Consumer products companies today are confronted with a set of growth obstacles from increasing input cost; customer price sensitivity and behaviors changes; margin continues to be squeezed due to competition.
Consumer products distributors needs re-engineer their supply-chain structure and strategies to tackle with external environmental changes to improve its competing capability and product margins.
In the shadow of the recent recession, many consumers have embraced frugality — some by necessity, some by choice. Changing in consumer behavior has significant impact on consumer product industry as consumers are more price conscious.
Online shopping is an emerging shopping channels that gaining its huge popularity among consumers. The online shopping platform allows consumer to compare product offering across hundreds of online shops. This set the challenges to consumer product companies with intensified competition on transparent pricing, product features.
Pricing has always been an area of focus for consumer products companies as they face a challenging of rising and volatile input costs. The accessibility and transparency of pricing information to consumers and shoppers; increased availability of low cost options, posing significant challenges in the way that consumer products companies have to re-think about their pricing strategy. To manage the increased complexity and margin pressures, the firms will increasingly be required to optimize procurement strategies, as well as to accommodate latest technological changes such as on-line shopping platform and marketing to maximize their sales channels and exposure to consumer market.
With its tough challenges in consumer product industry, the urgency of making changes of procurement structure and strategies is obvious. Continental Solution provides solutions to these challenges by leveraging supply chains and service providers to substantially reduce the overall sourcing cost and serve with our client's with confident results. There are examples of our management approaches to client's sourcing project:
Establishing suppliers bidding procedure
Suppliers performance evaluation framework
Cost analysis on individual sub-division of operation
Optimization cost & operation process
Evaluating alternatives and cost saving opportunities
Improving production productivity and sourcing cycle time
Sourcing performance is determined by accumulation of each sub-division operation execution to achieve most attainable results of strategic sourcing. It requires optimization of each cost-spending operation by consistent monitoring, analyzing and implementing optimization mechanism into operations.
It is important to overhaul the procurement structure that to simply the process and reduce the complexity and achieve operation efficiency and cost effectiveness. Structural changes may gain a tremendous competitive advantage, as it can improve a company’s resilience to changes and provide flexibility in responding to different scenarios.
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