Cosmetic Products Strategic Sourcing: A SpendEdge Case Study

Cosmetic Products Strategic Sourcing: A SpendEdge Case Study

Cosmetic products brands not pursuing innovation in their supply chain and making use of the strategic sourcing best practices are facing lower revenues globally and paving way for new players to capture market share. Click To Tweet

Today, cosmetic products brands are generally shifting away from big-spend traditional media campaigns and toward smaller, but more varied and more dynamic digital or multi-channel communication. Such a communication is often two-way, involving direct and semi-direct interaction with customers, fostering closer relationships, request proposal allowing data collection and, as a result, advanced behavioral segmentation and personalized promotional campaigns. However, with the rise of digital media, more particularly social media, comes a challenge of catering to the increasingly product-educated customers in a context in which other consumers’ opinions and social networks are increasingly integrated into the decision process.

Business Issues

  • The client: One of the leading cosmetic products brands in the US
  • Size: >$6 billion in revenue
  • Area of Engagement: Strategic sourcing

The client – is a leading American fortune 500 global retailer specializing in cosmetic products including bath, beauty, fragrance, and candles. The company is headquartered in Ohio, U.S. One of the core objectives of the client was to reduce the cost of goods associated with corrugated box supplies. The client also wanted to standardize and reduce SKUs for select items and incorporate strategic sourcing best practices across 11 plants and distribution centers in nine countries across the globe. Faced with this challenge, SpendEdge was engaged to coordinate procurement efforts in different countries, including rationalizing SKUs and consolidating suppliers.


Benefits of Strategic Sourcing Best Practices

Strategic sourcing is the foundation for deep change within a supply chain that leads to better financial gains. With all the obligatory tasks facing an organization, improving procurement and adopting strategic sourcing best practices is the effective way to work toward better business.request proposal Additionally, strategic sourcing is an approach to robust product procurement that continuously re-assesses and evaluates a company’s purchasing behavior to increase the overall profitability.


Key questions answered in our strategic sourcing engagement

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Client Journey

The strategic sourcing experts at SpendEdge tailored a comprehensive research approach which included qualitative and quantitative data collection procedures coupled with primary and secondary research methodologies to help the client gain better visibility into their sourcing and procurement processes and identify the major areas of spends. The experts also amassed information from various proprietary sources to further help the cosmetic products manufacturer reduce the cost of goods associated with corrugated box supplies.

The Solution Benefits and the Business Impact

With the help of SpendEdge’s strategic sourcing best practices engagement, the cosmetic products manufacturer developed detailed supplier evaluation criteria and pricing worksheets to make the supplier selection most effective. Additionally, all suppliers, including incumbents, were ranked based on criteria and assigned weights to create the auction shortlist. Final supplier selection recommendation was made based on qualitative assessment scores, geographic coverage, previous experience with the vendor, quality audit results, request proposal approved samples, and product development and tooling costs. This helped the client identify savings of 35%, compared to their current spend


Cosmetic Products Brands Future

Today, consumers are increasingly conscious of the environment, ethical, and social implications of consumption and production. As a result, individuals expect businesses to share their concerns, which means a company must commit to a responsible use of resources in development and production, across their value chains, which gives rise to a whole new level of innovation across all areas of the cosmetic products industry.


A must-read case study for procurement specialists and decision makers looking to develop an understanding of the cosmetic products brands across the globe

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