GEP takes a holistic approach to procurement, providing procurement technology, strategic sourcing and procurement outsourcing, to help its consumer products & services clients develop stronger procurement infrastructure while realizing significant savings.
An increasingly stringent regulatory environment, rising commodity costs, and constantly-shifting consumer preferences continue to significantly impact the consumer products & services industry. The rise of technology and new digital age have further influenced the dynamic relationship between the business and consumer. Companies are expected to react, respond, and innovate to meet consumer needs at a much faster pace, while continuing to meet government requirements, maintain ethical and sustainable business practices, and contain costs.
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An Objective Look at Benefits, Challenges and Feasibility
GEP understands the challenges its consumer products & services clients face and helps them develop strategies and solutions geared at overcoming these difficulties. We take a holistic approach to procurement, providing procurement technology, strategic sourcing and procurement outsourcing to help our clients develop a stronger procurement infrastructure while realizing savings. This allows CPG companies to focus on the key issues defining their industry today such as measuring and managing marketing, embracing the potential of the internet, and going “green”, while reducing overall costs.
Speed to market pressures impact key strategic categories in the apparel, footwear & accessories space. Procurement professionals in multi-channel firms need to establish systematic means of engaging with partners that remain flexible as a brand grows and can be developed to meet consumer trends. Marketing, supply chain, direct materials, and retail categories, all require unique supplier characteristics and procurement management techniques, and specifically:
- An agile marketing supply base that can quickly scale to meet the cyclical needs of a fashion-driven industry
- Flexible supply chain partners that can respond to shifting consumer demographics and manufacturing hubs
- An emphasis on direct material review and evaluation that ensures that suppliers meet the brand's quality standards while simultaneously controlling cost
- Centrally managed suppliers and procurement processes that ensure consistency amongst owned retail locations
Additionally, diverse supply market dynamics necessitate customized solutions for those industry-agnostic procurement categories in the apparel, footwear & accessories industry. These more “commoditized” product and service offerings lend themselves to rate-based evaluations and high levels of supplier competition. At GEP, we understand these types of challenges and help our apparel, footwear & accessories clients meet them through a variety of procurement strategies and solutions. By facilitating closer working relationships between manufacturers and suppliers, GEP helps clients reduce wasteful spend and realize savings.
Food and beverage companies face a competitive market, with constant challenges to keep consumers engaged and loyal, while also finding innovative and creative ways to keep costs down. Ingredients, marketing and logistics are key areas of focus when looking for opportunities for increased service and quality, cost reduction, and total overall value.
- One of the most severe challenges procurement faces is tracking and managing commodity indices. Unforeseen spikes in prices necessitate a stable and reliable back up of suppliers able to meet the high-quality standards expected — and on short notice. Diversification of the supplier base to ensure continuity of supply is a key concern; balancing this need with traditional supplier consolidation strategies to drive incremental savings is essential
- Marketing drives a food and beverage company's consumer loyalty, purchases and sales. Traditional procurement practices need to be adapted to focus on reviewing marketing's investments; reviewing costs and return on investments can yield higher value with more efficient marketing programs
- Identifying alternative and innovative solutions within logistics is more important than ever. Proactive management of distribution channels and continuous review for network efficiencies are vital to combat the volatility in fuel and other costs
GEP's dedication to providing real value includes the understanding that cost reduction is not the only benefit we offer — and nor should it be. We bring a keen understanding of the dynamics affecting the industry, and the ability to adapt core procurement strategies to obtain the best value for you. GEP can help synergize teams to streamline processes, raise service levels, meet quality standards, and reduce cost.
Personal and household goods companies face pressure to stay ahead of consumer trends, develop and deliver innovative products, and control brand image. Purchasing professionals are challenged to develop strategic supplier relationships in key spend areas that keep the company competitive and on the cutting edge of the industry, while negotiating advantageous agreements for the company. Marketing, raw materials, and logistics are spend areas that require unique supplier capabilities and partnerships, for example:
- Great importance is placed on relationships with marketing suppliers who have experience with a company's brand and strategy
- Strict evaluation of raw materials must be followed to ensure they meet quality standards. To stay competitive and innovative, a unique chemical or other raw material may be required that only one supplier can provide, presenting negotiating challenges
- Developing strong partnerships with sellers and ensuring consistent, on-time delivery of products is critical. Sellers may dictate which transportation companies may be used when delivering products to them, presenting leverage and negotiation challenges for the procurement team
Significant savings can be achieved by challenging longstanding supplier relationships in key spend categories. GEP's comprehensive supplier evaluation and negotiations process ensures that all factors are considered in the sourcing process. In addition to price, supplier capabilities, past experience with the company, service levels, and competitive differentiators are evaluated. By considering these factors, GEP consistently helps personal and household goods companies partner with suppliers that meet their competitive needs, while providing the best total value to the company.
The current economic climate may be challenging, but these challenges represent an opportunity for CPG companies to develop best practices and drastically improve their competitiveness and profitability through procurement efforts.