The consumer products industry is consists of organizations that manufacture products that are used by the consumer.For our purposes, it can be described as enveloping practically every item an individual can purchase, especially in the areas of toiletries and cosmetics, appliances, electronics, food and beverage, and other generic household items.
Companies operating in this industry face numerous other challenges, including uncertain demand, shifting tastes, operating at a profitable level, changing standards and regulations, and relying on the global supplier network, among others. With the recent mega trend for consumer buying online or via smartphone shopping, we saw the rise of the mega shopping website that provide global delivery. That is further increase the competition for the local supplier require to compete with global scale.
The most pressing challenges for consumer products companies.
Changing Consumer Demands
Demand has a tendency to fluctuate rapidly. For example, consumer preferences have altered greatly in recent years as demand shifts toward healthier and sustainable options. Consequently, manufacturing success is closely related to time to market and new product introduction (NPI) capabilities. Additionally, demand can fluctuate cyclically and with economic volatility. The success and profitability of any organization in this industry is heavily dependent on how effective these companies are at addressing the changing demands of consumers. We saw the rise of smartphone mobile application and shopping website provide door to door delivery, that even provide geography location for product tracking, so buyer know exactly where their product is located and what is expected next step and activity that come next until they received the goods. It trend for order no just for physical goods, it use for home delivery foods as well as arranging for the taxi that changing the consumber behavior (CB) forever. Those changing on the consumer bahavior had the huge impact on the food & beverage (F&B), transportation, local and international retail trade.
Shrinking Operating Margins
As manufacturers need to ensure the delivery of high quality products while finding innovative ways to cut costs. Companies also need to account for fluctuations in factors such as oil prices and their effect on transportation costs or petrochemicals which may be used for chemicals and packaging. Replace human with the automated Internet of Things (IoT) device (such as smartphone mobile application for self services), will be rising and we can saw it in the heavy use across sector and industries to bring down the operation cost.
Compliance and Regulatory Pressures
The global regulatory environment is dynamic. Companies are faced with the challenges of mitigating operational risk and managing non conformance. Creating additional pressures, as manufacturers rely on the global supplier network to battle shrinking operating margins, meeting international compliance and regulations becomes a factor.
Leveraging the global supplier network is a means for reducing costs, however it does come with numerous risks in terms of compliance, product safety, and other areas.
Data Granularity and Visibility
With compliance and regulations becoming stricter, trace-ability functionalities are more pertinent and requisite than in the past. Consumer products companies need strong data granularity to reduce operational risk, properly respond to an adverse event with a targeted recall, provide high quality and compliant products.
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