Supply Chain

What is the supply chain?

In the FMCG world, the supply chain is the industrial and logistics process that allows the product to be made available to the shopper.

The three fundamental phases of an efficient supply chain are:

  • Sourcing: the raw materials necessary to manufacture the product can be manufactured, cultivated, harvested, or even bred or fished in the case of meat or seafood. All the rest of the supply chain is based on this phase, and this is why a bad harvest in Africa can have consequences on European shelves.
  • Manufacturing: once the raw materials are available then comes the industrial phase of manufacturing. It is ever more frequently an international process with factories supplying several countries at regional or even global level.
  • Distribution: this purely logistical phase is generally divided into three sub-processes
    • Distribution by the manufacturer to the logistics platforms of the super or hypermarket chains
    • Delivery to stores by the retailer
    • Shelf replenishment by the store teams

A perfect control of each phase and above all the communication of sales information in real time allows the manufacturing and transport processes to adjust to demand and stocks.

This way they are more efficient, faster, and cheaper with a direct impact on the satisfaction of the distributor, the consumer, and the categories’ profitability. The supply chain is the key element of the concept of On Shelf Availability / OSA.

The understanding and control of efficient promotion and efficient assortment processes based on sell-out data per store allows accurate sales forecasts, a fundamental point for an efficient supply chain.

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