Fast-moving consumer goods (FMCG) — food, beverages, toiletries, over-the-counter drugs, and other packaged goods — are indispensable short-shelf-life products that directly impact our daily standard of living. In Singapore’s dynamic and diverse economy, the FMCG sector is crucial in driving significant economic activity and stabilising the supply of essential products. Coupled with the growing consumer awareness of ethically sourced products, businesses are placing greater emphasis on supply chain transparency, ensuring that their offerings align with evolving consumer values. Consequently, improving efficiency through logistics services has become vital for suppliers and retailers to meet these demands. This article will explore how logistics companies in this sector, such as FairPrice Group Supply Chain (FPGSC) contribute to this process, highlighting how supply chain solutions like Vendor Managed Inventory (VMI) can help distributors and wholesalers drive logistics efficiency.
A Brief Overview of Vendor Managed Inventory
VMI is a supply chain management approach in which the supplier assumes responsibility for managing and replenishing inventory at the customer’s site. In this setup, the supplier accesses the customer’s inventory data to monitor stock levels and forecast demand effectively, making decisions on behalf of the retailer regarding inventory replenishment.
1. Temperature-Controlled Storage and Transportation
In the FMCG sector, maintaining the right temperature for perishable goods is crucial. Effective temperature-controlled logistics prevent spoilage, reduce wastage, and prolong shelf life, ensuring product freshness from the point of origin to the retailer’s shelves.
VMI enhances this process by providing suppliers with real-time access to inventory levels at the customer’s location. This transparency enables suppliers to accurately determine the optimal quantity of temperature-sensitive products needed at the customer’s facility based on actual demands and usage patterns. The key is to mitigate the risk of both stockouts and overstocking.
2. Regulatory Compliance and Quality Control
Compliance with food safety regulations and strict quality control ensures that products in the FMCG sector meet the necessary standards. This prevents contamination and the spread of foodborne illnesses, protecting consumers from potential health hazards. This, in turn, contributes to consumer trust and loyalty, promoting a positive business image. Logistics companies in Singapore support this compliance through temperature-controlled storage, accurate inventory record-keeping, proper handling processes, and efficient delivery.
VMI further improves quality control and regulatory compliance in food logistics by enabling suppliers to address any emerging issues promptly, based on data gathered through VMI — such as inventory levels, storage temperatures, and transportation conditions. For example, if the system notices a temperature increase in storage, it alerts the supplier to fix the issue, either by adjusting the settings or finding a new storage solution to prevent spoilage.
3. Last-Mile Delivery Optimisation
In a VMI system, the supplier is responsible for managing inventory levels at the retailer’s location. This responsibility extends to the final step in the logistics chain, known as last-mile delivery, where goods are transported from the supplier’s distribution centre or a local warehouse directly to the retail store. By leveraging VMI, suppliers can better anticipate demand, ensuring timely and optimised last-mile deliveries. This reduces stockouts and improves the overall customer experience by enhancing delivery speed and accuracy.
Through VMI, suppliers gain comprehensive visibility into inventory data and delivery requirements. This insight facilitates better coordination between suppliers and retailers through shared data and communication. With real-time access to inventory data and environmental conditions at the retailer’s facility, suppliers can plan logistics services more effectively, scheduling deliveries and adjusting transportation routes to minimise the risk of temperature fluctuations that could compromise product quality.
The competitive FMCG sector should leverage advanced logistics services to streamline their supply chains and enhance operational efficiency. When combined with VMI, FMCG businesses can ensure the consistent delivery of high-quality products to meet dynamic market demands.
FairPrice Group Supply Chain (FPGSC) stands as a leading 3PL provider in Singapore. With extensive multi-temperature storage capabilities and strategically located establishments, FPGSC is well-positioned to support FMCG suppliers. The launch of FPGSC’s Sunview Fresh Food Distribution Centre further enhances these benefits.
This gives FPGSC superior control over inventory management, allowing for more accurate tracking and handling of inventory to reduce discrepancies and improve stock availability. When integrated with the Vendor Managed Inventory (VMI) model, accurate, up-to-date information can be obtained to ensure a clear view of stock levels. This integration fosters a more responsive and efficient supply chain, supporting efficient replenishment and stock maintenance.
