Closing the Supply Chain Planning Capability Gap

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Has it become normal in your organisation to rely on emergency processes, like expediting or airfreighting, rather than the exception? Are your employees struggling to provide consistent customer service, despite full warehouses of stock, or working additional hours? Many businesses today face similar challenges.  

Rising mistrust in systems, use of manual overrides, and continual underperformance of new product launches signal inefficiencies within supply chains. This misalignment often leads to high levels of waste, lost sales, and diminished customer trust. Addressing these challenges requires not only identifying the symptoms but also taking a deeper dive into the root causes of supply chain misalignment. In this article, we focus on ways to identify the root causes of these problems, and how to take a structured approach to resolving them.

Common Indicators of Supply Chain Misalignment

Supply chain misalignment is often evident through symptoms that disrupt business efficiency.  Key signs include:

• Rising use of overtime: Either at DCs or Plants, issues are being resolved with extra unplanned labour

• High levels of write-offs and waste: Inventory planning gaps leading to obsolete or expired stock

• Exceptions becoming the norm: Regular use of more expensive options to meet demand such as air freighting or transferring stock between locations

• Distribution centres (DCs) at capacity with lost sales: DC operations are overwhelmed yet unable to meet demand

• Eroding trust: A lack of confidence from suppliers and customers

• Mistrust in systems: Heavy reliance on human intervention and excessive manual checks  

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Getting to the Root Cause of Supply Chain Misalignment

To truly resolve inefficiencies in supply chain operations, it’s essential to go beyond surface-level issues and identify the root causes. Misalignments can stem from a combination of structural gaps and foundational capability weaknesses, which collectively impact overall performance. By dissecting these core elements, organisations can begin to understand the critical factors holding back their supply chain from optimal functionality.

Foundational Capabilities

1. People: Does your organisation depend heavily on a few key individuals? Not only does this increase operational risk if those individuals are unavailable or leave the organisation, it can impede the organisation’s ability to undertake strategic projects

2. Processes: Are supply chain processes well-defined and followed consistently? Knowledge sharing, documenting of processes and upskilling of the whole team is critical for delivering quality outcomes.

3. Technology: Are current systems and tools fully integrated, and do they streamline key processes to support your supply chain? Relying on outdated or disconnected technologies can prevent seamless planning and execution.

4. Data & Insights: Is your data accurate and timely? Are you spending more time collecting data than analysing it? Without reliable data, supply chain decisions may be based on incorrect assumptions, leading to misaligned strategies.

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Structural Enablers  

1. Organisational Structure: Are roles and responsibilities within your supply chain clearly defined and aligned with your business model? An unbalanced structure can lead to inefficiencies or misalignment of goals and initiatives across the organisation.

2. Governance: How are supply chain decisions made, and are they aligned with the broader business strategy? Effective governance is essential for coordinating activities across the supply chain and ensuring compliance with best practices.  

3. KPIs & Incentives: What behaviours are being driven by your current KPIs and incentive structures? Misaligned KPIs can encourage actions that may benefit short-term performance but harm long-term goals, such as overemphasis on production speed at the cost of quality or customer satisfaction. Are the right performance metrics in place to encourage collaboration, efficiency, and innovation across your supply chain?

A Structured Approach to Supply Chain Planning Improvements

Effective supply chain transformation is rooted in a structured approach, designed to diagnose, design, develop, and deliver the necessary changes.

1. Diagnose

          The first step in any improvement initiative is diagnosing the current state of your supply chain.  Key activities in this phase include:

• Business process discovery

• Issue, inefficiency, and bottleneck identification

• Root cause analysis

• Impact quantification

2. Design

          Once the root causes are identified, the next step is to design tailored solutions that address those gaps. Key activities may include:

• Target state capabilities determination

• Business process and capability roadmap development

• Solution architecture design

• Business case creation

3. Develop

          After designing the necessary improvements, the focus shifts to developing the solution. This involves the hands-on building and testing of new processes, systems, or tools. Key activities in this phase include:

• Solution build and test

• Capability development

• Pilot testing and deployment planning

4. Deliver

          The final phase is delivering the solution across the entire organisation. This requires careful management to ensure that the improvements are fully implemented and deliver the expected results. Key activities to support this phase include:

• Project management and implementation support

• Change management

• Results delivery and value realisation

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Building the Business Case for Change

A robust business case forms the backbone of any successful supply chain transformation. This involves quantifying the expected benefits of improved planning capabilities.

