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By Ralph Hess • June 7, 2018

Overcoming Today’s CPG Manufacturing Challenges with ERP

Consumer packaged goods (CPG) is a dynamic space that is changing rapidly due to better-informed consumers and new global market opportunities. These changes make fo exciting times for CPG manufacturing businesses, but they also pose several challenges.

A good ERP system can help alleviate many of the challenges that CPG manufacturers face today. Here are some of the common challenges, and how ERP can help.

Challenge #1: Evolving Consumer Demands

As consumer product companies, CPG manufacturers need to be customer-focused, efficient, and fast. Consumer preferences have changed in recent years, and the success of any business within this industry relies on how effective companies are adopting the changing demands of consumers.

The adage used to be “the customer is always right.” However, changing customer demands and the unpredictability of the market has changed that to, “the customer is always informed.”

Customer connections have become an important aspect of the CPG industry, and businesses must find a way to create an ongoing dialogue with consumers. By doing so, companies create an ongoing story that will keep customers happily invested and returning.

An ERP system with integrated CRM capabilities allows CPG manufacturers to keep track of all their partner and consumer information in one single database. The CRM system within ERP stores consumer data, monitors log field changes, maintains a record of verbal and email communication with consumers, and more.

From there, an ERP system allows CPG manufacturers to take this consumer information and send customized reports and email notifications to customers. This includes quotes, invoices, and even tracking information for shipped orders. If a customer wants statements, order history, or anything else of the sort, an ERP can pull information from the CRM and customize virtually any report consumers may want.

Challenge #2: Globalization

As the world is steadily becoming a group of interconnected buyers across continents and cultures, this transformation is driving CPG manufacturing companies to rethink their business model so that they may profitably serve more consumers with desired products. This also means a wider audience across the globe, meaning more consumers to keep happy and satisfied.

The U.S. and Europe are considered mature economies where CPG companies complete primary to retain or gain market share. On the other hand, there are emerging economies, such as China, that are revealing themselves to be new market for new and established CPG manufacturers.

Globalization can be very difficult for manufacturers because of the high number of stockkeeping units (SKU’s) and the amount of business processes that increase due to heavily stocked inventory. This requires additional effort and investments as they often need to change their packaging to tailor to their markets. Just thinking about the concept of trying to track all the SKU’s can cause anyone a headache. An integrated ERP solution can help by monitoring and tracking each piece of inventory/SKU, automatically and without hassle.

By implementing an ERP solution, CPG manufacturers can transform the operating model to enable automation that can revolutionize how your company organizes and delivers front and back office services across such a wide, global audience.

Globalization can also create piggyback challenges for CPG manufacturing companies such as global compliance and local regulatory standards. Luckily, ERP solutions for CPG manufacturers from Navigator Business Solutions support European Data Privacy requirements, SAP localization support for 22 countries, pre-localization support for 18 countries, and more.

Challenge #3: Agile Supply Chain Pressure

Another piggyback challenge is the pressure CPG manufacturing firms face when managing the supply chains that support market-competitive global manufacturing. As a result, CPG companies are utilizing benefits of supply chain capabilities and features that an integrated ERP system can provide.

Supply chain management (SCM) is defined as the management of the flow of goods and services, involving the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. For CPG  manufacturers, managing the supply chain is extremely important and can even be a “make it or break it” type of situation.

ERP systems that have SCM integration benefit from having a comprehensive inventory tracking system to help business control and manage their SKUs. With integrated SCM/ERP, businesses can organize and categorize their inventory, better manage detailed warehouse data, and record various product movements. This provides supply chain managers with a greater understanding of what inventory is on hand, what has been shipped out, what hasn’t and where the inventory is at all times.

With end to end traceability and access to real-time information and analytics, companies can improve decision making and visibility into supply chain operations. ERP solutions for CPG manufacturers from Navigator Business Solutions can provide manufacturers with analytics, anytime/anywhere, and manages complex supply chains.

ERP software can give companies a huge competitive advantage by streamlining their operations and optimizing their business processes. As a result, CPG manufacturers benefit from greater visibility to their operations, reduce cost and increase efficiency through rapid access to real-time data, and improve customer connections.

As a long-time trusted SAP Global Partner, Navigator Business Solutions offers complete suite-in-a-box, future-proof SAP solutions to help customers grow while supporting the constant changes occuring in their manufacturing and distribution landscape. Navigator delivers the SAP expertise that our clients trust to enhance their businesses and operate as leaner, smarter and more nimble companies.

If you face any of the above challenges—or manufacturing system challenges not listed—contact us for guidance on how ERP can help.

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