Consumer Packaged Goods (CPG) companies today face mounting pressure to scale operations while maintaining sustainability. The dual demands of scalability and sustainability are not just operational challenges; they are essential to remaining competitive in the modern market. Delve into the causes behind the need for scalability and sustainability, the consequences of neglecting these aspects, and how digital transformation can serve as a pathway to success.
Understanding the Causes Behind the Need for Scalability and Sustainability
Market Dynamics and Consumer Expectations
The CPG industry is experiencing rapid growth fueled by changing consumer preferences and market dynamics. Consumers are becoming increasingly aware of sustainability issues and these socially conscious buyers demand transparency regarding the origin of products and production practices. These expectations necessitate that brands not only scale their operations but also do so in an environmentally conscious manner. According to recent research, over 70% of CPG companies have adopted advanced traceability systems to enhance supply chain transparency and ensure product safety.
Regulatory Compliance
As CPG companies expand, they encounter a complex web of regulatory requirements that differ across regions. Compliance with these regulations is essential for market access and mitigates legal risks. Advanced compliance management systems integrated with ERP solutions can monitor regulatory changes in real time, ensuring continuous compliance with staggering accuracy. Companies that fail to comply may face costly penalties, reputational damage, and barriers to entry in key markets.
Supply Chain Efficiency
Effective traceability systems are crucial for maintaining product quality and safety, particularly as CPG companies scale their operations. Companies utilizing comprehensive traceability systems report a 30-40% reduction in product recalls due to improved identification and resolution of issues. Efficient recall management is critical for minimizing risks and financial losses. Moreover, transparency fosters consumer trust, which is essential for brand loyalty.
Resource Management and Environmental Responsibility
With growing awareness of environmental sustainability, companies must also focus on resource management. Regular upgrades to existing systems can enhance sustainability by improving resource efficiency and reducing waste. Technological upgrades that emphasize sustainability can lead to a 30-35% reduction in a company’s environmental impact, contributing to long-term sustainability goals.
The Results of Neglecting Scalability and Sustainability
Operational Inefficiencies
Neglecting scalability can result in operational bottlenecks and inefficiencies that hinder growth. Companies may struggle to keep up with demand, leading to increased costs and missed opportunities. Without a scalable solution, CPG companies risk stagnation or decline.
Increased Recall Costs
Failure to implement effective traceability and recall management can lead to substantial financial losses. Companies that do not prioritize traceability may face product recalls that are not only costly but can also damage their reputation. Efficient recall management can save companies up to 20% in recall-related costs, including legal fees and lost sales.
Legal Risks and Market Barriers
Without a robust compliance management system, companies expose themselves to legal risks that can severely impact their operations. Regulatory penalties can be costly and lead to a loss of consumer trust, further complicating efforts to scale. In today’s global marketplace, non-compliance can also limit access to lucrative markets, hampering growth potential.
Environmental Impact
Ignoring sustainability can also lead to increased waste and a negative environmental footprint. Companies that fail to invest in sustainable practices may not only face backlash from consumers but also increased operational costs associated with waste management and resource inefficiencies.
Embracing Digital Transformation
Digital transformation is the key to navigating the challenges of scalability and sustainability in the CPG sector. Here are several ways that companies can leverage digital transformation to address these needs:
- Implementing Advanced ERP Systems: Advanced ERP systems like SAP Business One are pivotal for optimizing resource management and improving supply chain efficiency. These systems provide actionable insights that are crucial for scaling operations. As companies grow, an ERP system allows them to add new modules and features without disrupting existing operations, ensuring smooth scalability. Real-time analytics and reporting capabilities empower businesses to make informed decisions that support efficient scaling.
- Enhancing Traceability and Recall Management: Effective traceability systems are essential for maintaining product quality and ensuring compliance. Companies that adopt advanced traceability systems can minimize risks and build consumer trust. By integrating traceability with ERP solutions, CPG companies can efficiently manage recalls and enhance product safety.
- Streamlining Compliance Management: A strong compliance management system is crucial for tracking regulatory requirements and ensuring adherence. Integrating compliance management with ERP systems like SAP Business One allows for real-time monitoring of compliance standards, reducing the risk of legal issues and enhancing market access.