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1. Current Capability Analysis: Evaluate the existing supply chain planning capabilities across people, processes, policies, and technology.

2. Gap Modelling: Compare the organisation’s current capabilities to improved practices, suitable to the organisations size, investment appetite and perceived ROI, identifying the areas with the most potential for improvement.

3. Targeted Business Case: Develop a business case that targets the most critical capability gaps and outlines the expected ROI.

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Typical benefits of improving supply chain planning include:

• Revenue Growth: Increased sales through improved availability and forecasting.

• Cost Reduction: Lower inventory carrying costs and a healthier mix of inventory, reducing waste and obsolescence.

• Operational Efficiency: Better labour utilisation and fewer emergency orders due to enhanced capacity management.

• Optimised Working Capital: Streamlined inventory levels, supported by improved planning processes.

Next steps

Trace Consultants have the flexibility, knowledge, and experience to provide hands-on support across any or all steps in the Supply Chain Planning Improvement process. If your organisation is experiencing any of these symptoms or seeking ways to unlock value in your supply chain, contact the trace. team today.

Optimising FMCG Supply Chain Design: Driving Efficiency and Competitive Advantage

The fast-moving consumer goods (FMCG) sector faces unique supply chain challenges due to high product volumes, rapid turnover rates, and consumer demand for variety and quick delivery. For FMCG organisations, supply chain design is a critical factor in maintaining profitability, staying competitive, and meeting customer expectations.

Effective FMCG supply chains must balance efficiency, cost management, and flexibility while adapting to seasonal variations, shifting consumer preferences, and unpredictable market conditions. Investments in supply chain design—especially in network optimisation, warehouse layout, demand planning, replenishment technology, and integrated planning processes—are key to driving performance improvements across the production and distribution spectrum.

In this article, we will explore the benefits of optimising supply chain design for FMCG organisations, delving into the value of network design, warehouse optimisation, advanced demand planning, and the importance of Sales & Operations Planning (S&OP). Additionally, we will discuss how Trace Consultants can support FMCG companies in Australia and New Zealand to create resilient, agile, and cost-effective supply chains that improve customer satisfaction and profitability.

The Importance of Supply Chain Design for FMCG Companies

The FMCG industry operates on tight margins and high volumes, making supply chain efficiency a critical element of success. A well-designed FMCG supply chain enables companies to respond quickly to market demand, reduce costs, and manage the complexities of short product lifecycles. Supply chain disruptions, bottlenecks, or inefficiencies can have significant impacts on profitability, customer service, and market share.

Supply chain design in the FMCG sector is about ensuring that products are sourced, manufactured, stored, and distributed in the most cost-effective and efficient manner. This requires the careful coordination of manufacturing plants, distribution centres (DCs), and transportation networks to reduce lead times, optimise production cycles, and minimise inventory holding costs.

Key areas for FMCG organisations to focus on in their supply chain design include network optimisation, warehouse layout, demand planning, and S&OP. Each of these elements plays a crucial role in improving operational performance and delivering a more resilient, responsive supply chain.

1. Network Design: Optimising the FMCG Distribution Network

The foundation of an efficient FMCG supply chain is an optimised network design. Network design refers to the strategic positioning of production facilities, distribution centres, and inventory stocking points to ensure that products can be delivered quickly and cost-effectively to customers.

In the FMCG sector, network design must account for several variables, including product shelf life, regional demand, transportation costs, and production capacity. Many FMCG companies operate on a national or global scale, meaning their supply chains need to be both flexible and robust enough to adapt to varying market conditions.

