FMCG growth VS shareholder returns

 
The highest ranking of consumer goods companies based on 2023 revenue have been recently announced.

Top 100 consumer goods companies 2024
 
Over the past year, the companies on this list have balanced cost-saving measures with bold investments in technology, AI, and consumer engagement to improve efficiency and stay competitive amid challenges like inflation, supply chain issues, and shifting consumer priorities. 
The largest FMCG companies in the world have invested in OpenAI’s GPT-4, Instacart etc, piloted VR for R&D, used 3D tech for better retail shelving, launched new digital platforms or acquired new enterprises to name a few initiatives that have contributed to its growth.
 
However, this has not translated in the performance of its shares and the trajectory of most of this companies have been spiraling down leading to negative returns to shareholders over the last 365 days.
 
It can be surprising that the size and growth of these companies does not match their performance in the stocks market, and it would be an interesting debate to understand why.
 
Trust? Expectations? Overall macro-economic performance? ….
 

The Largest Courier Companies in the World

Interesting infographic showing by market capitalization the largest courier companies in the world.

It´s no surpirse that the “big three” global couriers, United Parcel Service (UPS), FedEx, and DHL continue to dominate transport services with closer to 70% of market cap.

Having said that, other carriers that operate more regionally have still attained a lot of value, including Japan Post Holdings and China’s S.F. Express and ZTO Express.

Logistionary: Kitting

 

Kitting is a technique where complementary items are ordered, packaged, or shipped together as a single "kit" with a unique SKU. 

Inventory kitting is a method of organizing inventory into kits.

From a production point of view, this would mean putting and storing together all the relevant ingredients for the manufacture of a given product.

This technique can also be used to pack together individual complimentary products to create one product that’s ready to ship to a single customer.

The goal of kitting is to assemble products ahead of time as a way to streamline the order fulfillment process. Companies can kit together products in anticipation of customer orders or as a marketing strategy to drive sales volume.

Before kitting, the traditional inventory model involved packaging separate SKUs on their own and sending them out as multiple different shipments, increasing both the cost and time involved for the company and the customer.

Product kitting has numerous benefits, including: 

• Minimize pick-and-pack time by preparing ahead ingredients or final products.
• Streamlining warehouse activities and lowering shipping costs
• Optimizing inventory management by reducing slow moving stock (items that don't sell well as individual can be included in a kit that customers are more likely to buy)
• Increasing customer satisfaction and convenience
• Increase sales by pairing together items that may have not been bought separatedly.

Gartner Supply Chain Top 25 for 2024

Gartner has once more released the results from its annual Global Supply Chain Top 25, identifying leading supply chain organizations, highlighting trends and sharing best practices.

Schneider Electric mantained the top position in the list this year after crowning the list in 2023, followed in second place by Cisco Systems for the scond year in a row. Colgate-Palmolive, Microsoft and Johnson & Johnson rounded out the top five positions, with PepsiCo dropping from the top 10 in 2024.

Some interesting moves over the years with companies joining the list and some others being relegated; in these links you can check how the ranking has evolved over the last few years:

2016

2018

2021

2023

Gartner continues to recognize sustained supply chain performance via the “Masters” category, introduced in 2015. To be considered Masters, companies must have attained top-five composite scores for at least seven out of the last 10 years (2024-2024). Amazon, Apple, P&G and Unilever all qualified for the category this year once more.

Lean 8 wastes

  

Before we dive into the eight types of wastes, it is important to understand what waste is.

Waste is any action or step in a process that does not add value to the customer.

Originally seven wastes (Muda) were identified, and a methodology was developed by Toyota, as part of the Toyota Production System (TPS).

The seven wastes were; Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects. They are often referred to by the acronym ‘TIMWOOD’.

The 8th waste of non-utilized talent or ‘Skills’ of workers was later introduced in the 1990s when the Toyota Production System was adopted in the Western world. As a result, the 8 wastes are commonly referred to as ‘TIMWOODS’.

We can now deep dive into each of these eight wastes and understand how we can reduce or eliminate them as part of a leaner and more efficient operations.

The Insane Logistics of Formula 1

If you think Formula 1 races are amazing and the pinnacle of technology applied to sport, you are probably right.

There is no other sport where machinery and components are as crucial to the team success as in Formula 1.

But with twenty-one races across five continents every year, the ten teams that take part on the competition face an astronomical challenge to ensure all what they need to be competitive during the weekend is ready.

Hundreds of pellets and containers travelling around the globe moving enough equipment to ensure the comfort of thousands of workers and the capabilities to assemble and disassemble a racing car every weekend.

We already talked about what happens behind the scenes in the Red Bull air racing competition here, now is time to go even further and watch the logistics miracle that happens in Formula 1!

Enjoy!

The Surprisingly Complex Logistics of Product Returns

Reverse logistics is the movement of goods “upstream” through a supply chain, to return them from the end customer back to a retailer or manufacturer.

Reverse logistics also covers the recycling, repurposing, repairing and resale of products.

There are several types of reverse logistics, for different reasons:

Returns management: This is the most common reverse logistics process: when a customer returns an item to a seller because it is damaged, not as expected, doesn’t fit etc.

Remanufacturing or refurbishment: This involves the repairing and rebuilding of products. Retailers and manufacturers may also recover some parts from a defective product to be used elsewhere.

Unsold goods: When a retailer returns unsold goods to the manufacturer.

Delivery failure: In the instance of a failed delivery (for example, the customer was not in to receive the package), products may be shipped back to the retailer.

Rental equipment: This is when rented or leased products are returned to the manufacturer at the end of a defined term.

Repairs and maintenance: The customer will send the product back to the business to be repaired. 

End of life: These are products that can no longer serve any purpose, so will need to be recycled or disposed of.

The next video shows how reverse logistics works in real life and how complex. When the customer returns the product, a new intricate adventure starts until it reaches its final destination and potentially a new life!

Good Distribution Practices (GDP) & Good Manufacturing Practices (GMP)

 

Good distribution practices (GDP) and good manufacturing practices (GMP) are quality standards and guidelines that have the same objective, to ensure medical device and pharmaceutical products are safe, meet their intended use, and comply with regulations.

GMP focuses on manufacturing processes, while GDP covers distribution activities.

Good manufacturing practices involve consistently producing products that meet quality standards. This requires the implementation of a system where the aim is to minimize risks, from incorrect labelling of products to contamination to incorrect ingredients and everything in between. GMP cover all parts of the production process, from raw materials through to the production of the finished product.

Good distribution practices involve maintaining the quality and integrity of products through all stages of the supply chain. GDP applies to warehousing, storage, and transportation, and it covers everything from storing and transporting products under the right conditions and ensuring product integrity at the correct destination on time.

There are parts of GDP that are unique, so they don’t apply to GMP. Those unique parts of GDP include guidance on transportation covering aspects such as temperature control, vehicle controls, and conducting risk assessments on transport routes.