A Note From Our CEO: Why Logistics and Production Matter
I’ve been giving a great deal of thought about what it takes to move a CPG company forward. After all, it’s part of my day job. An obvious answer to increasing business is having the right people on your sales & marketing teams. Successful sales are a key driver to a retailer and brand’s bottom line. However, those sales are put at risk when logistical processes and production facilities fall short and even worse, are not fail-safe. Many of us don’t think about what it takes to produce, store, ship, and shelve products. We leave that to the people who are working behind the scene who ensure everything from ingredients to shipping labels are seamlessly processed according to plan. Logistics and production play a vital role for virtually every industry, municipality, and organization. People really don’t care who’s running the power grid until the lights go out in their businesses, schools, and homes.
Every week I sit in on top-to-top calls with retailers and manufacturers. Lately, most of the core items on the agenda have centered around supply chains and logistics. Listening in on the calls is like going back 20 years ago when the CPG market became increasingly competitive. Back then, a number of retailers and manufacturers were looking for ways to cut costs because the competition was reducing their margins. Many took the easy route: they outsourced production or kept the plants running until the machinery finally wore out. Smaller companies eventually were bought up or squeezed out because they couldn’t afford to invest in production plants, warehousing, and logistics like Kraft, General Mills, and other big CPG players.
Then and now, the companies who have the right logistics and infrastructure in place and continue to invest in the future even when margins are lean, are advancing beyond companies who have not invested. Smart retailers are automating their warehouse systems so they’re more accurate, quicker, and more reliable over the long term. Manufacturers of every size are realizing that a new and more automated line process can increase their bottom lines and ultimately supply the investment capital necessary to build their brand.
In all my years of being in this business, I cannot remember a time when workers behind the scenes and those making the “watch runs” received so much attention. I won’t name names, but there are plant managers at several Fortune 500 manufacturing companies who are regarded as more valuable than the CEOs and have better compensation packages to prove it.
In the competitive world of business, everyone and everything matters. A supply chain with the right combination of automation and human oversight wins the day when filling orders and shipping happens right on time. Customer service teams who build loyalty are true heroes when they uncover problems, address them, and become the solution. Organizations win by investing in people, systems, and infrastructure. It all boils down to thinking behind the scenes and moving the company’s future forward.
Thanks to all the clients, retailers and people who make great things at Alliance possible.