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Save Over 50% of Your Costs With no Effort on RTM
by Archit Pathak
April 24, 2024 | 02 min read
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The Consumer Packaged Goods (CPG) industry is a dynamic landscape facing constant pressure to reduce costs. Costs can be reduced by 15-30% for transporting and warehousing and 50-80% in administrative costs through a digitised supply chain. Embracing technology and digitisation across the supply chain and implementing an efficient Route to Market (RTM) strategy can significantly enhance your CPG business.
The Power of a Digitised Supply Chain
A digitised supply chain leverages technology to create a transparent, interconnected network. This translates to several key benefits:
Enhanced Visibility: Studies show that companies with highly digitised supply chains experience a 4.1% annual efficiency gain. Real-time tracking of inventory, materials, and shipments allows for better decision-making and proactive responses to disruptions.
Optimised Inventory Management: Data-driven insights enable accurate demand forecasting, reducing the risk of overstocking or stockouts. This can lead to significant cost savings, with estimates suggesting a 2.9% annual revenue boost for businesses with digitised operations.
Improved Collaboration: Digital platforms facilitate seamless communication between manufacturers, suppliers, distributors, and retailers. This fosters collaboration and streamlines processes, leading to faster product delivery and reduced errors.
Building an Efficient Route to Market
An optimised RTM strategy focuses on getting your products to the right place, at the right time, and at the right cost. Here’s how digitisation can empower your RTM
Route Optimisation: Software can analyse factors like traffic patterns, delivery locations, and product types to create the most efficient delivery routes. This reduces transportation costs and fuel consumption and provides more time for the on-ground sales force to perform other activities in the market.
Smart Warehousing: Strategically placed warehouses following a hub and spoke model with automated systems to track inventories can expedite order fulfilment and minimise delivery lead times.
Data-Driven Decisions: Sales and market data can be used to identify optimal distribution channels and tailor promotions to specific regions, maximising product reach and sales.
According to McKinsey a digital supply chain and functional excellence can reduce lost sales and services by 65-70% and it can free up capital stuck in inventories by 35-75% by forecasting the need of inventory and optimising it.
Digitising your supply chain and optimising your RTM strategy is no longer optional – it’s a necessity for success in the competitive CPG landscape. By embracing these advancements, CPG companies can gain a significant edge, reduce costs, improve efficiency, and ultimately, deliver greater value to their customers.
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