Australia’s FMCG industry has historically focused on cost efficiency. When your business centres around products with high turnovers, every saving matters. But as faster workflows and new technologies enable companies to rethink their operations, industry leaders say that approaching supply chain strategy from a longer-term lens will help avoid costly mistakes downstream.
Many FMCG companies remain trapped in reactive, short-term thinking. While immediate cost-cutting delivers quick wins, strategic supply chain planning that considers 10-year horizons provides far greater value by avoiding expensive mistakes, improving efficiency across entire operations, and building resilience against disruption.
Working with FMCG companies across their end-to-end supply chains, ThreeSixty Supply Chain Group sees this tension often. Adrian Grunbach, Director – Supply Chain Solutions at ThreeSixty, says when businesses prioritise short-term savings over long-term strategy, they miss the opportunity to build stronger, more resilient operations.
“The ROI might be three to five years on a particular solution, but the problem at the moment is there’s not often the appetite to wait that long,” Adrian says. “But to get ahead of competitors, you should be designing for the next 10 years and considering a six or seven year payback. The building and much of the equipment will have a design life well beyond that.”
The hidden costs of siloed decision-making
FMCG businesses and retailers can face expensive problems when the various departments making up their supply chains operate independently.
“Many of these entities are compartmentalised. Manufacturing, supply chain, product design – they don’t work together,” Adrian explains. He says this cost impact becomes evident as soon as the product starts hitting the shelf.
“If you have a lightweight, shelf-ready product, you might find that when it gets to the warehouse it is easily damaged, and you can’t handle the product because it’s too fragile,” Adrian says. “That can lead to excess inventory, or not enough inventory, because the impact on supply chain was not understood or accounted for.”
“Another case we’ve seen is when packaging decisions rule out certain types of automation, because a robot using suction can’t lift it without tearing the tops off all the cartons,” Adrian notes.
End-to-end planning brings these functions together before decisions are finalised, ensuring mistakes don’t make it to the finish line. In thinking long-term, companies save money through reduced inventory waste, the ability to use automation effectively, and fewer problems moving products through their warehouses.
The manufacturing blind spot
The shift from local to offshore manufacturing has created network design challenges that many FMCG companies have addressed reactively rather than strategically.
“Before, you might have just had regional Distribution Centres (DCs) close to manufacturing. Now, if you need to transport shipping containers to your sites, proximity to ports is important,” Adrian explains.
“Without proactive network redesign, companies face suboptimal DC locations, container utilisation problems, and increased vulnerability to disruption.”
Strategic network planning that considers port proximity, container optimisation, and disruption mitigation delivers better container utilisation, reduced freight costs, and lower disruption-related losses. The companies that try to fix container problems after they occur pay more than those who designed their networks to prevent them in the first place.
Using automation to plan for the future
FMCG companies often prioritise investing in manufacturing automation over warehouse automation, driven by manufacturing’s clearer ROI, predictable processes and until recently, the significant upfront investment in warehouse automation.
Adrian suggests businesses should now be equally prioritising automation in warehouse operations. “Manufacturing is often highly automated these days, there’s lots of focus on robots and new technologies. But warehousing operations tend to be far more basic, relying primarily on manual processes with forklifts and racking,” Adrian observes. He says companies are missing the chance to reduce labour dependency and improve efficiency in their distribution operations.
Emerging technologies are making warehouse automation more accessible. Four-way shuttles offer significant advantages over traditional automated storage and retrieval systems (AS/RS), Adrian notes. “They deliver higher throughput, greater flexibility at a lower cost and greater redundancy, reducing the impact of downtime. My expectation is they’re going to have a big impact over the next 10 years.”
According to IMARC Group research, Australia’s logistics automation market is projected to reach $4.12 billion by 2033, with FMCG among the major adopters driving this growth.
“There’s also increasing use of AI to help predict demand and better manage inventory,” Adrian says. “At the rate of change, it won’t be very long before those things are highly effective.”
The holistic approach
“One of the things we try and focus on is removing dwell time,” says Adrian. Dwell time is the time products spend waiting between processes, and Adrian says some forward-thinking FMCG operations have strategically co-located manufacturing and distribution facilities, with product moving directly between sites. This eliminates shuttling entirely, removes the need for emergency stock cover to handle transport delays, and enables closer-to-just-in-time production.
The key advantage with strategic planning in supply chain is considering the whole picture, not only a narrow view of automation. “Automation vendors mostly focus on their automation. Software vendors mostly focus on processes,” Adrian says. “But we look at the end to end.”
“We focus on getting the balance between efficiency and flexibility right. Sometimes you’ll prioritise efficiency, but if something doesn’t go according to plan there’s no flexibility left and you end up with problems,” he says.
Long-term strategic planning models multiple criteria across extended timeframes. “We’re modelling all the criteria, costs, service levels, redundancy, qualitative risks, and balancing them all,” says Adrian. He says strategic planning across all these areas should be an ongoing process, not something that’s just picked up when an issue arises. “To my knowledge, supply chain is under-reviewed. It should be an ongoing, continuous thing.”
Featured in Retail World Magazine – August 2026