Benefits of network optimisation for FMCG companies include:

• Cost reduction: By positioning DCs and manufacturing plants closer to key markets, FMCG organisations can reduce transportation costs, decrease fuel consumption, and improve sustainability.
• Improved service levels: A well-designed network allows FMCG companies to reduce lead times and improve delivery accuracy, ensuring that products are available when and where customers need them.
• Scalability and agility: An optimised network is flexible enough to respond to market changes, including seasonal demand fluctuations or new product launches, and can quickly adjust to accommodate these shifts.

For instance, a large beverage manufacturer might optimise its supply chain network by strategically placing production plants closer to high-consumption regions to reduce transportation times, minimise product spoilage, and meet customer expectations for quick delivery. This level of planning allows FMCG companies to compete in a fast-paced, demand-driven environment.

2. Warehouse Layout Optimisation: Maximising Throughput and Reducing Costs

Warehouse layout optimisation is particularly critical in FMCG supply chains, where high volumes of goods need to be processed quickly, accurately, and cost-effectively. An optimised warehouse layout ensures that products flow smoothly through the facility, from receiving to storage, order picking, packing, and shipping, reducing lead times and improving overall operational efficiency.

Key components of warehouse layout optimisation for FMCG companies include:

• Maximising storage space: FMCG companies often deal with thousands of SKUs, from raw materials to finished goods. Efficient storage solutions, such as high-density racking, vertical storage systems, and automated storage and retrieval systems (AS/RS), can maximise space utilisation and improve accessibility to high-turnover products.
• Streamlining picking and packing processes: Order picking is one of the most labour-intensive and costly processes in an FMCG warehouse. By optimising the layout—using techniques like zone picking, wave picking, or automated picking technologies—FMCG companies can minimise picking times, reduce errors, and accelerate order processing.
• Efficient product flow: In a high-volume FMCG warehouse, smooth product flow is essential to avoid bottlenecks. An optimised layout ensures that raw materials, work-in-progress goods, and finished products move efficiently through the warehouse, from receiving to outbound shipping.
• Automation: Incorporating automation technologies—such as conveyor belts, robotics, and AGVs—helps FMCG companies handle larger volumes of goods with fewer manual interventions, reducing labour costs and improving throughput.

Example: A large FMCG company might implement an automated storage and retrieval system (AS/RS) in its distribution centre to handle fast-moving consumer goods more efficiently. This system would reduce the time it takes to retrieve and ship products, improve picking accuracy, and allow the company to handle peak periods without increasing labour costs.

Warehouse optimisation not only helps improve throughput but also enhances the ability to manage complex product portfolios and maintain the high service levels demanded by FMCG customers.

3. Demand Planning and Replenishment Technology: Improving Forecast Accuracy and Reducing Waste

Demand planning and replenishment technologies are essential for FMCG companies that need to manage large, diverse product lines with short shelf lives and fluctuating demand. By investing in advanced forecasting tools and replenishment technologies, FMCG companies can better anticipate customer demand, reduce stockouts, and minimise the risk of overproduction or product obsolescence.

Key benefits of demand planning and replenishment technologies in FMCG include:

• Enhanced forecasting accuracy: Modern demand planning tools leverage historical sales data, real-time market trends, and advanced algorithms to predict demand more accurately. This allows FMCG companies to better manage inventory levels, align production schedules, and reduce waste.
• Optimised inventory levels: Accurate demand forecasting reduces the need for excess inventory, freeing up warehouse space and reducing carrying costs. For perishable goods, this is especially important, as it minimises the risk of spoilage or waste.
• Automated replenishment: Replenishment technologies automate the process of reordering stock, ensuring that inventory is always maintained at optimal levels. This reduces manual intervention and helps FMCG companies meet customer demand without stockouts.

For FMCG organisations dealing with seasonal spikes in demand—such as increased sales during holiday periods or promotional campaigns—advanced demand planning tools allow for better anticipation of these peaks, ensuring that the right amount of product is available when needed, without overstocking.

4. Sales and Operations Planning (S&OP): Aligning Manufacturing with Market Demand

Sales and Operations Planning (S&OP) is a critical process for aligning manufacturing operations with market demand. In the FMCG sector, where production cycles must respond quickly to changes in consumer preferences, S&OP helps organisations maintain the delicate balance between supply and demand.

