements in last-mile deliveries, to name a few. However, growth is currently coming at a cost, and FMCG corporations are looking for ways to ensure that their supply chain outcome is greater than the sum of its parts.

Evolving for the omnichannel market

FMCG giant Unilever, for example, had to radically alter their supply chain operations as the Covid-19 pandemic changed the way people shop. As consumers went online to purchase the most basic of necessities, Unilever was faced with the challenge of delivering to an omnichannel market.

Effective 2022, the company signed a four-year international freight supply chain management partnership with Maersk to develop and manage Unilever's control tower, which centralises its ocean shipping and air transport. The partnership will boost Unilever’s visibility and operational efficiency across their supply chain and cut down emissions so that they can reach their goal to become carbon neutral by 2039.

Through our digital supply chain management solution Maersk NeoNav, Unilever will be able to break down silos and connect people, processes and technologies to have access to end-to-end visibility, real-time intelligence, and the confidence to make smarter decisions.

Additionally, the Maersk Emissions Dashboard – a digital solution to provide enhanced carbon footprint analysis – would support the FMCG brand’s sustainability goals by providing relevant emissions reporting and optimisation insights.

We’re delighted to be working with Maersk to unify our global ocean and air logistics operations. Not only does this end-to-end approach ensure better service for our customers and reduce business waste, the added visibility will also help us mitigate risk, increase agility and help us achieve our company-wide target of becoming carbon neutral by 2039.

Michelle Grose

VP global logistics and fulfilment at Unilever

Today’s FMCG supply chain

Through the era of globalisation, FMCG multinationals have developed partnerships with local suppliers and third-party logistics service providers around the world, resulting in supply chains that are highly interdependent.

Additionally, continuous consumer demand for high-speed delivery of low-cost, multi-SKU products has pushed these supply chains to prioritise leanness over everything else. This has led to high-frequency purchasing, fluctuating volumes and the need to constantly evolve.

With the rise of DTC (direct to consumer) e-commerce, supply chains – previously built for bulk orders delivered to a single or few locations – are having to pivot to keep up with the current surge in demand.

Now, FMCG brands are compelled to strengthen their supply chain, with a primary need for visibility, in order to recognise changes in demand and deliver on fulfilment and inventory flow. Consequently, FMCG supply chains are looking to re-design their ecosystem into one that can bounce back quickly and prevent disruptions from affecting the end consumer.

The future of FMCG supply chains

FMCG companies have now begun to think long-term and invest in their supply chains. They know that they need to expect the unexpected, and for that reason, have ranked ‘Overall Supply Chain Visibility’ as their No. 1 focus when it comes to mitigating risks in the supply chain, according to the IDC 2020 Supply Chain Survey. After all, if you don’t know that a problem exists, you cannot come up with a solution, let alone one that enables you to recover quickly.

In addition, visibility can play a crucial role in improving efficiency, reducing operational costs, smarter inventory management, and increasing speed to market. To achieve this, logistics teams will need to accelerate their digital transformation, implement technologies that continuously monitor systems and processes, and glean meaningful insights from this new data-driven approach. While FMCG companies realise that the days of annual health and due diligence reports are over, they must change their mindset and create a culture of continuous improvement.

When Unilever partnered with Maersk, they understood the benefit of collaborating with a global logistics solution provider that could manage the new market demand and provide visibility and sustainability solutions to not only support their immediate requirements but also reach their sustainability goals.

How can Maersk help FMCG businesses strengthen their omnichannel supply chains?

With supply chain management solutions like Maersk NeoNav, alongside our teams of industry experts that bring Maersk values to every interaction, we can help companies manage relationships at every stage of the supply chain. With this combination of IQ and EQ, FMCG supply chains can not only stay ahead of potential disruptions but also boost their operations to mitigate risk, improve agility and efficiency and increase sustainability.