Consumer Packaged Goods (CPG) companies face a range of pressures ranging from the price of raw materials needed to produce their goods, to the energy needed to run plants. Packaging and distribution challenges also contribute to issues faced by the sector.
CPG producers are constantly on the lookout to reduce costs, increase quality, introduce new products, and improve efficiency while driving supply chain performance.
Most CPG companies look to advanced ERP systems to help them meet these challenges.
A CPG Case Study
At Ultra we work with a number of consumer packaged Goods Company.
As outlined in the previous post about ERP and the consumer packaged goods industry, companies in this sector are hampered by a mish-mash of legacy, home-grown IT solutions and standalone systems.
The post outlined two key drivers to change: the desire to overcome the limits of aging technology, and the goal of reducing manual paper handling and inefficient data management.
Here are three additional issues that drove the ERP selection project:
- The lack of access to information. With the legacy IT systems, the company produces a lot of data related to production, finances, shipping, inventory and more but very little information. Dozens of reports with data are produced, but are of little use without hours of review and preparation of manual Excel reports.
- Best Practices. Business processes (as with systems) have evolved with time, but have not been engineered or defined to meet best practices. The client stands to recognize major gains in efficiency through deploying best practices, such as reducing inventory costs, improving on-time shipments, and reducing production defects.
- Business Change. As the company grows, the systems have been continually adapted and built-out as needed. The current systems no longer support all the business models. Continued growth requires a scalable platform capable of supporting all business models and units.
Taking these issues into consideration, our teams help with ERP readiness assessment.
After a thorough evaluation of the current state processes and systems, clients can chose to embark on dual-track business process improvement initiative concurrently with their system selection project.
Good Results Ahead
Our clients are implementing global forecasting process, a forecast system implementation, and established Sales and Operations Planning cycle.
This allows companies to begin measuring forecast accuracy, evaluate performance to forecast and budget, and ultimately decrease inventory levels.
Through comprehensive business process reengineering, a CPG Company can expect great business results in the year ahead.