Case Study: Solving a $63M Problem at a Leading CPG Company

Challenge

A leading Consumer Packaged Goods (CPG) company faced significant challenges in its supplier management processes.

The existing system was inefficient. It relied heavily on manual data collection, resulting in poor visibility and inconsistent results.

This decentralized approach hindered the company’s ability to track supplier performance effectively. As a result, addressing critical issues and capitalizing on innovation opportunities was difficult.

One pressing issue was a $63 million problem related to pesticide management. The current risk solutions were inadequate for addressing this problem.

Company leadership also mandated driving more innovation from strategic suppliers. However, inconsistent scorecards and fragmented data made it nearly impossible to assess supplier performance accurately and identify areas for improvement.

The need to scale supplier performance participation across direct and indirect suppliers was increasingly evident. The decentralized process and lack of a standardized approach hindered the company’s ability to engage suppliers effectively, track performance, and drive the desired innovations.

Impact

The ramifications of these challenges were extensive, affecting various aspects of the company’s operations:

Poor Visibility and Data Quality: The manual data collection process led to fragmented and unreliable data, impeding the ability to make informed decisions.

Increased Labor Hours: Inefficiencies in data collection consumed significant labor hours, diverting resources from strategic activities.

Inability to Compare and Improve Supplier Performance: Lack of consistent scorecards prevented accurate comparison of supplier performance, hindering relationship development and continuous improvement.

Lack of Innovation: Inadequate tracking and engagement with suppliers stifled innovation within key categories.

Unresolved Risk Issues: The $63 million pesticide problem posed a substantial financial threat that the current solutions could not address.

Resolution

Recognizing the need for change, the company partnered with SupplyHive to embark on a comprehensive transformation of its supplier management processes.

Solutions

Supplier ratings, reviews, and scorecards (link)

Contract Compliance (link)

Segmentation & supplier rationalization (link)

Benefits to the customer

Rapid Supplier Launch: SupplyHive facilitated onboarding 220 suppliers in just two weeks, increasing supplier participation rates by 50%. This demonstrated the scalability of the new approach.

Standardized Processes and KPIs: With SupplyHive’s platform, the company implemented standardized processes and key performance indicators (KPIs), reducing labor-intensive manual processes and allowing employees to focus on high-value activities. Consistent KPIs ensured accurate measurement of supplier performance.

Solving the $63M Pesticide Problem: SupplyHive’s targeted solution successfully mitigated the pesticide issue, resolving the $63 million problem.

Cost Savings and Avoidance: SupplyHive’s streamlined processes and improved supplier engagement drove significant cost savings and avoidance.

Enhanced Innovation: SupplyHive’s platform enabled better engagement and standardized processes, fostering greater innovation. Strategic suppliers were more effectively leveraged for new product developments and improvements.

Implementation Details

The successful resolution involved several key steps and strategies facilitated by SupplyHive:

Assessment and Planning: A thorough assessment of existing processes identified critical areas for improvement, forming the basis for a detailed implementation plan.

Stakeholder Engagement: Engaging key stakeholders, including suppliers, employees, and leadership, ensured buy-in and support for the new approach.

Technology Integration: SupplyHive’s advanced technology solutions facilitated automated data collection, real-time tracking, and standardized reporting.

Training and Support: Comprehensive training and support from SupplyHive ensured a smooth transition, with ongoing assistance to address challenges.

Continuous Improvement: SupplyHive provided a framework for continuous improvement, regular performance reviews, and feedback from suppliers and employees to ensure the new processes remained effective and adaptable.

By transitioning to a standardized, technology-driven approach, the company resolved a critical $63 million pesticide problem. Additionally, the company achieved significant improvements in supplier participation, innovation, and cost savings.