Supply Chain Management and Planning

By Joshua Weatherwax

6 min read

June 28, 2022

Other than inflation, supply chain issues are one of the most talked about subjects in business news today. But, supply chain management isn’t the easiest thing to do.

When you run a small CPG company, this may seem like something beyond your scope. But, it’s important to understand the factors that affect your business. If you aren’t effectively managing your supply chain, you may end up not being able to fulfill your obligations.

Keep reading to learn the basics of supply chain management and planning, see some issues you may face, and get a few best practices.

What Is Supply Chain Management?

Supply chain management (SCM) is the control over the flow of goods from raw materials to final, salable goods. Each member along the chain aims to streamline their processes and better position themselves to move the goods along quickly and efficiently. Managed well, a supply chain can adjust to shifts in consumer demand, inflation, global events, and more.

What Is Supply Chain Planning?

Supply chain planning is focused on planning specifically for the creation and deployment of your own goods. This means it’s much more business-specific than supply chain management. For a small CPG business, that means planning for the materials you receive and the distribution you need. Anything beyond that scale is less important.

Supply Chain Issues

Unfortunately, the past few years have been rife with supply chain issues. From COVID-19 lockdowns causing a lack of manpower to increasing costs for shipping to a ship blocking the Suez, it was a complicated year. Unfortunately, each of these problems causes a cascading effect throughout the supply chain known as the bullwhip effect.

Download our free Supply Chain Management eBook

Supply Chain Management Best Practices

Supply chain management can seem like a behemoth you’ll never be able to tame. But, with proper planning and a solid understanding of how the supply chain operates, you can better take control. Some techniques require a budget but some don’t. Start with the areas you know you can handle, then move on to the others as your business grows. The larger your business becomes, the more important supply chain management.

With that in mind, here are some best practices for supply chain management:

Perform Demand Planning

Demand planning is the process of forecasting the demand for your products and producing the correct amount to meet this demand. This is a vital step for any CPG brand to undertake to avoid running into issues with too little or too much supply. This will help you maintain your margins and avoid missing out on sales or losing money in dead stock. It also has a major impact on the other businesses in your supply chain. If you don’t have the correct amount of stock, you may cause a bullwhip effect where your suppliers and retailers suffer losses as well. You need to use data to understand sales trends and consumer preferences to plan your supply accordingly.

Track Inventory Levels

Unsurprisingly, one of the keys to success for a CPG business is to keep track of the inventory. But, this isn’t just for your own sake. Tracking your inventory levels lets you react in real-time to shifts in demand or issues with the supply chain. If there’s a sudden spike in demand, you don’t want to be surprised to discover you can’t actually fill the orders as you expected. Keeping track of your supplies will also let you maximize the impact of retail data.

Maintain Strong Relationships

One of the most important tools to combat supply chain issues is information. But, you’re not going to be getting that information if you don’t have good communication with your suppliers and retailers. You should work to build a strong relationship with every business you work with and share information whenever possible. This will be paid in kind and can often let you react quicker than your competition when an issue is looming on the horizon.

Utilize Technology

As a small business, it’s often hard to set aside a budget for technology. But, using automated systems and retail data platforms are great ways to streamline your supply chain. Automated supply chain management involves using digital technology to track inventory levels, forecast demand, and quickly allocate products to certain retailers or markets. Pair this with POS and panel data from a supplier like NielsenIQ. That way, you can act and react faster and more intelligently than the competition.

Avoid Unnecessary Waste

This one might seem surprising, but it’s actually very helpful. Avoiding waste in the form of damaged or lost inventory, wasted energy, and even excess packaging can help streamline your supply chain. The more you maximize the usage of every product or investment, the less likely you are to cause problems along the supply chain. A focus on sustainability can help you avoid losses and increase your ability to meet demand when and where it arises.

Use Analytics to Battle Supply Chain Issues

The easiest way to avoid running into overwhelming supply chain issues is to invest in data. But, having tons of data is only helpful if you can analyze it, digest it, and turn it into actionable goals.

Fortunately, with Byzzer’s reporting solutions, you can have all the data you need at your fingertips. Byzzer provides breakdowns of product and category attributes in easy-to-digest reports. Best of all, we’ll show you how to leverage this information for your action plan.

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