CASE STUDY

Supply Chain Risk Analysis for a Renowned Luxury Products Manufacturer Helps Reduce Supply Related Risks

Jan 22, 2018

Overview of the Luxury Products Industry

The global luxury products comprise of goods such as drinks, fashion, cosmetics, fragrances, watches, and jewelry.  The growth of the luxury products can be marked by changing consumer behaviors, increasing international travel, and emergence of millennial luxury customer. With the relentless growth in the luxury shoppers, organizations in the luxury products manufacturing space are planning to optimize their range and prices to ensure the balanced growth for both local and international markets. Additional factors such as the increasing preference of premium products over cost-effective products and advances in online markets will contribute to the growth of the industry. Although, the luxury products space is witnessing a considerable growth with the rise in the living standards of the customer, several factors may influence the growth of the industry.

Here is the list of factors that may influence the growth of the luxury products space.

  • Economic uncertainty: Due to the US presidential election and the Brexit issue, the consumer spending habits have greatly affected. The recent economic fluctuation has lowered customer confidence and consumers are spending relatively less on luxury goods. To counter the economic fluctuations, premium luxury products manufacturers are forced to sell products at relatively marginal profits, thereby hindering sales of personal luxury goods.
  • Less number of brand outlets: The luxury products space is witnessing a comparatively lesser competition as compared to other global industries. The rising tax affiliated to the luxury products is compelling organizations to sell their products through prominent e-retailing platforms. Also, setting up physical store also require high capital investments and regulations by government authorities as compared to the online platforms.

To address these challenges and reach out to the customer in a seamless and agile manner, organizations are utilizing the need for a supply chain risk analysis solution. A reliable supply chain risk analysis helps businesses identify the potential bottlenecks in their supplier network and implement iterative mitigation strategies to reduce operational disruptions.request free proposal

The Business Challenge and Journey

The client, a renowned luxury products manufacturer, wanted to gain better visibility into the supply chain process and identify loopholes to enhance operational efficiency. With the help of a supply chain risk analysis solution, the client wanted to seek ways to identify the key performance indicators in their supply chain process to save logistics costs and increase product quality. The primary concern for the client was to identify the structure and the current state of the supply chain and the likely impact of these risks on the businesses.

To adjust their supply chain process to specific audience segments, the supply chain risk analysis experts at SpendEdge carried out extensive research methodology with prominent stakeholders in the luxury products manufacturing space. The research methodology comprised of interviews and discussions with leading procurement experts. To increase the product quality of the services rendered, the experts also compiled information across a wide array of proprietary sources such as paid industry databases, company presentations, and industry forums.

The supply chain risk analysis solution offered by SpendEdge helped the luxury products manufacturing client better understand the supply chain structure and the supply trends and forecasts. The solution also helped the client develop a risk mitigation strategy by efficiently utilizing resources such as the people, processes, and technology. After a comprehensive analysis of the data, the luxury products manufacturer was able to reduce procurement costs and conform to the procurement standards and deadlines set forth by the company.

Fundamental questions answered in this supply chain risk analysis include:

Supply chain risk analysis

The Results

Quantzig’s supply chain risk analysis engagement helped the luxury products client limit the impact of supply chain disruptions by identifying the risks within the supply chain and developing ways to mitigate them. The client was further able to profile the risks based on the severity and reduce the cost and the time duration to deliver the products.

To know more about our supply chain risk analysis solutions for retail industry

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