- Upgrading Legacy Systems: Regular upgrades to existing systems are vital for handling operational complexity as companies scale. Transitioning from on-premise systems to cloud-based solutions can improve sustainability by reducing energy consumption and waste. This also allows companies to utilize their technology resources and capital for tasks that add value rather than allowing them to get bogged down in administrative maintenance.
Leveraging Third Wave and SAP for Success
An ERP solution like SAP Business One can significantly facilitate the move to digital transformation for CPG companies focused on scalability and sustainability. By integrating various business processes—such as inventory management, compliance tracking, and financial reporting—SAP Business One provides a comprehensive view of operations. This centralized system enables real-time data analytics, allowing businesses to make informed decisions quickly and adapt to changing market conditions.
Trusted partners like Third Wave play a crucial role in guiding companies through the implementation of SAP Business One. With their industry expertise, understanding of the CPG landscape, and digital solutions like Versago and Bizweaver, Third Wave ensures that businesses are well-equipped to streamline operations, enhance data integration, and successfully navigate their scalability and sustainability efforts.
- Bizweaver – Bizweaver automates processes and streamlines production management by synchronizing workflows across the organization. It serves as a hub for all the transaction information flowing in and out of your business.
- Versago – Versago streamlines digital communication by connecting departments, channels, partners, employees, and locations with SAP Business One data. It gives you the flexibility to streamline collaboration and address specific issues with optimization, resource allocation, and more.
Striking the balance between scalability and sustainability is central to the success of CPG companies in today’s market. By understanding the needs behind these efforts and the consequences of neglecting them, brands can position themselves for growth and resilience. With the right tools and partnerships, companies can master the complexities of scalability and sustainability. Connect with Third Wave today to pave the way for long-term success in an increasingly conscientious marketplace.
Mastering CPG Challenges: Navigating Scalability and Sustainability
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In recent years, the Direct-to-Consumer (D2C) model has gained unprecedented traction within the Consumer Packaged Goods (CPG) industry. This paradigm shift is reshaping the way brands interact with consumers, compelling businesses to rethink their strategies and operations. Understanding the causes behind this rise, the results it generates, and the digital transformation solutions available is essential for CPG companies to thrive in this new landscape.
Understanding the Causes of the Rise of D2C in the CPG Industry
Shifting Consumer Preferences
The emergence of eCommerce and changing consumer behaviors have significantly contributed to the rise of D2C. Consumers today seek convenience, personalized experiences, and greater control over their shopping journeys. As a result, many brands are opting to establish their own eCommerce platforms to connect directly with customers. According to a recent study, over two-thirds of consumer product companies struggle with limited data and analytics capabilities, which hampers their ability to accelerate consumer engagement models like eCommerce. However, those that invest in robust D2C platforms can gain invaluable consumer insights and create strong loyalty programs.
Direct Consumer Insights
The D2C model allows companies to gather and analyze data across the consumer journey. This direct access to consumer insights enables brands to understand purchasing behaviors, preferences, and trends, informing product development and personalized marketing strategies. Building a comprehensive view of the consumer through omnichannel engagement and advanced analytics is now more crucial than ever.
Cost Savings and Increased Margins
Another compelling reason for the D2C trend is the potential for significant cost savings. By bypassing traditional distribution partners, manufacturers can save around 15% from wholesalers and up to 40% from retailers. This not only provides greater control over pricing and promotions but also positively influences profit margins. While the customer acquisition and marketing costs associated with D2C can be higher, the overall financial benefits are substantial.
The Benefits (and Potential Challenges) of Effective D2C
By prioritizing direct engagement with customers, businesses can enhance customer satisfaction, promote cost and fulfillment efficiency, and empower companies to make informed decisions and quickly adapt to consumer trends. Embracing D2C can transform not just the customer experience, but the overall CPG business landscape. However, this shift in dynamics can create rifts within established retail partnerships and may lessen the bargaining power of CPG when negotiating future contracts.
Enhanced Customer Satisfaction
Direct interaction with buyers enables brands to receive immediate feedback, which can be leveraged to improve products and services rapidly. This responsiveness contributes to 30% higher customer retention rates compared to traditional retail models. D2C companies prioritize customer-centric cultures that enhance the overall experience, resulting in greater trust and loyalty.
