6 Qualities of a Competitive CPG Supply Chain

Sharon Hayford

By Sharon Hayford, Content Writer

Last Updated April 22, 2025

7 min read

In this article, learn about:

  • The qualities of a competitive supply chain

  • How CPGs can keep pace with the changing industry

  • The benefits of outsourcing to third parties

_____________________________________________________________________________________________

The Consumer Packaged Goods (CPG) industry is rapidly evolving, especially given the following factors: 

  • Growing trade restrictions

  • Economic crises

  • Acute downturns in several large countries

  • Pandemic concerns

  • Environmental changes

  • A new generation of digitally affiliated customers

Even big manufacturers keen on capturing a secure position in the industry are broadening their scope. CPGs are reshaping their supply chain operations, capitalizing on contemporary technology, creating cutting-edge designs, and scaling up customer satisfaction. The industry is also experiencing a giant swell of small businesses occupying the market.

To be competitive, CPGs must increase profits by employing new strategies, like producing greater quantitiesraising prices, or reducing costs. Leading corporations are handling the industry's unconventional shifts and intensely competitive environment. These companies strike a balance between the need to invest in emerging technologies and exercising caution in investment strategies.

What are the Qualities of a Competitive Supply Chain?

CPGs of all sizes need a competitive supply chain. These six strategies can help increase this growth.

Supply Chain Digitalization

Smart customers know what they want and consistently look for fast, easy, and seamless online shopping services with a rewarding experience. Product reviews and ratings from other shoppers are transparent and easily accessible via social networking, apps, Google, and other search engines. Consumers can use these features to compare the prices and quality of commodities and services. They can view all that the market has to offer and make the best buying decisions. 

In order to account for this large-scale digitization of the supply chain, CPGs need a powerful demand management plan to mitigate delivery costs and out-of-stock challenges. The resulting strategy provides a uniformly holistic experience for shoppers. A comprehensive demand plan requires intensive exploration, analysis, and strategic investment in customer-driven technologies. 

A demand plan begins with Demand Forecasting and a Supply Plan. Demand Forecasting examines historical data to determine what the future will look like for various products. A Supply Plan relates to manufacturing and warehousing and helps determine how much product to create and store. Combining Demand Forecasting and a Supply Plan, as well as any potential data variables, gives CPGs a Demand Plan to predict spikes and dips in demand.

Related Reading: What is a Supply Plan?

Consumer Globalization

Nations such as China, India, and Indonesia have scaled up their economies and contributed substantially to the global economy in the previous decade. The market will witness a new upsurge of customers from this continent. With the rise of middle-class purchasing power, this growth will hopefully reach new horizons.

Understanding this new customer base will be quite a task for leading CPG players, especially those in Western countries. To be competitive, CPGs will need to focus on discovering the effect of this new demand on their trade and exploring ways to maximize its benefits. 

This will require a high level of adaptability on the part of CPGs, to make sure that they are accounting for sudden shifts that can happen on a larger scale due to the global nature of the industry. Flexibility and a plan to adapt are paramount to maintaining a competitive edge in the era of consumer globalization. CPGs must adapt quickly to changing market conditions to stay ahead of the competition.

Omnichannel Supply Routes

CPGs benefit from developing a consistent omnichannel shopping experience to meet rising consumer demands. Consumers find it convenient to purchase products both via online shopping and physical retail outlets. To ensure that both processes are accessible and operational, CPG firms should review their omnichannel supply routes.

For omnichannel best practices, consistency across all platforms is essential to ensure the customer experience remains unparalleled, whether shopping on a smartphone, in-store, or through an app.

Sustainable Products and Processes

Consumers are increasingly inclined towards environment-friendly, organic, and animal-friendly products. The looming threat of climate change and the increasing consciousness of more viable, zero-emission processes affect consumer buying behavior. The food and beverage industry, in particular, faces significant challenges due to supply chain disruptions, which can severely impact crop yields and product availability.

