The Business Problem
The client is a well-renowned company in the consumer packaged goods (CPG) industry and produces a wide range of products in the beauty, grooming, and household care units. The client’s business units were spread across 50+ countries across the globe. However, they were facing challenges in price and quality benchmarking for their products and machines. The need to identify suppliers who were critical for their business processes and associated risks compelled them to engage with SpendEdge. The key aspects they were looking to address through this engagement were:
Risks Associated with OEM Supplier and DFC Rolls: The double face corrugated (DFC) rolls used during shipment to prevent boxes from getting damaged lacked superior quality. In addition, machine cutting consumables were directly purchased from the original equipment manufacturer without any price benchmarking; thus, increasing the possibility of supply chain risk.
Cost of Reusable Gloves: The single-use gloves used by the client were becoming cost prohibitive and they were facing challenges identifying new suppliers who were within their budget limit.
Improving your supplier identification process can help you achieve substantial growth. To know more about how we can help your business with our supply chain risk management solution, request a free proposal below!
Solutions Offered and Client Journey
The experts at SpendEdge carried out a comprehensive risk assessment and identified suppliers who were critical for the company. In addition, they identified risks associated with key stakeholders and those associated with supply capacity, fluctuation in supply capacity, and their subsequent impact on prices.
In a span of three weeks, the experts at SpendEdge offered a solution to improve the client’s supply chain risk management capabilities. They also recommended utilizing an existing and pre-approved chemical supplier to provide/produce nitrile reusable gloves. The insights offered helped them to identify appropriate suppliers and evaluate their performance proactively. With our help, the CPG company was able to secure alternate suppliers and reduce the likelihood of supply chain disruptions.
Key Findings and Outcome
SpendEdge’s supply chain risk management service enabled the client to identify new suppliers and assess their delivery capabilities. The initiation of quality testing and price benchmarking helped create competition among the existing suppliers and provided opportunities for efficient contract management. The supply chain risk management solution helped the client to:
- Achieve cost savings of more than $9,000, while exploring the usage of reusable gloves.
- Reduce dependence on OEMs and achieve cost savings of more than 11%.
- Shortlist suppliers with low financial risk and identify cost-saving opportunities.
- To know more about this engagement, get more info.
Types of Supply Chain Risk
Why is Supply Chain Risk Management Important?
Supply chain risk management is an essential part of any strategy and plays a crucial role in determining the financial health of any company. It helps determine the success of your business by helping you to proactively strategize plans for business risks. Supply chain risk management is imperative for companies looking to ensure the smooth functioning of their business units. To know about supply chain risk management best practices, click here.