Overview of the Dairy Products Industry
The global dairy products space is witnessing promising growth due to the rise in food consumption and the growth of online and mobile shopping platforms. Also, consumers are shifting toward dairy products as it is a convenient and relatively cheap source of protein. To match the supply and demand for products, retailers should leverage the use of technologies to target customers with tailored offerings. The evolving consumer trends toward healthy and clean label products is also compelling businesses to offer nutritious, safe, and affordable products to the customers. In this consumer-centric environment, organizations should also take advantage of their technical capabilities to develop new products and ensure better production efficiency while meeting the quality standards.
Here are few factors that may influence the growth of the industry:
- Welfare problems: The global dairy products space is subjected to continuous welfare problems such as impregnation and induced calving and milking to meet the production demands. This has greatly reduced the average lifespan of a dairy cow from 20-25 years to six to seven years. To counter such concerns, it becomes essential for organizations to shift toward a more organic way of producing dairy products while retaining its quality.
- Rising environment concerns: It is estimated that dairy farms contribute to about 3% of the global greenhouse gas emissions with cows producing approximately 200 liters of methane daily. The rising concern for reducing greenhouse gas emissions is also compelling organizations to shift towards more efficient ways to produce dairy products.
To bridge the demand-supply concern and meet the rising needs of the customers, organizations are facing the need for supplier profiling solutions. A supplier profiling solution helps businesses profile the ideal suppliers to improve the overall supply process. Moreover, businesses can engage with suppliers and deliver high-quality goods while enhancing economic opportunities.
The Business Challenge and the Journey
The client, a renowned dairy products manufacturer, wanted to profile the most suitable suppliers from a pool of suppliers to reduce the costs pertaining to procurement and inventory. With the help of industry best practices, the dairy products manufacturer wanted to manage and segment suppliers based on their spend and criticality. Moreover, the client wanted to deliver quality products in the desired time frame and improve the overall supply process.
To leverage spend and minimize leakage, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the dairy products manufacturing space. To measure and optimize the supplier performance, the experts also compiled information from a wide array of reliable sources such as paid industry databases, trade shows, and company presentations.
The supplier profiling solution offered by SpendEdge helped the dairy products manufacturer evaluate the suppliers based on their spend and criticality. Moreover, the client was able to segregate the suppliers based on purchase value, sourcing risk, and complexity. The solution also helped the client gain a complete view of each supplier to make more timely, contextual, and accurate business decisions.
Fundamental questions answered in this supplier profiling solutions include:
During the course of this engagement, the dairy products manufacturer was able to measure and optimize their supplier performance. Moreover, the client was able to analyze suppliers based on various factors such as price, quality, delivery, and service management. The engagement also helped the client define appropriate KPIs to prioritize and target the right suppliers.