Consumer Goods Industry Consulting

Price, availability and lead time – this is the field of tension in which consumer goods producers have always operated. In addition, more and more consumers want sustainably manufactured products. Suppliers with a clear sustainability profile can use competitive advantages here.

 

Consulting for procurement & SCM in the consumer goods industry

High speed and great variety are the characteristics in which the consumer goods industry clearly differs from other industries. Consumers want novelties: Products for daily use should be original, beautiful or useful – and increasingly also sustainably produced. More and more companies understand this. They are looking at ESG criteria, setting goals and developing roadmaps towards becoming an environmentally friendly and carbon-neutral company.

Our experts for the consumer goods industry accompany you on this path – and support you in procurement to optimise price, availability and lead time also with regards to sustainability goals.

 

Value Engineering: Thinking holistically about value enhancement and cost optimization

For the past years, manufacturers of consumer goods have been repeatedly hit by so-called black swans: The pandemic and the Ukraine war as events that were not really foreseeable despite good planning and risk hedging. The consequences are still being felt today and are manifested in longer delivery times, supply interruptions and massive cost pressure. In addition, consumers are holding back in view of the still high inflation – as such, the retail sector is experiencing a significant drop in sales.

With Value Engineering, we support you in successfully mastering these challenges. Together with your team, we analyze your product portfolio holistically and systematically. We optimize processes and specifications, realize cost reductions in procurement and restructure your supply chain.

The results of our value engineering approach are

  • more innovative products
  • faster time-to-market
  • lower costs
  • improved margins
  • higher resilience
  • improved sustainability and carbon footprint

The consumer goods industries are as diverse as the consumer needs of the citizens. Even if the products are very heterogeneous and have very different significance for the everyday lives of consumers, all suppliers are faced with the task of switching to sustainability at reasonable prices and remaining innovative in the process.

Which topics are important in the consumer goods industry?

Clear structures and efficient processes within your company are the basis for developing innovative products and bringing them to market quickly. We analyse your internal processes and identify potential for optimisation.

We see procurement as a value-added partner for development and production. The earlier procurement is involved in planning, the better they understand what is important and can sound out the market. In this way, ideas move more quickly from conception to production.

Our experts have extensive experience in many areas of the consumer goods industry. Thanks to our extensive knowledge of consulting private label producers, we are able to significantly reduce procurement costs for all direct and indirect requirements.

For many consumer goods manufacturers, the procurement of raw materials accounts for a significant share of the total purchasing volume. The relevance of raw material prices for business success is correspondingly high. It is true that procurement cannot completely escape the respective market development. Nevertheless, there are strategies to determine the appropriate time to buy or to hedge against massive price increases.

 

More on raw materials

Early involvement of procurement in planning is also an important prerequisite for reducing lead times. To enable acceleration, we analyse all steps from the idea to the delivery of the finished product to the warehouse and identify approaches for optimisation. Together with your team, we implement the solutions and train the new procedures.

The Corona virus pandemic has shown: Few companies have truly deep insights into their supply chain. However this knowledge is now becoming more important – to identify supply risks in terms of security of supply, and to perceive sustainability risks and counter them effectively. The consumer goods industry in particular is in the spotlight here, as consumers come into contact with their products on a daily basis. In addition, the Supply Chain Act requires that human rights and environmental standards be enforced in supply chains in the future.

However, ESG criteria do not only apply to the product, but also to the packaging. Of course, packaging should first and foremost protect the contents. To do this, it needs specific properties depending on the product, such as a barrier function for liquids or air.

Fully sustainable packaging materials that meet all these criteria do not yet exist. But as our study on sustainable packaging shows, manufacturers are aware of this challenge and are researching viable solutions.

Together with your procurement, we analyse the options available, sound out the market for your specific needs and develop contemporary solutions.

 

Intelligently deployed digital tools relieve your procurement of routine activities, analyze processes and monitor the supply chain. We examine the degree of digitization in your company, compare it with benchmarks, and create a roadmap for you that starts where benefits and investment are in the best relationship.

 

Digital Procurement

Our consumer goods experts

Paul Mohr

Managing Director

office@kgmstrategy.com Contact

Lukas Rauh

Principal

lukas.rauh@kgmstrategy.com Contact

Our insights from the consumer goods industry

Article

Food raw materials: Planning scenarios realistically

The current volatile situation in the food markets is highlighting the supply concentration and global dependencies in food production.

Client Case

Nearshoring in the consumer goods industry

The company was prompted to question its previous supply chains and work with us to identify alternative options.