S&OP brings together key stakeholders from across the business—sales, marketing, finance, and supply chain management—to create a unified plan that synchronises production with market forecasts, promotional activities, and sales targets.

Benefits of S&OP for FMCG companies include:

• Improved demand-supply alignment: S&OP helps FMCG organisations match production schedules with customer demand, ensuring that they are not overproducing or underproducing key products.
• Faster decision-making: With cross-functional collaboration, FMCG companies can quickly make informed decisions about product launches, pricing strategies, and promotional campaigns, while keeping supply chain constraints in mind.
• Enhanced agility: S&OP allows FMCG organisations to respond rapidly to market changes—whether it’s an unexpected spike in demand or a disruption in the supply chain—without impacting service levels.

A well-implemented S&OP process helps FMCG companies balance production efficiency with customer responsiveness, ensuring they can meet demand without holding excess inventory or missing out on sales opportunities.

How Trace Consultants Can Help FMCG Organisations in Australia and New Zealand

FMCG organisations in Australia and New Zealand face unique supply chain challenges, from managing large product volumes and navigating regional distribution networks to responding to consumer demand in real time. Trace Consultants is well-positioned to support FMCG companies in optimising their supply chain operations through expert guidance in network design, warehouse layout, demand planning, and S&OP.

Trace Consultants offers a range of services to help FMCG organisations improve supply chain performance:

• Network Optimisation: Trace Consultants helps FMCG companies design efficient, scalable distribution networks that reduce transportation costs, improve delivery speed, and enhance service levels across Australia and New Zealand.
• Warehouse Layout Optimisation: With extensive experience in warehouse design, Trace Consultants can optimise space utilisation, streamline product flow, and implement automation solutions to improve throughput and reduce costs.
• Demand Planning and Replenishment Technologies: Trace Consultants provide advanced forecasting tools and replenishment strategies that help FMCG companies manage inventory more effectively, reduce waste, and meet customer demand with precision.
• S&OP Implementation: Trace Consultants assist FMCG organisations in integrating S&OP processes, ensuring alignment between production schedules and market demand while improving cross-functional collaboration.

With deep expertise in supply chain design, Trace Consultants can help FMCG organisations in Australia and New Zealand build agile, resilient, and efficient supply chains that drive operational excellence and competitive advantage.

For FMCG companies, supply chain design is more than just an operational necessity—it’s a strategic asset that drives efficiency, cost reduction, and customer satisfaction. By investing in network optimisation, warehouse layout design, advanced demand planning, and S&OP processes, FMCG organisations can enhance their ability to meet market demand, reduce operational costs, and stay competitive in a fast-paced, ever-changing industry.

With the support of Trace Consultants, FMCG organisations in Australia and New Zealand can optimise their supply chain operations to navigate the challenges of today’s market, ensuring long-term success and profitability.

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Retail Supply Chain Design: Unlocking Efficiency and Competitive Advantage

In today’s highly competitive retail landscape, supply chain design is a key differentiator for success. Retailers must carefully manage their supply chain infrastructure—from network design and warehouse layout to demand planning and replenishment technologies—to stay competitive, reduce costs, and meet customer expectations. With growing complexity in omnichannel retailing and increasing consumer demands for faster deliveries and personalised experiences, investing in a well-designed supply chain is no longer optional but essential.

Retailers in Australia and New Zealand, like their global counterparts, are feeling the pressure to optimise their supply chains. With fluctuating demand, rising operational costs, and the need for flexibility in fulfilment models, supply chain efficiency is critical for sustaining profitability. This article will explore the benefits of investing in network design, warehouse layout optimisation, demand planning, replenishment technologies, and Sales & Operations Planning (S&OP). We will also discuss how Trace Consultants can support retail organisations in Australia and New Zealand in developing robust, future-proof supply chains.

