Keeping FMCGs on the Move

The fast-moving consumer goods (FMCG) sector has expanded exponentially in recent years. According to leading market researcher Fortune Business Insights, the global FMCG logistics market size reached $105.85 billion in 2021 and is expected to grow to $131.54 billion by 2028.

FMCGs are consumer-packaged goods produced on a mass scale with a short shelf life and a fast turnover rate, and include products such as packaged food, toiletries, medicines, and cleaning products. Some FMCGs are highly perishable, such as meat, dairy, fruits, and vegetables, while others are subject to seasonal demand and store discounts.

But no matter the goods involved, the FMCG supply chain is potentially vulnerable to the slightest market fluctuation and must be nimble enough to adapt whilst keeping overheads down. With geopolitical uncertainty, there’s a growing trend of near sourcing to shorten the supply chain to ensure fast turnaround for product delivery and rapid response to customers’ needs.

The COVID-19 pandemic had a direct impact on the rapid development of global e-commerce, testing the ability of warehousing services and infrastructure capabilities to adapt to keep pace. Some of the changes have become permanent consumer habits, particularly demand for last-mile and next day delivery services for online shopping. Competition has ramped up significantly.

Logistics and warehousing hubs that successfully implemented digital and integrated solutions for their supply chain management services rose to the challenge presented by the pandemic and have set a new standard not just for what is possible, but what is necessary to compete. These included Singapore, ranked by the World Bank as Asia’s top logistics hub for the tenth year in a row, and the Middle East which emerged as a leading emerging market for contract logistics and warehousing.

For both, and for all other logistics hubs working to compete, a common theme remains— global supply chains require flexible, modern and competitive fulfillment centres to match consumer behaviour.

Leading by Example

GAC is a pioneer of contract logistics services in the Middle East. It opened its first distribution centre in Dubai in 1993 and its GAC Logistics Park in Jebel Ali Free Zone remains a jewel in its crown as one of the region’s largest and most advanced centres.

Today, the company boasts world-class warehousing and distribution capabilities throughout the Middle East and beyond, in the Americas, Europe, Africa and Asia. This network of offices allows for global supply chain optimisation with an end-to-end service for all clients.

Its suite of sophisticated contract logistics and warehousing centres has been key in ensuring effective support for the demanding FMCG sector. GAC Dubai was named FMCG Supply Chain of Year winner at the Logistics Middle East Awards in April 2022 in recognition of its supply chain management services to the logistics industry in the Middle East: the third time it earned the accolade in the last five years. Its FMCG operations comply with Pharmaceutical Goods Distribution Practices, health authority regulations and GAC’s stringent QHSSE standard.

Technology has become a cornerstone of these warehousing operations. Implementing advanced digital platforms and automation can improve delivery times to end-customers, boost productivity and efficiency, and enhance the overall visibility and utilisation of fulfillment centres.

Technology becomes even more vital as warehouses and pallet positions continue to grow. After all, what is the point of additional space if it is not fully optimised?

GAC’s newest warehouse in Qatar in Ras Bufontas Free Zone features up to 40,000 pallet positions, as well as temperature and humidity-controlled chambers, to meet the needs of the local FMCG sector. It has been built based on the experience and expertise accumulated from more than 60 years in the logistics industry, and with advanced technology in mind. 

Implementing Technology

Warehouse Management Systems (WMS) are a vital part of supply chain management. For FMCGs, they help companies keep on top of product stock levels that traditionally have razor thin profit margins with a range of capabilities such as warehouse space allocation, stock tracking, bulk packing and task scheduling.

GAC’s warehousing operations are supported by GACWare: a proprietary and flexible WMS that provides customers with a real-time snapshot of stock levels and issues advanced alerts when new stock is required. The reports deliver valuable insights to help customers make informed and timely decisions to improve their supply chains.

" With geopolitical uncertainty, there’s a growing trend of near sourcing to shorten the supply chain to ensure fast turnaround for product delivery and rapid response to customers’ needs "

Visibility is an essential component of the FMCG supply chain as breakdowns can lead to empty shelves and lost income. That is why GAC works closely with its customers to be as transparent as possible when it comes to supply chain management and GACWare, which can be being adapted for small start-ups and large retail/FMCG scenarios, is a shining example.

Digitalisation has become central to GAC’s offerings in the contract logistics and warehousing sector. In addition to GACWare, the company has introduced a number of digital features to boost its operational efficiency and effectiveness.

Examples include: an on-the-go warehouse scanning feature to streamline operations and reduce human error; specialist software to facilitate serialisation and tracking of goods for the pharmaceutical sector, with potential to be adapted for FMCG and other sectors; a tailored supplier invoice management system that replaces paper-based documentation; and a customer relationship management system for offices worldwide.

Technology is now everywhere in warehousing. Fulfillment centres that are not pursuing digitalisation risk falling behind. The complicated nature of the FMCG supply chain makes the use of technology in GAC’s warehouses and supply chains a must to improve efficiencies, innovate and provide long-term stability to a sector that is extremely susceptible to even the slightest break in the chain.