Cost and Fulfillment Efficiency
By eliminating intermediaries, brands can save on costs associated with wholesalers and retailers, leading to better margins. However, they must also invest in efficient logistics and supply chain management to ensure timely and accurate fulfillment. This includes optimizing warehousing, inventory management, and last-mile delivery. Companies can significantly improve efficiency by integrating technology for inventory tracking, order management, and real-time analytics.
Real-Time Data Access
Real-time data access provides brands with visibility into inventory levels, helping them optimize stock management. Companies using real-time data for supply chain management report a 25% reduction in delivery times, which enhances customer satisfaction and loyalty. Real-time inventory tracking can also reduce stockouts by 30% and overstock situations by 20%, leading to more efficient inventory management.
Channel Conflicts
As brands increasingly adopt D2C models, they face potential conflicts with traditional retail partners. Effective management of these conflicts is critical. Companies must establish clear boundaries and strategies that ensure D2C efforts complement rather than compete with retail channels. Offering unique value propositions—such as exclusive products, personalized services, or subscription models—can help differentiate D2C offerings while maintaining healthy retailer relationships.
Embracing Digital Transformation
To navigate the complexities of the D2C landscape, CPG companies must embrace digital transformation. Here are some strategies that can alleviate the challenges associated with this shift:
- Invest in Robust Technology: Building a strong technological infrastructure is essential for D2C success. Brands need to invest in advanced eCommerce platforms that support scalability, data analytics, and seamless integration across touchpoints. By leveraging technology, companies can streamline operations and improve customer interactions, ultimately enhancing the D2C experience.
- Technology and Strategic Partnerships: Successful D2C transitions necessitate investment in the right technology and resources. Brands must develop robust eCommerce platforms, implement advanced data analytics, and ensure seamless integration across various digital touchpoints. Partnering with third-party technology providers can accelerate this process and reduce initial capital expenditure. An agile, test-and-learn approach allows companies to adapt quickly to market changes and consumer feedback, ensuring continuous improvement and innovation.
- Enhance Data Capabilities: Developing advanced data capabilities allows brands to build a comprehensive view of consumer behavior. By harnessing real-time data, CPG companies can make informed decisions and respond quickly to changing market conditions. Investing in data management tools can enable brands to improve consumer engagement models and drive effective marketing strategies.
- Optimize Logistics and Fulfillment: Efficient logistics and fulfillment are critical for D2C success. Companies must focus on optimizing warehousing, inventory management, and last-mile delivery to ensure timely and accurate fulfillment. Forming strategic partnerships with third-party logistics providers can help brands scale their fulfillment operations without significant capital investment.
- Foster a Customer-Centric Culture: D2C companies often thrive on customer-centric cultures that prioritize consumer needs and preferences. By actively engaging with customers and building community, brands can cultivate stronger relationships that lead to increased loyalty and satisfaction. A focus on providing exceptional customer experiences is paramount for long-term success in the D2C space.
Leveraging Third Wave and SAP for Success
An ERP solution like SAP Business One can significantly facilitate the move to digital transformation for CPG companies navigating the D2C landscape. By integrating various business processes—such as inventory management, customer relationship management, and financial accounting—SAP Business One provides a comprehensive view of operations. This centralized system enables real-time data analytics, allowing businesses to make informed decisions quickly and adapt to changing market conditions.
Trusted partners like Third Wave are instrumental in guiding companies through the implementation of SAP Business One. With extensive industry expertise and deep understanding of the CPG landscape, Third Wave’s airtight implementation process and digital solutions like Versago and Bizweaver ensure that businesses are well-equipped to successfully navigate the D2C surge.
- Bizweaver – Bizweaver automates processes and streamlines production management by synchronizing workflows across the organization. It serves as a hub for all the transaction information flowing in and out of your business.
- Versago – Versago streamlines digital communication by connecting departments, channels, partners, employees, and locations with SAP Business One data. It gives you the flexibility to streamline collaboration and address specific issues with optimization, resource allocation, and more.