Why Supply Chain Design is Crucial in Retail

Retailers are navigating a landscape where customer expectations are continually evolving, competition is fierce, and external disruptions—such as supply chain shocks or environmental crises—can significantly impact operations. A well-designed supply chain enables retailers to meet these challenges by ensuring that their distribution networks, warehouses, and inventory systems are optimised for efficiency, flexibility, and resilience.

Supply chain design goes beyond the operational—it's about strategic alignment between business goals and the systems that move products from suppliers to customers. A carefully crafted supply chain can reduce costs, increase speed to market, and allow for agility when responding to shifts in demand or external pressures.

The key areas of focus for any retailer's supply chain design include network design, warehouse layout optimisation, demand planning, and replenishment, along with an integrated Sales & Operations Planning (S&OP) process. Let’s dive deeper into each of these areas and explore their benefits.

1. Retail Network Design: Optimising Distribution for Efficiency

Retail network design focuses on the physical flow of goods from suppliers through distribution centres (DCs) and fulfilment centres to retail stores or directly to consumers. Retailers must make decisions about the location and number of DCs, transportation routes, and where to stock inventory based on customer demand patterns.

Investing in network optimisation offers several benefits:

• Cost reduction: Strategic placement of DCs close to high-demand regions reduces transportation costs, delivery times, and carbon emissions.
• Improved customer service: With products stored closer to customers, retailers can offer faster delivery, boosting customer satisfaction and loyalty.
• Scalability and flexibility: A well-optimised network is flexible enough to scale with growth, accommodate new sales channels (e.g., omnichannel fulfilment), and respond to market shifts or supply chain disruptions.

Retailers adopting an omnichannel approach—where customers interact across online, in-store, and click-and-collect options—require a network design that seamlessly integrates all channels. By investing in network design, retailers ensure they can meet customer expectations, regardless of how or where the customer chooses to shop.

2. Warehouse Layout Optimisation: Enhancing Efficiency and Scalability

Warehousing is the backbone of the retail supply chain. A well-designed warehouse enables smooth, cost-effective operations that ensure products are stored, picked, packed, and shipped efficiently. As retail demand increases in complexity, warehouse design becomes crucial in keeping operations streamlined and scalable.

Warehouse layout optimisation focuses on the physical layout, design, and operational workflows within a warehouse to improve efficiency, reduce waste, and maximise productivity. Here's why investing in warehouse layout optimisation is critical:

• Space utilisation: An optimised warehouse layout maximises the use of available space, ensuring that storage capacity is fully utilised while leaving enough room for efficient product flow and equipment movement. This often involves implementing high-density storage solutions such as vertical racking systems, mezzanines, or automated storage solutions.
• Picking and packing efficiency: Warehouse picking and packing processes are where much of the cost and time are concentrated. Retailers can optimise this through thoughtful layout design—minimising walking time for pickers, implementing zone picking (where pickers focus on one section of the warehouse), or using automation such as robotic picking systems.
• Product placement: In an optimised warehouse, products are stored based on their velocity (sales rate). Fast-moving items are placed closer to the picking stations, reducing travel time and speeding up order fulfilment. Seasonal or high-turnover products are often placed in prime locations, while slower-moving items can be stored further back.
• Scalability: A well-designed warehouse layout allows for future growth. Retailers should consider their long-term storage needs, making room for additional stock or new product lines without having to invest in costly expansions or redesigns.
• Automation and technology: Automation plays a critical role in modern warehouse operations. Technologies such as automated guided vehicles (AGVs), automated storage and retrieval systems (AS/RS), and robotics can enhance picking and packing efficiency, reduce labour costs, and improve accuracy.

Example: A large e-commerce retailer might optimise its warehouse by using a combination of vertical storage systems and conveyor belts to reduce the time it takes to move products from storage to shipping areas. By introducing automation into their layout, the retailer can handle a higher volume of orders with fewer staff, cutting operational costs and improving throughput.

An optimised warehouse layout not only reduces costs but also improves the ability to meet customer demand more quickly and accurately. In retail, where speed to market is critical, a well-designed warehouse can provide a significant competitive advantage.

