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Consumer goods companies used to build strong international brands that benefited from economies of scale and strong relationships with distributors, but the environment has changed. 

The current generation of consumers is less sensitive to or influenced by brands: there is an increasing trend for “self-care”, small brands grow quickly and it is increasingly important to be able to quickly interact with consumers directly through social media. 

Effective operations management in the consumer goods industry is dependent upon visibility and control of all aspects of the supply chain, from material suppliers through to the consumer.

Challenges

In this highly competitive and dynamic environment, companies must become more agile than ever to compete. Rapid response to the changing needs of consumers is the key to success. A number of evolving dynamics continue to add complexity and challenges to supply chains including increasing materials costs and constrained supply of critical inputs, driven by population growth, increasing wealth and consumerization and seismic legislation and taxation changes aimed at altering consumer behaviour and reducing environmental impact. Consumer demand is broadening with the growth of premium and fresh products at one end, and cost-conscious consumers driving the continued need for promotions and value products at the other. There is a gradual opening up of new markets that can dramatically alter global demand, whist also responding at home to channel pressures, including convenience retail and direct-to-consumer.

There is increasing market hunger for innovation due to health / environmental concerns and premiumisation / segmented portfolios are putting stress on NPD processes and product lifecycle management. In addition to this, increasing data availability offers opportunities to identify additional sales and faster consumer response to those who can analyse this data effectively.

How we can help

Our role is to help our clients cut through the complexity and attain operational simplicity. We work with them to develop a service response that addresses all operational pressures, allowing the strategy to be delivered efficiently.

We can help you with: 

  • Increasing sophistication of demand management processes to inform the best supply response
  • Tightening the control of range management and product lifecycles
  • Adopting production strategies that are efficient and flexible
  • Becoming smarter at materials management and supplier performance management
  • Establishing more effective management of key supply chain partners through more integrated and aligned ways of working
  • Optimising inventory deployment throughout the supply chain
  • Increasing visibility and traceability through our digital solutions
  • Ensuring systems support the processes of the target operating model
  • Identifying people capability gaps and developing training and education programmes
  • Reduction of heavily manual and error prone activities through Robotic Process Automation, i.e. mater data management and sales order processing
  • Deployment of leading-edge analytical tools to generate insights and inform better decision making

Consumer goods case studies

Network strategy and design: consumer goods company

Network strategy and design: consumer goods company

Network strategy and design: consumer goods company

Bidco Africa is the largest producer, marketer, and retailer of consumer goods in Kenya. The company is headquartered in Thika, Kenya with operations across 16 countries in Africa. Its products include edible oils, fats, margarine, detergents, personal care products, and animal feeds.

The company had a new manufacturing facility for new product lines. The five year sales projections prompted the need to carry out a network design strategy exercise to cost different hub and spoke scenarios to reach remote customers and increase market presence.

Our role

  • Build and verify the network cost baseline and adjusted baseline with five year sales projections
  • Include transport and warehousing costs of the downstream network
  • Conduct scenario analysis, replace retail channel partners, and introduce RDCs
  • Indicate efficiencies in through palletization vs handling cases and floor loaded trucks
  • Calculate channel partner supply chain operations costs

Results

  • Recommended a western RDC, replacing the channel partners in the region. Potential service level improvements of 32% (up to 90%), and a 0.2% reduction in total network cost as a % of total sales
  • Achieved a 5% improvement in transport cost due to palletized movement
  • Corrected average inventory days from 9 to 7 days
  • Proposed a roadmap to improve the supply chain operations and achieve the benefits outlined

Logistics strategy: greeting cards manufacturer

Logistics strategy: greeting cards manufacturer

Logistics strategy: greeting cards manufacturer

Hallmark Cards is the UK leader in greeting cards, gift packaging and personal expression products. The business designs, manufactures, and sells in every kind of outlet, from leading high street stores to specialist card retailers. The US$3.7 billion global company is based in the USA and still led by members of the founding family.

Hallmark UK operates from two DCs; one site uses a multi-million investment in automated handling systems for detailed card picking, and the other site is a 45,000 pallet location bulk store for carton picking and seasonal product. The company wanted to redesign its logistics strategy for a major retail client.

 

Our role

  • Redesign the logistics network serving the client’s single NDC with bulk pallet stock replenishment, to an operation now serving multiple RDCs with cross docked, service critical store orders
  • Design the solution for warehouse storage, handling methods, staff levels, and transport requirements
  • Identify the high-level operating principles for the business procedures and IT design work streams
  • Develop the implementation plan to minimise risks, and create the business case (operating and capital costs)

Results

  • Redesigned the existing warehouse to absorb 20% extra activity for store picking
  • Staffing solution to cope with the retail client’s +70% peak to average fluctuation
  • New pick slot design to increase the use of automation
  • Transport solution and marshalling bay design to accommodate delivery to store service levels
  • Business case signed off for negotiation with the retail client

New product initiative process assessment: global FMCG

New product initiative process assessment: global FMCG

British American Tobacco is a global tobacco company selling more than 200 brands globally. It is the market leader in more than 60 countries.

The business was struggling to cope with the volume of product and packaging changes demanded by local markets, and was unable to get new products to market quickly enough. Crimson & Co was asked to assess the current end to end NPI processes across all regions and identify actions to standardise the processes whilst making them leaner and more efficient

Our role

  • Understand current categories, processes and scale of NPI activity in each region
  • Assess  the  current  and desired  end  to end  NPI processes maturity  levels  using  the  scprime® benchmarking approach for five pilot markets
  • Create action plans for each market to close the gaps between the “As-Is” and “To-Be” maturity levels
  • Develop a process maturity assessment tool to enable global roll out to all end markets

Results

  • Common NPI categorisation framework for all regions
  • Maturity assessment tool developed, which includes seven NPI excellence profiles with thirty three elements and which can be used to support a quick rollout of the processes globally
  • Five end market assessments completed identifying the gaps between the “As-Is” and desired “To-Be”
  • Detailed action plans and fully trained teams able to roll out the process across all regions

Supply chain cost reduction

Pet food company

Supply chain cost reduction

Royal Canin is a global leader in pet health nutrition. It is part of the Mars group and in Australia imports the far majority of its products. Royal Canin’s main customer channels include speciality pet store retailers like Petbarn, wholesale and direct to customers (such as breeders).

The company required a review of supply chain costs and the implementation of identified cost savings.

Our role

  • Review supply chain cost using lean six sigma and quantify potential savings
  • Implement cost savings identified in inventory, inbound shipping and outbound transport
  • Support the tender process for the selection of a new 3PL

Results

  • Supply chain cost reduced by 30%
  • Inventory reduction of 40%
  • Freight cost reduction of up to 50% for specific transport lanes
  • New ordering process
  • New warehousing 3PL provider