It’s Tough Being the Little Guy

Collaboration between retailers and suppliers is widely touted as being the key to reducing inventory and cost in CPG logistics.

But according to research by Auburn University, small to mid-sized CPG manufacturers have a tough time getting the attention of large retailers.  Download the research report: Key Supply Chain Challenges of Mid-Sized CPG Companies.

Here are some representative comments from discussions with 110 supply chain professionals surveyed:

• “Each one (retailer) is trying to be the leader and has different rules.”
• “There is a lack of receptiveness…they are distant and unwilling to hear our concerns and ideas.”
• “Retailers are trying to shrink their inventory and that pushes some of the labor back on us and makes transportation inefficient.”

The research results on CPG logistics suggest that, relative to large consumer goods suppliers, small and mid-sized companies do not have frequent, extensive communication with retailers.  They feel the relationships are more focused on “Compliance” than “Collaboration,” suggesting more of a one-way dialogue.

In addition, smaller firms indicate that retailers often change service requirements without regard for the cost implications for the supplier.

What’s been your experience?