3. Demand Planning and Replenishment Technology: Ensuring Stock Availability

Demand planning and replenishment are crucial for maintaining the delicate balance between too much and too little inventory. Retailers need accurate demand forecasts to ensure that stock levels align with customer demand while avoiding costly overstocks or stockouts.

Advanced demand planning and replenishment technologies provide retailers with the tools to automate and optimise these processes. These technologies leverage data analytics, machine learning, and real-time market insights to predict future demand, allowing retailers to adjust inventory levels accordingly.

Benefits of investing in demand planning and replenishment technologies include:

• Increased forecasting accuracy: Modern demand planning tools incorporate factors such as sales history, seasonality, and market trends to produce more accurate forecasts. Machine learning algorithms continually improve these forecasts based on new data.
• Inventory optimisation: With more accurate forecasts, retailers can reduce excess stock while ensuring that popular items remain available. This reduces carrying costs and improves cash flow.
• Automated replenishment: Replenishment technologies automatically reorder products when inventory falls below a set threshold, minimising manual effort and ensuring consistent stock availability.

For omnichannel retailers, integrating demand planning with inventory management systems ensures that stock levels are coordinated across all channels—whether in-store, online, or in fulfilment centres. This enables retailers to provide a seamless shopping experience and avoid stockouts, especially during peak shopping periods or promotional events.

4. Sales and Operations Planning (S&OP): Aligning Supply with Demand

Sales and Operations Planning (S&OP) is a key process for aligning a retailer's supply chain activities with its overall business objectives. S&OP involves cross-functional collaboration between sales, marketing, finance, and supply chain teams to create an integrated plan that balances demand forecasts with supply capabilities.

Investing in S&OP processes enables retailers to synchronise their operations with real-time demand, improving decision-making and allowing the business to be more agile in responding to market changes.

Benefits of S&OP for retail organisations include:

• Improved alignment: S&OP ensures that demand forecasts are aligned with supply chain activities, helping to avoid overproduction or underproduction.
• Faster response to market changes: Retailers can quickly adjust their plans based on shifts in demand, new product launches, or promotional campaigns.
• Better decision-making: S&OP provides a structured process for evaluating trade-offs between different business functions, ensuring that supply chain decisions are aligned with financial and customer service goals.

By integrating S&OP into their supply chain strategy, retailers in Australia and New Zealand can improve the accuracy of their demand forecasts and better allocate resources to meet both short-term and long-term goals.

How Trace Consultants Can Help Retail Organisations in Australia and New Zealand

For retailers in Australia and New Zealand, developing a robust, efficient, and future-proof supply chain requires expert guidance. Trace Consultants has extensive experience in helping retail organisations optimise their supply chains through advanced strategies in network design, warehouse optimisation, demand planning, and S&OP.

Trace Consultants provides a range of services tailored to the unique needs of the retail industry, including:

• Retail Network Optimisation: Trace Consultants can assist retailers in strategically designing their distribution networks, ensuring that products are stored and delivered efficiently to meet customer demand while minimising costs.
• Warehouse Layout Optimisation: With expertise in warehouse design, Trace helps retailers optimise space utilisation, streamline picking and packing processes, and implement automation to drive operational efficiency and scalability.
• Demand Planning and Replenishment Solutions: Trace Consultants offer advanced tools and technologies to help retailers improve forecasting accuracy, optimise inventory levels, and automate replenishment to ensure stock availability across all channels.
• S&OP Integration: By implementing S&OP processes, Trace helps retailers align their supply chain operations with broader business objectives, enabling faster decision-making and improved demand-supply synchronisation.

Through their in-depth knowledge and proven track record, Trace Consultants empowers retail organisations to enhance their supply chain performance, reduce operational costs, and deliver a superior customer experience.

In today’s dynamic retail environment, supply chain design is crucial for maintaining competitiveness and profitability. Retailers who invest in optimising their network design, warehouse layout, demand planning, and S&OP processes will be better positioned to meet customer demands, reduce costs, and drive long-term growth.

By partnering with experts like Trace Consultants, retailers in Australia and New Zealand can ensure that their supply chains are built to withstand market fluctuations, embrace technological advancements, and remain agile in the face of future challenges.

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