The rise of the D2C model presents both opportunities and challenges for CPG companies. By understanding the causes behind this shift and embracing digital transformation, businesses can position themselves to thrive in the D2C landscape. With the right tools and partnerships, CPG companies can master the complexities of D2C and capitalize on the opportunities it presents. Connect with Third Wave today to explore how SAP Business One can ensure long-term growth and profitability for your business in an increasingly competitive market.
Mastering CPG Challenges: Navigating the Rise of Direct-to-Consumer (D2C)
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ECommerce has emerged as a double-edged sword in the ever-evolving landscape of Consumer Packaged Goods (CPG). While it presents vast opportunities for growth and engagement, it also introduces significant complexities that can hinder success. As CPG companies strive to adapt to the demands of digital commerce, understanding the intricacies of eCommerce is vital. Explore the complexities of eCommerce, the consequences of ineffective channels, and understand how digital transformation can illuminate the path to success.
Understanding the Complexities of eCommerce in the CPG Industry
Omnichannel Strategy
The rise of eCommerce has made adopting an omnichannel strategy increasingly critical for CPG companies. An omnichannel approach integrates multiple sales channels—both online and offline—to create a seamless and consistent customer experience. According to KPMG, companies that implement omnichannel strategies report a staggering 30% higher lifetime value from omnichannel shoppers compared to single-channel shoppers. This integration not only enhances customer satisfaction but also ensures that brands can effectively fulfill orders from the most appropriate location, whether it be a warehouse, a retail store, or a third-party provider.
Effective omnichannel engagement involves leveraging various touchpoints, from websites and mobile apps to in-store experiences. Brands that can interact with customers through multiple channels increase their chances of conversion and loyalty, with studies showing that omnichannel customers spend 15-30% more than those who shop through a single channel.
Data Integration
Another significant complexity arises from data integration. Creating comprehensive customer profiles requires merging data from different touchpoints, such as eCommerce platforms, in-store purchases, and customer service interactions. This integration allows CPG companies to offer highly personalized experiences tailored to individual customer preferences. According to McKinsey, brands leveraging integrated data for fulfillment operations report a 25% improvement in order accuracy and a 20% reduction in delivery times, demonstrating how effective data utilization can enhance operational efficiency.
Product Catalog Management
Effective catalog management is vital for enhancing the customer shopping experience – especially when 75% of consumers expect consistent product information across multiple channels. A well-organized and updated product catalog ensures that customers can easily find the information they need, such as product specifications, prices, and availability. Brands that utilize automated catalog management tools experience a 30% reduction in manual errors and a 25% increase in operational efficiency.
Implementing a centralized Product Information Management (PIM) system allows brands to manage product information from a single source, ensuring consistency across all eCommerce platforms. Regular audits help identify inconsistencies, outdated information, and errors, maintaining the catalog’s accuracy and relevance.
Channel Conflicts
Channel conflicts are another significant issue in the CPG eCommerce landscape. Conflicts arise when brands sell through multiple distribution channels—such as direct-to-consumer (D2C), traditional retail stores, and third-party online marketplaces—that compete against each other. Up to 25% of CPG companies experience conflicts due to inconsistent promotional strategies across different retail partners, and according to Sutherland Global, 30% of consumers encounter pricing discrepancies between a brand’s D2C site and third-party marketplaces, which leads to confusion and dissatisfaction among customers. Addressing these conflicts is essential for maintaining healthy relationships with retail partners and ensuring customer loyalty.
The Results of Ineffective eCommerce Channels
The complex challenges posed by the modern eCommerce landscape can lead to significant negative outcomes for CPG companies who lack the proper tools. Here are some of the critical consequences of having ineffective eCommerce channels:
Increased Operational Costs
Complexities in managing multiple sales channels can lead to inefficiencies and increased operational costs. Ineffective data integration and poor product catalog management may result in higher error rates, which in turn require additional resources to rectify. This inefficiency can severely strain profit margins, especially in a market where cost control is paramount.
Customer Dissatisfaction
When brands fail to provide a consistent and seamless shopping experience, customer dissatisfaction is inevitable. Inconsistent product information, pricing discrepancies, and fulfillment errors can frustrate customers, leading them to seek alternatives. As CPG companies aim to build long-term relationships with consumers, maintaining trust is crucial.
