Unleashing the Power of Next-Gen CPFR to Synchronize Inventory With Consumer Demand

Supply chain collaboration has been used so often in the CPG space that it has practically become a buzzword. However, there’s a significant misconception around synchronization. Is there true collaboration happening in which all members of supply chain teams, including partner retailers and merchandisers, can coordinate to meet on aligned objectives, grow a specific category, and respond to quality forecasts?Orchestration through a foundational trio of people, process, and technology is key. This chat with Jorge Risquez, co-founder and CEO of supply chain platform bops, breaks down barriers to true collaboration, sharing best practices for achieving end-to-end inventory synchronization that can keep up with quickly shifting consumer demand. In his role, Risquez helps CPGs synchronize consumer demand with the inventory flow all the way from the retailer shelf, digital or physical, to the manufacturers and their facilities and distribution centers. Throughout his career, he has identified gaps in inventory optimization, creating the company to bring supply chain collaboration to life.Within the people aspect of operations, Risquez said he is starting to see retailers coming together with the buyers and the supply chain, enabling teams from the retailer side to work with CPGs in mind.In the past, some retailers have shared data depending on their digital maturity level; however, collaboration around those insights with CPGs has been difficult to achieve. Risquez said there has been a lack of protocols or templates to drive the flow of intelligence, and supply chain practitioners are not aligned or have no visibility on the commercial objectives set up by retailers. Now, increased visibility and collaboration between retailers and CPGs means companies have the products consumers want (whether in-person or online) and they’re not coming from waste or damaged products as a result of spoilage and overstocks. The first step toward that collaboration is to first address the consumer need, he said. Second is more actionability from retailer data. While CPGs are gaining access to shopper behavior and customer perfection insights, they are starting to demand more actionability from retail partners as data costs come down. Third is jumping on retail media opportunities to better capitalize on retailer data and address consumer needs.As an example of a company reaping rewards from supply chain collaboration, Risquez referenced a CPG manufacturer that believed their product was at the shelf when it really wasn’t. In order to identify the gap, the company began ingesting retailer data, using algorithms to identify sales trends and create forecast alerts for a particular store where the item was not selling as it should. After finding that the inventory in the back and at the shelf were non-existent, the company began feeding the alerts to merchandisers to get ahead of stock-outs and increase sales.Paired with retail media, companies can better pinpoint discontinuation and markdown strategies, pushing advertising to areas where there is excess inventory and consumer affinity to drive sales acceleration. True collaboration involves having not just connected retailers and supply chain teams, but also connected inventory and connected demand. This is what Risquez calls “the Holy Grail.” Using what is happening at the retail store in daily increments through demand feed signals to distribution centers can help CPGs better address orders received and at the same time help retailers achieve better product availability from suppliers. The industry is still in the early days of retail data monetization and collaborative gateways. The future lies in B-to-B portals with cross-company collaboration so team members can respond to forecasts, jump on promotions, and assess risk to improve allocations, said Risquez. For CPGs looking to optimize their supply chain operations, particularly around inventory, Risquez recommends reducing waste and creating new efficiencies through true collaboration with retailers. Organizations need to focus on processes first and then technology will come after.

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