Strategic Sourcing in the Consumer Packaged Goods Industry
GAIN BACK MARGIN THROUGH STRATEGIC SOURCING
CPG companies operate are in a very challenging and dynamic market space. Simultaneously, they must:
- Meet the ever-changing needs of a wide-ranged customer base of millennials to seniors – who are striving to get the most value out of every dollar spent in a highly competitive environment;
- Stay ahead of their competitors throughout the marketplace – who are motivated, aggressive and always willing to eat margin to win new accounts;
- Work collaboratively with suppliers & vendors – raw material providers, contract manufacturers, marketing & creative agencies and retail business system & software providers – all of whom are looking to increase their fees and make their accounts more profitable.
Many businesses in the CPG landscape, whether retailer or manufacturer, are properly focused, first and foremost, on their customer base and meeting their needs; this includes developing innovative and technologically advanced product lines, enhancing shopper experiences and expanding into emerging markets. These initiatives foster brand loyalty, typically safeguard steady revenue growth and potentially offset competitive advances. Despite the countless initiatives CPG companies put fourth, the increase in popularity of private brands and continued rising costs of production have cut into the bottom-line driving profits down and decreasing available budget to invest in future, innovative products.
Source One provides CPG companies with the industry knowledge and sourcing expertise needed to reduce costs, enhance or foster new supplier partnerships and increase transparency and control of your bottom-line. These strategic initiatives are performed via an adaptable, flexible suite of procurement outsourcing, market research and spend management services. We offer subject matter expertise, streamlined processes and decades of strategic sourcing experience to quickly identify opportunities for spend reduction, scope of work value additions and benchmarking exercises on your behalf to ensure identified opportunities translate into tangible savings. For CPG retailers and manufacturers, Source One is a one-stop-shop with the ability to manage 100% of internal and external spend categories.
Direct Expenditures for Consumer Packaged Goods Manufacturers
Within the CPG industry, the highest areas of expenditure include raw materials along with contract manufacturing and contract packaging. While these spend categories represent the biggest expenditures for any CPG company, they are also those with the lowest margin and come with a high cost of change. When considering cost reduction in these areas, it is important to identify the right opportunities for sourcing, before you begin to invest time and effort into a project where change is not possible or costs are already as low as they can be. Source One’s strategic sourcing experts are well experienced in helping companies benchmark their spend, allowing them to follow only the path that leads to maximum potential savings in the shortest amount of time.
Let Source One’s team of experts help you find the right opportunities in these areas of direct expenditure:
Indirect Expenditures for Consumer Packaged Goods Manufacturers
The most substantial indirect expense for CPG companies, by far, is marketing and advertising. The joint imperatives to solidify brand loyalty and maintain or expand market share makes continued investment into marketing and advertising necessary. At Source One, our strategic sourcing resources include dedicated marketing subject matter experts that can help your internal marketing and advertising groups get the greatest ROI from their budgets. Our portfolio of strategic sourcing and value identification services allow your internal marketing resources to focus on strategy while we keep costs in line. Our strategic sourcing team understands what is important to marketing, and works closely with them to ensure they get the most value out of their supplier relationships.
Keeping track of consumer demographics, activities, preferences and needs are an important factor when deploying marketing/communication initiatives while simultaneously providing the same look and feel throughout each customer-facing platform. Source One Management provides industry knowledge and sourcing expertise in customer-centric platforms to ensure your consumer’s needs are being met and your platforms are producing the same message throughout while maintaining a high uptime metric. We provide experience with the following platforms & Integrations:
- CRM Platforms
- Customer Loyalty Platforms
- POS Systems
- Order Management Systems
- Call-Centers/Customer Service Operations
- Administrative Interface Platforms
- Software Integrations
- SaaS & Cloud Services
- E-Commerce Platforms (Web Optimized Solutions)
- Mobile Application & Integration
Source One’s strategic sourcing experts can help your company reduce costs and improve supplier relationships in marketing, as well as these other areas of indirect spend:
Source One’s team of strategic sourcing experts can help your organization make the right decisions when it comes to spending – allowing you to refocus on product innovation and gaining a competitive advantage in the marketplace. We can assist in all aspects of vendor cost reduction, from opportunity identification, to strategic sourcing, to contracting best practices, to implementation and supplier relationship management.
Let us help you today!
Our Solutions for CPG Manufacturers
Cost Reduction Services
Source One provides procurement solutions for mid-size and Fortune 500 companies. Our solutions include free procurement software as well as traditional procurement consulting services such as spend analysis, statement of work building, RFx management, and contract negotiations.
Savings Through Strategic Sourcing
Our strategic sourcing services average 18% savings across all commodities for our clients. From office supplies, to raw materials, to freight and insurance services, Source One has the strategic sourcing team in place to help you obtain savings throughout your supply chain.
See Sample Savings by Category
Cost Reduction Case Studies
Our roster of clients, which span the industrial spectrum, have obtained real hard-dollar measurable savings as a direct result of our collaborative efforts in strategic sourcing.