The explosion in disposable income among the middle class has converted emerging markets into a goldmine of business opportunities for many global brands. However, more opportunity translates into more competition and other challenges at a micro-level, one of them being the lack of supply chain visibility.
What is Supply Chain Visibility, and Why is it Important?
Visibility into the existing supply chain system offers an end-to-end real-time view of the company’s logistics, inventory, warehouse, and distribution networks.
The traditional model of retail distribution in emerging markets, not initially disrupted by new-age technology, is increasingly facing competition from tech-driven direct-to-consumer models. In addition, online-only stores are fiercely competing with the traditional supply chain network to align with changing customer preferences. Hence, survival has become challenging for businesses that were too slow to predict and adapt to the change.
This is why real-time supply chain visibility is so important.
In this article, we will explore the various supply chain network complexities persisting in emerging markets regarding the beverage industry. Also, we will identify different ways supply chain visibility can help address those challenges.
How Absence of Supply Chain Visibility Adversely Affects Production Planning & Growth
The global beverage market, both alcoholic and non-alcoholic, is estimated to reach USD 1.8 trillion by 2024. Since 2017 the Asia Pacific has gradually emerged as one of the largest global markets for spirits, closely followed by Brazil, the Middle East, and North Africa. Experts believe the next leg of growth for beverage companies will come from emerging markets.
However, the changing customer preferences, idiosyncrasies of local culture and practices, disconnected logistics, and absence of supply chain visibility give rise to the new set of challenges that global beverage companies were unprepared for.
Here, we will touch on the challenges in beverage distribution:
No collaboration; poor production planning
Most business is done through personal relationships and back-of-the-envelope calculations in an emerging market. Hence, most distributors fail to provide real-time data on their sales/stocks. When many breweries/factories and multiple distributors were thrown in the mix, the existing problems for businesses compounded. And new challenges cropped up. Poor supply chain visibility makes timely and consistent viewing of inventory and secondary sales information a challenging task for the entire supply chain. Hence, making informed decisions is impossible, resulting in sub-optimal replenishments, stock-outs, and inefficient production planning.
Low tech maturity; poor sales visibility
Low tech maturity in emerging markets is a major concern for global companies. The paper-pen approach to conducting day-to-day business, emails for closures, and spreadsheets for reports create a huge technological gap between the center and its subsidiaries.
Poor supply chain visibility, absence of structured mechanisms for collecting and processing data, and manual processes present contaminated data, poor sales visibility, and incorrect future predictions.
Lack of data; no wider market reach
Developing markets mostly have distributors concentrated only in urban areas. Poor logistics and poor supply chain visibility in rural markets restrict wider market reach for beverage companies. Hence, proper planning of promotions and discounts and communicating the same to all vendors across the market remain a distant dream.
In the absence of a robust platform for small retailers to proactively place orders and distributors to communicate effectively with their customers, the overall market reach for any beverage company will automatically shrink.
Lack of consumer data; poor effective promotion
In-store purchases form nearly 70% of all buying decisions, and most are done on an impulse by the consumer. Hence, a traditional distributor-driven retail model with little or no influence on the consumers’ buying decisions rarely provides valid, actionable data.
Promotion planning and execution remain ineffective without considering stock availability, customer purchase pattern, and other related insights. Hence, possibilities of cross-sell/up-sell remain outside the planning process.
How Supply Chain Visibility is the Best Way Out?
Only technology can bring manufacturers, distributors, retailers, suppliers, and other stakeholders on the same platform. This will not only help the concerned parties gain more visibility into the supply chain network, but it will also help them make crucial data-driven decisions and forecast future sales effectively.
This vision is achievable following a collaborative and inclusive ecosystem connecting every stakeholder across the supply chain. Let’s elucidate:
Distributor collaboration using data
A collaborative data exchange platform connecting all distributors enables easy data exchange between parties. However, one should consider the following points while setting up a logistics visibility platform:
Retailer outreach via value creation
Building an all-inclusive distributor-retailer connected platform translates store sales data into insight-driven refills. This creates an ecosystem where retailers receive best-in-class distribution services.
To ensure the complete success of this platform, the following features should be considered:
The Best Way Forward
Getting your supply chain ecosystem digitized will increase the supply chain and distribution ecosystem’s visibility and help you make profitable decisions at every step. TradeEdge is user-friendly and easily matches up to varying requisites of businesses.
Benefits of Supply Chain Visibility Software:
Data is paramount in gaining a competitive advantage in the emerging market. However, a lack of supply chain visibility and low-tech maturity impair businesses from capturing insights and making data-driven decisions. Hence, increased visibility via AI-based supply chain management can help businesses easily optimize production, improve distribution, and increase sales.