Lost Revenue Opportunities
Ineffective eCommerce strategies can result in lost revenue. A disjointed approach may lead to abandoned shopping carts, decreased conversion rates, and ultimately, lost sales. In the highly competitive eCommerce environment, every missed opportunity can have a substantial impact on the bottom line.
Erosion of Brand Loyalty
When customers encounter channel conflicts—such as inconsistent pricing or promotions—they may become disillusioned with the brand. As they shift their loyalty to competitors, the long-term ramifications can be detrimental. Erosion of brand loyalty not only affects current sales but can also hinder future growth potential.
Embracing Digital Transformation
To avoid these eCommerce pitfalls, CPG companies must embrace digital transformation. This involves adopting technologies that enhance visibility, improve data integration, and streamline operations. Here are several key strategies for successful digital transformation:
- Unified Data Management: Implementing a unified data management system allows CPG companies to integrate data from various channels, creating a comprehensive view of customer interactions. This integration enables brands to offer personalized experiences and make informed decisions based on real-time insights.
- Centralized Product Information Management: Investing in a centralized PIM system can help brands manage product information efficiently. By ensuring consistency across all eCommerce platforms, companies can enhance the customer experience and improve conversion rates. Regular audits and updates are essential for maintaining accuracy and relevance in product information.
- Streamlined Order Fulfillment: An efficient order fulfillment strategy is critical for delivering exceptional customer experiences. Brands should leverage technology to optimize inventory management, ensuring that products are readily available and orders can be fulfilled from the most appropriate location. This approach can reduce delivery times and improve order accuracy, driving customer satisfaction.
- Enhanced Customer Engagement: Leveraging multiple touchpoints for customer engagement can lead to increased conversion rates. By utilizing online channels, mobile apps, and in-store experiences, brands can create a holistic shopping experience that fosters loyalty. Engaging customers through various channels increases the likelihood of conversions and encourages repeat business.
Leveraging Third Wave and SAP for Success
An ERP solution like SAP Business One can be a game-changer for CPG companies navigating the complexities of eCommerce. By integrating business processes like inventory management, customer relationship management, and financial accounting, SAP Business One provides a comprehensive view of operations. This centralized system enables real-time data analytics, allowing businesses to make informed decisions quickly and adapt to changing market conditions.
Trusted partners like Third Wave play a crucial role in facilitating this digital transformation journey. With their industry expertise and understanding of the CPG landscape, Third Wave leverages the capabilities of SAP Business One and other digital solutions like Versago and Bizweaver to ensure that businesses are well-equipped to streamline operations, enhance data integration, and navigate the complexities of eCommerce successfully.
- Bizweaver – Bizweaver automates processes and streamlines production management by synchronizing workflows across the organization. It serves as a hub for all the transaction information flowing in and out of your business.
- Versago – Versago streamlines digital communication by connecting departments, channels, partners, employees, and locations with SAP Business One data. It gives you the flexibility to streamline collaboration and address specific issues with optimization, resource allocation, and more.
As CPG companies face the challenges of eCommerce complexity, embracing digital transformation is essential for survival and growth. With the right tools and partnerships, CPG businesses can not only overcome the challenges posed by eCommerce but also seize the opportunities it presents. Connect with trusted partners at Third Wave to master the intricacies of eCommerce and thrive in an increasingly competitive market.u master the challenges of your supply chains and emerge stronger.
Mastering CPG Challenges: Navigating eCommerce Complexity
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In the fast-paced world of Consumer Packaged Goods (CPG), supply chain disruptions have become a pressing challenge that companies must confront. These interruptions can arise from various factors, including natural disasters, geopolitical tensions, and logistical inefficiencies, leading to significant consequences for product availability and business operations. Delve into the causes and effects of supply chain disruptions in the CPG industry and explore how digital transformation—specifically through technologies like ERP—can serve as a solution.
Understanding the Causes of Supply Chain Disruptions in the CPG Industry
Natural Disasters and Geopolitical Tensions
Natural disasters such as hurricanes, floods, and earthquakes can wreak havoc on supply chains, causing delays and stockouts. Similarly, geopolitical issues like trade wars, international conflicts, and more recently, the longshoremen strike can result in port closures and increased tariffs, further complicating the movement of goods. These logistical challenges can result in longer lead times for production and fulfillment, which ultimately have negative financial implications.
