Transforming
Consumer Products
How procurement and supply chain management are driving change
Consumer Products:
An Industry Facing Unprecedented Disruption
The consumer products industry is changing rapidly. Consumers demand innovative products, sustainable options, and personalized experiences from brands they trust. Supply chains are becoming more complex, involving intricate inventory management considerations and a network of global suppliers, co‑packers, and co‑manufacturers.
As a result, procurement and supply chain management play an increasingly vital role in driving digital transformation. Explore how next-generation practices powered by intelligent technologies can help companies like yours grow profitably and sustainably.
Of consumer products executives experience product shortages with direct material suppliers 1
Only
Of consumer products executives can quickly find alternative sources of supply 2
Just
Of consumer products companies have an automated capability to flag events that could disrupt tier one suppliers 3
Only
Of consumer products executives can gain a clear view of overall spend automatically, in real time 4
Four Key Business Outcomes
Improve employee satisfaction and efficiency by engaging collaboration throughout the supply chain
Create a touchless and compliant process with automation embedded along the financial value chain
Sourcing and Contract:
Key Challenges and Opportunities
Standardize source-to-contract processes across your organization to identify savings opportunities and find new sources of supply – reducing costs and mitigating risks.
Challenges
- Align with both consumer and employee concerns for responsible products
- Monitor individual supplier social responsibility and supplier diversity
- Ensure supplier environmental, social, and governance (ESG) and other compliance across the supply chain
Opportunities
- Move to a local and sustainable base of suppliers
- Consolidate all sourcing contracting, and spend in one place
- Make risk due diligence part of the procurement process
Challenges
- Track product, planning, packaging, labeling, and quality management
- Increase product safety and quality
- Assess and monitor individual supplier risk
Opportunities
- Gain better visibility into quality issues and complaints
- Onboard new suppliers faster
- Eliminate manual information exchange with trading partners
Plan and Forecast:
Key Challenges and Opportunities
Respond effectively to changes in supply, demand, and market conditions. Synchronize decisions across the organization with an integrated approach to supply chain planning.
Challenges
- Bring new products to market faster
- Boost on-time and in-full (OTIF) delivery
- Drive better supply chain collaboration
Opportunities
- Integrate data-driven insight and transparency into suppliers, co-packers, and co-manufacturers
- Identify potential risk factors to prevent any disruption to the release of new product lines
- Keep expedited logistics costs low
Challenges
- Move to supplier managed inventory
- Ensure resilient planning
- Manage exceptions
Opportunities
- Get early visibility into demand and inventories
- Streamline the replenishment cycle
- Increase service levels to enable a strategic supplier-buyer relationship
- Align production plans with suppliers’ capacity promptly
Buy and Deliver:
Key Challenges and Opportunities
Reduce procurement costs, drive compliance, and gain greater visibility with transparent and connected spending. Manage goods and goods quality more efficiently across warehousing, fulfilment, and distribution.
Challenges
- Reduce supplier delivery variability to drive lower safety stocks
- Cut scrap and spoilage levels
- Improve working capital
Opportunities
- Automate transaction collaboration
- Improve visibility of supplier capacity to meet forecast demand
- Gain a view into inventory and production status at third-party manufacturers and raw materials suppliers
Challenges
- Deliver the right products to consumers at the right time
- Reduce stockouts and retail penalties
- Increase revenue share
Opportunities
- Engage next-level collaboration across the supply chain network
- Gain real-time visibility into metrics for supply availability across multiple time horizons
- Improve fill rates and decrease stockouts while reducing excess buffer inventories
Challenges
- Improve on-time customer shipment performance
- Respond instantly to changes in supply and demand
- Identify potential issues before they affect consumers
Opportunities
- Manage goods effectively across warehousing, fulfillment, and distribution
- Spot potential breakdowns using dashboards and configurable rules
- Gain early visibility into demand and inventories to respond faster
Invoice and Pay:
Key Challenges and Opportunities
Turn your invoices into strategic assets. Automate your accounts payables processes to gain better visibility. Improve trading partner relationships. Accelerate ROI.
Challenges
- Capture errors and exceptions before they reach accounts payable and procurement
- Provide real-time access to PO, invoice and payment status
- Move to touchless invoice processing
Opportunities
- Reduce exceptions with prevalidated invoices
- Decrease expedited transactions and costs
- Increase touchless rates with interconnected capabilities
How Customers Are Achieving Value from SAP® Solutions
Learn More About Procurement Software and Solutions from SAP
CP companies in 134 countries are SAP customers5
Of the greenest CP companies in the world run SAP solutions6
Of the most successful consumer brands in the world run SAP solutions7
Of CP companies in the Forbes Global 2000 are SAP customers8
- “The Imperative for Procurement Digital Transformation,” Agile Procurement Insights Research by SAP in collaboration with Oxford Economics, 2021.
- Ibid
- Ibid
- Ibid
- “Intelligent Consumer Products: The Digital Transformation Imperative,” SAP SE, 2022.
- Ibid
- Ibid
- Ibid