Margin Erosion Analysis in Consumer-Packaged Goods Supply Chains: Drivers, Impacts, and Strategic Responses

Margin erosion in Consumer-Packaged Goods (CPG) supply chains has intensified due to structural cost volatility, global disruptions, sustainability transitions, digital transformation investments, and evolving consumer behaviors. While prior research examines these forces independently, limited scholarship integrates them into a unified profitability framework. This study addresses that gap by proposing the Integrated Margin Erosion Dynamics (IMED) Framework, which conceptualizes margin erosion as a systemic outcome of five interacting domains: cost pressures, disruption exposure, sustainability transition burdens, digital transformation investments, and consumer-driven volatility. Using an evidence-informed conceptual synthesis methodology, the study maps causal pathways linking operational drivers to financial outcomes. The findings suggest that margin erosion is not merely a function of cost inflation but a multi-layered structural phenomenon requiring coordinated strategic responses. The IMED framework offers both theoretical advancement and managerial guidance by aligning mitigation levers with distinct erosion mechanisms. The study concludes that sustainable margin resilience depends on integration quality, predictive analytics, collaborative governance, and lifecycle-based profitability management. Future research should empirically validate the IMED constructs using longitudinal firm-level data.