Inefficient Inventory Management
Product availability is crucial for meeting customer demands, and disruptions can lead to costly stockouts. Traditional inventory management systems may struggle to provide the real-time visibility necessary for effective decision-making. According to a study from Fictiv, 55% of manufacturing-related businesses cite improving supply chain visibility as a top priority, emphasizing the need for better tracking of goods and supplier readiness forecasting to mitigate disruptions.
Importing, Customs, and Duties
The CPG industry heavily relies on imported raw materials and finished products. Disruptions in global supply chains can lead to delays in customs processing and unexpected tariffs, which can significantly increase costs. As tariffs fluctuate, companies must adapt their pricing strategies to maintain competitiveness. A staggering “50% of senior executives” across various industries reported that their companies are passing higher supply chain costs onto consumers, further complicating the landscape.
The Results of Supply Chain Disruptions
The implications of supply chain disruptions are far-reaching and multifaceted. Companies may experience financial costs, opportunity costs, and even reputational costs.
Customer Experience Impact
Stockouts can lead to dissatisfied customers and lost sales. A seamless supply chain is essential for meeting consumer expectations, particularly in an era where same-day or next-day delivery has become the norm. If a customer cannot find a product when they need it, they may turn to competitors.
Increased Operational Costs
Supply chain disruptions often lead to increased costs associated with transportation, storage, and procurement. For instance, during significant disruptions, transportation costs can surge due to delays and rerouting. Companies may also feel the need to maintain larger inventory buffers, which can tie up capital and reduce liquidity. This is a precarious issue as “national storage pricing has increased by 1.4% month-over-month,” intensifying the cost implications of holding excess inventory. Therefore, effective cost management becomes critical for maintaining profit margins.
Erosion of Competitive Advantage
CPG companies that fail to adapt quickly to supply chain challenges risk losing their competitive edge. The shift toward eCommerce means that consumers have more choices than ever, making it essential for companies to maintain product availability and efficient delivery in order to retain customers.
Embracing Digital Transformation
To navigate these complexities and alleviate the pains of supply chain disruptions, CPG companies must embrace digital transformation. This includes adopting technologies that enhance visibility, improve forecasting, and streamline operations. Here are several key components of a successful digital transformation strategy:
- Enhanced Visibility and Real-Time Analytics: Digital tools that provide real-time insights into inventory levels and supply chain performance can significantly improve decision-making. Companies should leverage technologies like the Internet of Things (IoT) for enhanced visibility, allowing them to monitor goods in transit and anticipate potential disruptions.
- Advanced Forecasting Techniques: Utilizing Artificial Intelligence (AI) for predictive analytics can help CPG companies better understand demand patterns and adjust production schedules accordingly. A survey found that approximately 85% of leaders in supply chain and manufacturing plan to adopt AI technologies to bolster resilience and efficiency.
- Centralized Product Information Management: Product Information Management (PIM) systems play a critical role in ensuring that accurate product data is available across all channels. By centralizing product information, companies can reduce discrepancies that may arise from manual data entry, ensuring compliance and facilitating smoother operations. The implementation of PIM systems can lead to improved inventory accuracy rates, which is crucial during disruptions.
- Effective Cost Accounting: A dynamic and flexible approach to budgeting is essential in the volatile landscape of CPG. Accurate cost accounting provides the data needed to make informed strategic decisions, such as diversifying suppliers or optimizing inventory levels. This adaptability can help companies navigate unexpected financial pressures and maintain profitability. In fact, companies using advanced cost accounting techniques have reported a 30% improvement in budget accuracy during disruptions, demonstrating the importance of adaptability in financial planning.
Leveraging Third Wave and SAP for Success
An ERP solution like SAP Business One can significantly facilitate the digital transformation journey for CPG companies. By integrating various business processes, including inventory management, financial accounting, and customer relationship management, SAP Business One offers a comprehensive view of operations. This centralized system enables real-time data analytics, allowing businesses to make informed decisions quickly.
Having a trusted partner like Third Wave is paramount for companies navigating the ERP implementation process. With industry expertise and a deep understanding of the CPG landscape, Third Wave specializes in leveraging SAP Business One and other digital solutions like Versago and Bizweaver to help businesses streamline operations, enhance supply chain visibility, and improve overall efficiency. This support from trusted advisors ensures that CPG companies are well-equipped to handle the challenges posed by supply chain disruptions.
