Drop Size FMCG Optimization UAE
Right before we delve into drop size optimization, it’s ideal we first take a look at the FMCG industry in the UAE. FMCG is an abbreviation for Fast Moving Consumer Goods. These are products produced for mass consumers to fulfill all their basic needs. They are fast moving because consumers frequently purchase these products, almost on a daily basis.
A quick insight into the UAE FMCG industry reveals an impressive performance with great potentials for the future. The UAE FMCG market is worth over $1.5billion and with the predicted GDP growth of 5.7% in UAE, there is more height the FMCG market can reach by 2025.
There is a high volume of consumer demand which of course outlines the importance of FMCGs. This importance continues to grow and the demand will keep growing. However, it points toward the need for optimized strategies and processes to keep business healthy. In a bid to optimize FMCG, drop size is a viable angle to consider which is also known as retail consolidation. Hence, this article will treat the concept of optimizing drop size FMCG.
Drop Size FMCG Optimization in UAE
First things first, what is the drop size? It is the volume of product unit delivered in a single delivery to a particular region/area. Drop size is a distribution KPI employed in the supply chain. Then in terms of FMCG, it will mean the volume of FMCGs delivered in a single delivery to a specific region.
Drop size FMCG optimization in UAE involves conscious efforts and strategies to optimize FMCG’s drop size in the UAE market with a help of 3PL distribution partner. This focuses on making the process or KPI produce improved top line results.
Why you Need Drop Size Optimization in UAE ?
As an FMCG brand operating in the UAE, you must pay attention to your distribution channel. Understanding your landscape across traditional, modern and online channels is crucial in optimizing the cost per delivery across the above channels. There are KPIs you should use to monitor the performance of the distribution channel – and drop size is one major. Accurate analysis using drop size for your FMCG distribution channel network can help you improve the model and drive better results. This is just the framework, now let’s dive deeper into all that drop size optimization offers.
Map Product Journey
Your product journey is important and each FMCG product units may need different routes to multiple traditional channel and modern channels to drive maximum sales. This is distribution itself; how the FMCG moves from the point of storage to the store location. Since drop size is a distribution KPI, it gives you the platform to assess your channels and product journey along with the cost of delivery. This will reveal effective paths and those not yielding results.
From the data acquired, you can improve the product journey and put in more efforts and resources into routes that has full load and those that are not. Drop size reveals effective routes for your product and can facilitate corrections and future planning of distribution paths for the product.
Improves and Maximize Profits
When FMCGs go through routes that convert, then profits are guaranteed. The edge optimizing drop size gives is that it creates an avenue to focus actions and injection of products into profitable routes and this will improve profits.
Or an alternative is to partner with a 3PL distribution partner that can help you reduce cost by piggy backing on already established route operating under its network.
Here is the deal- drop size being an analysis of the volume of products delivered to a particular region, will compare the sales outputs in relation to the product volume in that specific region. When this is done across several regions, the most profitable regions become evident, and then more resources and products will go towards those regions for increased sales.
Give Insight on Customer Base
Your customer base is a crucial determinant of the measure of sales and profits your business will make. This simply refers to the number of customers you have, which may be subject to a region or a collection of regions. Knowledge of your customer base will suggest the level of demand that needs to be done to improve sales.
Areas of low drop size suggest low number of customers and vice versa. With such a data availability, brands can maximize the areas of high customers and on the other hand, seek strategies to improve customer number and activities in the lacking zones or regions.
Efficiency is an elaborate term and can be broken down as you seeing maximum results in your distribution strategy of FMCG. This is why you need KPIs to evaluate your distribution operations and drop size is one of them. Drop size optimization provides data and visibility on what’s happening in your distribution routes. With this data, proper steps can be taken and positive change happens, hence driving efficiency.
Determines Route for Underutilized Truckload
Underutilized truckload refers to delivering inventories below the truck capacity. On a general scale, this will likely result in losses for the business as they have to pay for the full truck capacity. Sometimes this issue is inevitable as the powers of demand and supply may require optimized low inventory share with other brands going in the same delivery points through a consolidation program.
However, in cases like this, businesses can cut the losses and push up profits by employing 3PL distributor partner to optimize drop size. Drop size reveals the most profitable regions, so if there is a need to ship underutilized truckload, it should be to the more profitable regions.
Underutilized truckload on certain routes can be utilized through a retail consolidation program to reduce dead miles and optimize the load size.
How Al Sharqi can help in Drop Size FMCG Optimization?
Al Sharqi offers drop size FMCG optimization in the UAE to help you improve the efficiency of your supply chain distribution.
With the aim to provide the best drop size FMCG optimization services to our clients, here are some of the benefits that comes along working with Al Sharqi.
Plug and play distribution
There will be no time and resource waste. We adopt drop size, gather data, and see which of your delivery routes yield results. We revive the routes with low results and optimize the result- yielding routes for better outcomes. In all, we make your delivery route efficient.
Our drop size FMCG optimization services will make your distribution channel more efficient with better delivery routes and data visibility.
The benefits are immense, other additional benefits include.
- Reduced cost
- Minimized travel time
- Sufficient data for supply chain analysis
- Smooth FMCG distribution chain.