Late, short deliveries cost food and CPG makers $100 billion

Cleo estimates that late and incomplete deliveries cost U.S. and Canadian consumer packaged goods (CPG) and food and beverage manufacturers about $100 billion a year. The supply chain software company released the figure Tuesday in a report on on-time, in-full (OTIF) performance. Direct costs such as retailer chargebacks, expedited freight and dispute management make up $10 billion to $11 billion of that total, according to The $100 Billion Supply Chain Penalty: OTIF's Total Economic Impact. Cleo attributes the other $85 billion to $90 billion to losses that rarely appear in financial reporting: lost shelf space, smaller retailer orders, excess inventory and manufacturing inefficiencies.