- Bizweaver – Bizweaver automates processes and streamlines production management by synchronizing workflows across the organization. It serves as a hub for all the transaction information flowing in and out of your business.
- Versago – Versago streamlines digital communication by connecting departments, channels, partners, employees, and locations with SAP Business One data. It gives you the flexibility to streamline collaboration and address specific issues with optimization, resource allocation, and more.
- Container Management – The process of managing multiple shipments across various suppliers to ensure compliance with international trade regulations can be intricate. SAP Business One streamlines this complexity by centralizing documentation, automating customs procedures, and providing real-time visibility into shipment statuses. This enables businesses to track goods from origin to destination, minimizing delays and optimizing logistics.
While supply chain disruptions continue to present formidable challenges for CPG companies, the ability to adapt and respond to disruptions is more critical than ever. By embracing digital transformation strategies and leveraging emerging technologies, companies can navigate these challenges more effectively. Connect with Third Wave today to explore how SAP Business One can help you master the challenges of your supply chains and emerge stronger.
Mastering CPG Challenges: Navigating Supply Chain Disruptions
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In this article, we highlight an operational challenge one of our customers faced, and share details into how our Versago portal for SAP Business One can help to solve these common challenges.
Business Challenge: Improving order cycle time for multi-level purchasing approvals
As brands grow, business process optimization plays an increasingly important role in maximizing business efficiency and profitability. Purchase Requisitions can become increasingly complex with multi-level approvals. The process to obtain all approvals can vary depending on the amount, the item, or the person that placed the order and include different people for approvals along the way. From the time purchase requests are placed to the time that each stakeholder has reviewed and approved them, a lot could go astray. What if an approver is on vacation? What if a request sits unread in a physical or email Inbox? These are only a couple of ways in which the process breaks down. Then what happens? Delays, confusion, and excessive and time-consuming communications to try to figure out the status of a purchase order. Or maybe it doesn’t get figured out and the business impact is felt downstream in the form of materials, supplies, and inventory shortages.
Versago Solution: Advanced Purchase Order Approval Workflow Within SAP B1
The Versago portal enabled our client to configure a solution where users in different roles can easily and securely submit, review, update, and approve purchase requests incorporating varying approval processing steps and rules. With Versago, the purchase request is entered into a simple and secure form accessible to 160 employees that can place a request at any time. Based on the authorization rules, when a request is entered the approval process can take from 1 to 4 approvals depending on the requester, amount, item, or service. Approvers are notified via email or text message one at a time and have the ability to review, update, and approve the requests on any device via the portal. When the request is fully approved, Versago’s process automation module, BizWeaver, creates either a purchase request or a purchase order in SAP Business One. This eliminates the need for double-entry and manual work on the purchasing team.
Digital Transformation in Sync with SAP Business One
Third Wave worked with the client to shape smooth employee journeys on any device, making it easy for the purchasing team to speed up purchase order cycle time and goods receipts. The final solution consists of two simple entry forms for initiating and approving requests, and two reports for reviewing incoming and historical requests. Plus, the Bizweaver connector workflows automatically send an email to the next approver and update SAP Business One with the final purchase requests.
A case of ROI in under a month
The client estimated the hard cost of this process to be about $32,000 per month! That’s $50 per order times 650 orders per month. Also, delays were inherent to the process at a cost of about $1000 per experiment.
Today, employees involved in the approval process receive purchase order requests on any device and can securely approve the orders with a click at any time.
The streamlined process reduced the costs of maintenance and administration in SAP Business One and helped the purchasing team improve their performance on cycle time while speeding up goods and receipts.
About Versago Platform
Versago is a web and mobile platform integrated with SAP Business One enabling the broader population of people and processes across a business’ ecosystem to leverage the power of SAP for every function supporting growth and operating efficiency.
Versago is easily configured to support multiple use-cases to grow your business. With its extensive library of pre-built functionality and workflows already integrated with SAP Business One, your business can be up and running in less than a day with no software development required.
