Creating a Stable Framework for Supply Chain Risk Management for a Major CPG Player: A SpendEdge Case Study
Originally Published on: SpendEdge |Devising a Robust Supply Chain Risk Management Framework for a Leading CPG Player – A SpendEdge Case Study
A prominent player in the CPG industry sought to enhance its supply chain capabilities and tackle supply chain challenges as it expanded into new market segments. This client approached SpendEdge to develop an effective supply chain risk management framework and conduct quantitative analysis within the supply chain to examine spending patterns.
About the Client: Our client is a key player in the CPG industry, specializing in a wide range of packaged goods, including paper-based products and food and beverages. With an established presence in the MEA market, the client aimed to expand its operations into new regions.
Business Challenge: The client faced challenges in creating a flexible supply chain risk management framework to support its expansion efforts.
How SpendEdge Helped the CPG Industry Client:
Step 1: Identifying Internal and External Supply Chain Risks Our initial and crucial step involved identifying various risk factors impacting the client's supply network. These risks encompassed both external and internal factors, including supply-side risks, demand-side risks, business risks, environmental factors, and physical risk elements. A thorough analysis of each identified risk factor allowed us to anticipate likely scenarios, why they might occur, and how the company could address such risks.
Step 2: Establishing Standards for Supply Chain Processes Once we identified risk factors across the global supply network, we took measures to incentivize the network to operate optimally and deliver maximum value. This required going beyond traditional metrics and setting new supply chain standards tailored to the business's functional needs. Choosing the right Key Performance Indicators (KPIs) was essential and depended on specific business requirements, market dynamics, and fluctuating demand within the client's market segment.
Step 3: Developing a Robust Supply Chain Risk Management Framework Our team created a comprehensive three-step approach that offered the client a holistic view of risk factors throughout their supply chain. This framework enhanced supply chain visibility, ensuring the seamless flow of information upstream and downstream.
Key Questions Answered in this Supply Chain Risk Management Study:
How can supply chain risk factors be identified and assessed across a global supply network?
What KPIs and metrics are relevant to the client's supply chain requirements?
How can the client enhance supply chain visibility and information flow?
Benefits of the Engagement: The supply chain risk management framework enabled the client to redefine its supply chain strategies and enhance visibility. Our solutions empowered the client to detect, gauge, and assess risk factors across its global supply network effectively.
Importance of Supply Chain Risk Management for CPG Industry Firms: Recent years have seen companies in various industries, including the CPG sector, realize the significance of robust supply chain management systems. They understand that the supply chain translates business strategies into daily interactions within and beyond the organization. This realization has prompted leading CPG industry players to invest strategically in enhancing their supply chain capabilities, even if they hold prominent positions in their sector.
Established CPG firms are reinventing their supply chain processes to tackle risks effectively and proactively respond to changing economic, technological, and competitive landscapes. This positions them to exploit new market opportunities and industry trends more effectively than their peers.
Our Findings: In this supply chain risk management engagement, we assisted a CPG industry client in transforming its supply chain performance by implementing a three-step approach. This approach can serve as a model for other CPG industry players seeking to maximize their supply network's potential.
Leading CPG brands have already transformed their supply chain systems over time and through strategic investments. So, what steps are you taking to turn your supply network into a competitive advantage?
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