When consumer products companies are asked about their most important priority for reducing risk, supply chain fragility is mentioned first.
A recent poll conducted by SAP found that fully 47 percent of consumer products executives surveyed indicated that strengthening their supply chain against fragility was a top priority. With barriers rising from geopolitical instability, and globalization in retreat, the consumer products supply chain has never looked more tenuous. So it is no surprise that consumer products firms want to strengthen it.
Improving their consumer products supply chain also is a source of opportunity for many companies. Roughly 38 percent of consumer products executives in the same survey said that one of their top three priorities for improving efficiency was strengthening supply chain dependability.
The top pain points for consumer product supply chains include a lack of collaboration, issues with speed, and poor visibility.
The Roadmap for Consumer Products Supply Chain Resiliency
There are a number of ways that firms plan to tackle consumer product's supply chain fragility and drive greater efficiency.
Foremost among the solutions is better technology use. Greater use of technology was cited by 44 percent of consumer products firms when recently surveyed by IDC, a technology research firm.
Other ways that consumer products companies plan to improve their supply chains are through supply chain diversification through multiple suppliers, a greater use of financial hedging for better price stability, and locking in longer-term contracts.
All of these tactics except for long-term contracts are enabled by having the right enterprise resource planning solution (ERP) in place. ERP is the foundation for future-proofing a consumer products supply chain and driving greater supply chain efficiency and resiliency.
Where ERP Strengthens a Consumer Products Supply Chain
ERP is the nerve center for a consumer products business, serving as the company-wide backend software that connects all departments within a company as well as its consumer products supply chain partners. Having a modern, cloud-based ERP solution in place gives a business the tools needed for tightening its supply chain and future-proofing for when dynamics change.
There are a number of ways that ERP can help strengthen a consumer products supply chain.
- Enhanced Visibility. A modern ERP solution connects a business with its supply chain partners in real time. With this visibility, consumer products firms can see where inventories are low among supply chain partners for better decision-making and less disruption. This visibility also extends to a company’s own inventory, enabling preemptive and predictive ordering as resources draw low or in anticipation of booked demand.
- Automated Adjustments and Recorders. Since ERP can be widely automated, businesses can set up automatic recorders or purchase from different suppliers based on internal or external conditions related to the business. If a primary supplier is running low, a business can automatically reorder while supplies are still in stock. If shipping rates rise for a given region, a consumer products firm can automatically adjust and order from an alternate approved supplier.
- Better Supplier Management. A consumer products supply chain can be made more resilient with ERP through a standardized process for registering and tracking approved and alternate suppliers. Supplier relationships can be managed entirely through a company’s ERP system, and conditions set for when alternate suppliers will be used. As noted above, orders can then flow to the correct supplier based on price changes or manufacturing requirements based on current orders in the system.
- Improved Modeling and Demand Planning. Because operational data is linked with consumer products supply chain partners, ERP can help more accurately model resource demand and model complex scenarios that might stress a company’s supply chain. With the analytics built into modern ERP solutions, including connections to third-party AI engines such as ChatGPT, consumer products firms can model supply chain scenarios and develop more robust planning against disruption.
- Monitor Quality. A key component of supply chain management is ensuring supplies meet quality specifications. With an integrated ERP solution, issues with a specific supply chain partner around quality can be flagged at arrival or on the shop floor when discovered, ensuring that supply chain partners deliver the quality that is specified and quality issues do not get missed.
- Greater collaboration. When a company connects directly with supply chain partners through its ERP, it boosts collaboration and coordination with these partners. This enhanced collaboration further strengthens a consumer products supply chain on account of greater visibility and coordination.
Learn More About How ERP Can Help
A modern, cloud-based ERP solution such as SAP S/4HANA Cloud Public Edition or SAP Business ByDesign empowers consumer products supply chain management. And with the state of trade today, consumer products businesses need all the help they can get.
Learn more about strengthening your consumer products supply chain, or get your specific questions answered by contacting one of our experienced ERP consultants at (801) 642-0123 or info@nbs-us.com.