Benefits of Versago & SAP Business One:
– People and Processes Always In-Sync with SAP Business One
– Simple User Experience, Low/ No Training
– One Configurable Platform vs. Multiple Apps
– Streamlined Processes with no SAP Manual Data-Entry Bottlenecks
– Paperless Processes
– Faster Customer <> Supplier Interactions
– Branded to Reflect Your Business
– Increased Customer Satisfaction with Digital Solutions
To learn more about Versago and start the journey towards modern operations management for business growth, schedule a custom demo with a SAP Business One expert today.
SAP Business One Automation of Purchase Orders for the Consumer Products Industry
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An ERP implementation can be one of the most complex projects a company may undertake, with consequences that can impact the entire organization. Developing a CPG ERP implementation plan is a vital step in the process, helping your company to minimize disruption to employees and get the system up and running as quickly as possible.
For companies in the Consumer Packaged Goods (CPG) industry, the business environment is continually evolving. An ERP solution must be adaptive enough to meet changes dictated by a global supply chain, direct to consumer sales and direct to consumer drop shipments and increasing trading partner demands to remain competitive.
The most valuable benefit is how an organization-wide ERP deployment links disparate business functions together throughout a company. For example, SAP Business One can streamline operations through process integrations and automation to manage today’s purchase-to-pay and order-to-cash processes.
SAP Business One offers the flexibility to accommodate the unique needs of an organization, with the ability to adapt to changes within the company, the business, or the ecosystem.
Tailoring CPG ERP Implementation For CPG Businesses
Enterprise CPG companies have unique business challenges that an ERP solution like SAP Business One is well-suited to solve. Since eCommerce and EDI play a significant role with CPGs, an ERP solution can help through integration and process automation that enforces the rules of multiple order-to-cash and purchase-to-pay processes, resulting in greater transaction throughput with fewer people, greater accuracy, and reduced chargebacks.
A goal of a CPG’s ERP implementation is integration with the eCommerce platform. This integration automatically pulls orders into the ERP system and pushes updates back to the eCommerce platform. EDI integration is the other must-have for consumer product companies.
Enterprise CPG companies must manage multiple sales channels: big-box retailers, specialty retailers, online marketplaces, B2B and B2C, eCommerce, and more. Many of these sales channels require EDI integration to facilitate the communication of Purchase Orders, Advanced Shipping Notifications, and Invoices. Managing different shipment configurations and options is also crucial.
While an ERP system can provide a company with many benefits, it’s critical that a detailed, organized plan is created to ensure a successful implementation and ongoing benefits. To ensure the success of your CPG ERP implementation and take full advantage of the benefits it provides, select a partner like Third Wave Business Systems with the knowledge, industry experience, and skill to help you create and execute a comprehensive implementation plan.
Third Wave’s ERP Implementation Process In Six Phases:
- Project Launch: Initial planning, agreement of project scope, and confirmation of the overall project structure. A high-level project plan will be completed, and a test system installed.
- Business Process Mapping: Outline existing business processes, introduce SAP Business One best practices, and modify the initial project plan if required. A detailed project plan is provided along with project team training.
- Build and Configure: Build and configure all business processes and technical requirements, and prepare the system to perform a proof of concept test.
- Testing: A series of test scripts will simulate the business while validating the application configuration in a non-production environment.
- Business Readiness: Assess system, staff, and organization readiness, staff readiness, with a final decision to move to production. End-user training is provided, along with a final cutover plan.
- Go Live: The client organization starts managing daily activities while the Third Wave team monitors the activities and provides support. The project is signed-off, and follow-up items are scheduled.
Third Wave’s many years of experience shows that a properly executed Testing Phase is key to a smooth transition to the Go-Live phase. Third Wave’s methodology, scope development, and project structure help to eliminate common problems like misaligned business processes, time overruns, unclear roles and responsibilities, and any other unwanted surprises.
Third Wave is a Gold Partner of SAP, the world leader in ERP software. As North America’s longest-standing SAP Business One partner, small to enterprise level businesses trust us to implement ERP solutions deployed on-premise and in the cloud with hands-on expertise every step of the way.
To learn more about how we enable companies to implement scalable ERP solutions, schedule a customized demo with a Third Wave expert today.
Developing an ERP Implementation Plan for Enterprise CPG Businesses
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