Strategic sourcing in the Consumer Packaged Goods industry

Gain back margin through strategic sourcing

CPG companies operate in a very challenging and dynamic market space. Simultaneously, they must:

  • Meet the ever-changing needs of a wide-ranged customer base of millennials to seniors – who are striving to get the most value out of every dollar spent in a highly competitive environment
  • Stay ahead of their competitors throughout the marketplace – who are motivated, aggressive, and always willing to eat margin to win new accounts
  • Work collaboratively with suppliers and vendors – raw material providers, contract manufacturers, marketing and creative agencies, and retail business system and software providers – all of whom are looking to increase their fees and make their accounts more profitable

Many businesses in the CPG landscape, whether retailer or manufacturer, are properly focused, first and foremost, on their customer base and meeting their needs. This includes developing innovative and technologically advanced product lines, enhancing shopper experiences, and expanding into emerging markets. These initiatives foster brand loyalty, typically safeguard steady revenue growth, and potentially offset competitive advances. Despite the countless initiatives CPG companies put fourth, the increase in popularity of private brands and continued rising costs of production have cut into the bottom-line, driving profits down and decreasing available budget to invest in future, innovative products.

Corcentric provides CPG companies with the industry knowledge and sourcing expertise needed to reduce costs, enhance or foster new supplier partnerships, and increase transparency and control of your bottom-line. These strategic initiatives are performed via an adaptable, flexible suite of procurement outsourcing, market research, and spend management services. We offer subject matter expertise, streamlined processes, and decades of strategic sourcing experience to quickly identify opportunities for spend reduction, scope of work value additions, and benchmarking exercises on your behalf to ensure identified opportunities translate into tangible savings. For CPG retailers and manufacturers, Corcentric is a one-stop-shop with the ability to manage 100 percent of internal and external spend categories.

Direct expenditures for Consumer Packaged Goods manufacturers

Within the CPG industry, the highest areas of expenditure include raw materials along with contract manufacturing and contract packaging. While these spend categories represent the biggest expenditures for any CPG company, they are also those with the lowest margin and come with a high cost of change. When considering cost reduction in these areas, it is important to identify the right opportunities for sourcing, before you begin to invest time and effort into a project where change is not possible or costs are already as low as they can be. Corcentric’s strategic sourcing experts are well experienced in helping companies benchmark their spend, allowing them to follow only the path that leads to maximum potential savings in the shortest amount of time.

Let Corcentric’s team of experts help you find the right opportunities in these areas of direct expenditure:

Indirect expenditures for Consumer Packaged Goods manufacturers

The most substantial indirect expense for CPG companies, by far, is marketing and advertising. The joint imperatives to solidify brand loyalty and maintain or expand market share makes continued investment into marketing and advertising necessary. At Corcentric, our strategic sourcing resources include dedicated marketing subject matter experts that can help your internal marketing and advertising groups get the greatest ROI from their budgets. Our portfolio of strategic sourcing and value identification services allow your internal marketing resources to focus on strategy while we keep costs in line. Our strategic sourcing team understands what is important to marketing, and works closely with them to ensure they get the most value out of their supplier relationships.

Keeping track of consumer demographics, activities, preferences, and needs are an important factor when deploying marketing/communication initiatives while simultaneously providing the same look and feel throughout each customer-facing platform. Corcentric  provides industry knowledge and sourcing expertise in customer-centric platforms to ensure your consumer’s needs are being met and your platforms are producing the same message throughout while maintaining a high uptime metric. We provide experience with the following platforms and integrations:

  • CRM Platforms
  • Customer Loyalty Platforms
  • POS Systems
  • Order Management Systems
  • Call-Centers/Customer Service Operations
  • Administrative Interface Platforms
  • Software Integrations
  • SaaS & Cloud Services
  • E-Commerce Platforms (Web Optimized Solutions)
  • Mobile Application & Integration

Corcentric’s strategic sourcing experts can help your company reduce costs and improve supplier relationships in marketing, as well as these other areas of indirect spend:

Corcentric’s team of strategic sourcing experts can help your organization make the right decisions when it comes to spending – allowing you to refocus on product innovation and gaining a competitive advantage in the marketplace. We can assist in all aspects of vendor cost reduction, from opportunity identification, to strategic sourcing, to contracting best practices, to implementation, and supplier relationship management.

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Since 1996, Corcentric has provided customers a competitive advantage with the expertise of our team and advanced capabilities—and consistently earning industry recognition for it.

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