CPG companies are most concerned with transportation and network redesign — issues that barely registered with them two years ago — according to a report by The Boston Consulting Group on behalf of the Grocery Manufacturers Association.
The report — entitled “Time to Shift Gears: Top Trends in the CPG Supply Chain” — is the fifth in GMA’s bench-marking series on manufacturers’ outbound supply-chain logistics, which was based this year on interviews with executives at 40 CPG companies.
Transportation emerged as the top concern of 83% of those surveyed, compared with no mentions in the 2013 study, the report noted.
While fuel price volatility was a concern two years ago, the new report indicates the chief aggravations today are more structural, involving capacity constraints and escalating line-haul rates that are likely to keep transportation costs high and rising for the foreseeable future.
Among respondents, 72% cited network redesign as another key priority, compared with only 6% in 2013.
According to the report, several developments have propelled concerns with redesign, including heightened post-merger integration activity, higher transportation costs, the desire for more efficient and more carrier-friendly routes to market and the recognition that fast-growing new channels present vastly different operational and shipping challenges.

According to Daniel Triot, senior director of the Trading Partner Alliance, a joint leadership group of GMA and Food Marketing Institute, “This new report shows that CPG companies are dealing with both portfolio complexities — as companies introduce more new products and adapt to shorter product life cycles — and marketplace complexities — as they strive to serve fast-growing non-traditional channels such as convenience stores, dollar stores and drug stores.
“The logistical challenges of managing expanded points of sale and changing product flows can affect company performance in service levels, costs and inventory,” he pointed out.
Other CPG concerns cited in the study included rising freight costs, a decline in service levels and expansion of inventories.