Supply chain collaboration is a critical area of focus for many retailers. Before collaboration efforts can be made, key players must first understand the difference between key industry segments. The retail and consumer packaged goods segments are most often confused because of their similarities, but in reality are quite different. Retail is defined as the sale of products to end consumers. This is typically done through a variety of retail channels including brick and mortar stores, e-commerce sites, phone sales and print catalogs. Consumer packaged goods (CPG) is a more broad category encompassing all manufacturers, sellers and marketers of physical goods that are sold through retailers. CPGs often operate at the wholesale level rather than the direct-to-consumer (D2C) level. While these businesses have very similar end goals, they often do not work closely together. In a 2015 article industry experts noted that by working together retailers and CPG manufacturers could benefit from increased sales, cost savings, optimized processes and systems and a more positive customer experience. A strategic collaboration plan can help these businesses to more easily obtain these common objectives.

Before a strategy can be developed, these key players must also look at the challenges or roadblocks they expect to encounter. Some of the top challenges encountered by the CPG industry include: variable consumer demand and the ability to adapt, shrinking profit margins due to increased competition, increase regulatory requirements, data visibility across global supply chains and the management of complex omni-channel retail strategies. Due to the proximity of these supply chain segments, retailers are often affected by these challenges downstream, but by working together to develop new and innovative products and processes both retail supply chain operations can benefit. Much of this innovation will come from improved analytics derived from WMS technology investment which is expected to increase through 2018. Learn more about how tech investment and supply chain innovation will improve collaboration efforts between consumer packaged goods manufacturers and retailers by contacting Datex experts today at marketing@datexcorp.com or 800-933-2839 ext 243 or www.datexcorp.com.

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