Long-lasting provisions are now becoming a fundamental aspect of the global supply chain. Recyclable and reusable products are benchmarks for brands and their standing in society. Environmentally friendly packaging and responsible manufacturing processes are now essential for CPG businesses. Sustainable consumer buying behavior encourages CPGs to manufacture locally and reduce waste and imports.

Powering CPGs with Data

Big data is an unavoidable necessity in the CPG supply chain. Companies have vast quantities of data that can be used to drive innovation, and analyzing that data facilitates dynamic decisions by analyzing historic data and forecasting future prospects. Big data helps CPGs gauge consumers’ choices, market developments, and supply chain pain points.

The primary types of data CPGs should leverage are:

  • Observational data

  • Activity data

  • Sales data

Additionally, syndicated data gathers data from:

  • Point-of-Sale (POS) to help analyze retail performance

  • Panel to gain consumer habit insights

  • Product to analyze inventory

All of the above data is useful for monitoring stock, forecasting sales, and evaluating product placement and performance.

It is also imperative that CPGs find ways to better streamline their data analysis and the way they communicate the results across the entire supply chain. This will foster a collaborative and transparent relationship with suppliers, which will in turn create a greater level of efficiency and a competitive edge for CPGs. Integration of data analysis with supply chain capabilities is crucial to ensure seamless operations and responsiveness to market demands.

Related Reading:Visibility for Suppliers and CPGs

AI, Automation, and Robotics

The use of Artificial Intelligence (AI), combined with big data, is increasing worldwide for logistics companies and supply chain management. AI can increase the efficacy of pivotal operations like:

  • Planning and decision-making

  • Determining buying behavior

  • Automating exhaustive warehousing operations

  • Inventory management

AI and its counterpart, machine learning, use various algorithms to analyze data. These algorithms improve data quality and track down problems. Additionally, robotics is a rising star for CPGs to accelerate time-consuming work. Global supply chains already use robotics to monitor, pinpoint, and drive warehouse inventory. 

CPGs can bring an innovative mindset to their strategy by utilizing AI to maximize efficiency and analyze data to gain a competitive edge on the market.

The Benefits of Outsourcing in the CPG Industry

To enhance business, CPGs must regularly close gaps in their analysis, evaluation, and processes. Outsourcing can be an excellent resource for CPGs, as third-party partners know their clients' difficulties. These third parties use technology-backed services to provide substantial business value, operations, and domain expertise. 

The benefits of outsourcing are:

  • Brainstorming and identifying a strategy to resolve issues

  • Formulating shared services models around multiple locations

  • Managing complex changes

  • Guaranteeing high shipping quality regardless of complications

  • Offering an assorted labor force with capabilities that add value to the client’s core requirements

Related Reading: Holding 3rd Parties Accountable for OTIF Fines

How Competitive Supply Chains Can Keep Pace

As CPG companies take stock of their supply chain and make necessary adjustments, the benefits are as follows:

  • Developing a supplier relationship management strategy

  • Pushing innovation strategies toward a successful supply chain, such as utilizing technology 

  • Concentrating on portable manufacturing

  • Building a reserve of staff for unexpected business outcomes

  • Creating internal and external alliances on the business front

  • Synchronizing marketing strategy with supply chain

  • Putting deliveries, logistics, and asset management first

  • Making processes agile, flexible, integrated, transparent, and in harmony with competition

  • Making product life cycles shorter

CPGs should always look at data to create and maintain a competitive supply chain. SupplyPike’s software helps CPG suppliers dispute deductions and create better processes of working with CPGs for the future. With SupplyPike, suppliers can dispute deductions without having to go through retail portals, saving valuable time and energy with auto disputes.

Start your trial today!

Continue Learning with SupplierWiki

For more free educational content like this (eBooks, Cheat Sheets, Webinars, and Articles),sign up for our newsletter, or visit our website. We cover material essential for retail suppliers, especially related to revenue loss at Walmart, Amazon, CVS, Walgreens, Target, Kroger, Lowe's, and Home Depot.

Related Resources