The global fast-moving consumer goods (FMCG) logistics market is set to expand significantly from US$131.54 billion in 2021 to US$105.85 billion by 2028, according to a report from leading market researcher Fortune Business Insights.
FMCGs are consumer-packaged goods produced on a mass scale with a short shelf life and a fast turnover rate, and include products such as packaged food, toiletries, medicines and cleaning products. Some, such as meat, dairy, fruits and vegetables, are highly perishable and face seasonal supply and demand challenges. Food-grade warehousing with ambient and cold storage capabilities are essential to ensure a safe, secured and compliant supply chain.
The FMCG supply chain is incredibly vulnerable to even the slightest market fluctuation, and third-party logistics and warehousing providers must be nimble enough to adapt to stay competitive and cater to its customers’ unique requirements.
Changes to consumer habits were accelerated by the Covid-19 pandemic which prompted increased demand for last-mile and next-day delivery services required by online shopping. Amid growing macroeconomic challenges, companies are increasingly turning to near-sourcing to shorten the supply chain and ensure fast turnaround for product delivery.
Some third-party logistics and warehousing providers have stepped up implementation of digital solutions to keep pace and enhance their market offerings. And, due to the complexity of the FMCG logistics sector, technology has a huge potential to boost warehouse and supply chain efficiency such as using advanced docking system to control temperature and humidity in facilities, all while providing long-term stability to an industry susceptible to even the slightest shift in market conditions.
As the FMCG logistics market gains steam in the coming years, fulfilment centres that do not embrace digitalisation risk falling behind those that successfully adopt digital solutions to keep supply chain management flexible, adapt to market changes and increase overall efficiency. And what’s more, they empower customers to make data-driven decisions to improve their own supply chains and businesses.
Going digital
Warehouse management systems are the backbone of modern fulfilment centres. For FMCGs, they help companies keep on top of product stock levels with traditionally razor-thin profit margins with a range of capabilities such as warehouse space allocation, stock tracking, bulk packing and task scheduling.
Further, the visibility technology offers enables customers to pre-empt supply chain breakdowns that can result in empty shelves and lost income. That is why third-party logistics providers must use technology to provide transparency in supply chain management, regardless of scale.
Wide-ranging benefits
GAC has long been at the forefront of technological innovations in the warehousing and contract logistics sector. We have introduced a number of digital systems to our facilities worldwide to optimise the supply chain efficiency of several customers. Some examples include:
- a proprietary and flexible warehouse management system GACWare that provides customers with a real-time snapshot of stock levels and issues advanced alerts when new stock is required;
- an on-the-go warehouse scanning feature to streamline operations and reduce human error;
- specialist software to facilitate serialisation and tracking of goods for pharmaceuticals, with the potential to be adapted for FMCG and other sectors;
- a tailored supplier invoice management system that replaces paper-based documentation;
- a customer relationship management system for offices worldwide.
Cumbersome paper-based documentation can significantly slow the FMCG supply chain which is so reliant on rapid turnaround and fast delivery and susceptible to potential human error. GAC met those challenges by being an early adopter of automated and digital documentation processes.
Digitalisation facilitates faster deliveries, smoother trading partnerships and round-the-clock order processing while enabling staff to focus on higher-value activities, such as acquisition and retention of customers.
Competitive edge
The FMCG industry looks set to go beyond these digital solutions, with up-and-coming technologies such as robotics, artificial intelligence, quantum computing, additive manufacturing, augmented reality and unmanned vehicles, all having potential to further enhance the complex logistics the sector relies on.
While this new generation of solutions is currently in its infancy, logistics providers and fulfilment centres should already be looking at how it can be applied to improve efficiencies and drive down production and service costs. And players that do so will gain a competitive edge in a market that faces increased disruption in the near term.
