Consumer Goods & Retail Consulting Services
Organizations producing, distributing, and making products available at retail points can be consumer goods companies or consumer packaged goods companies (CPG). Such companies could develop a constraint in areas like Internal Operations and Distribution, External Distribution, Sales Bandwidth, Retail Operations and New Product Development.
Internal Operations and Distribution
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Improve success rate of new introductions
Eliminate or reduce need for Inventory liquidation sales
Many consumer goods companies are faced with seemingly contradictory issues in the supply chain. Companies tend to have significant stockouts despite presence of high overall inventory, price pressure from the supply chain intermediaries even though price to the end consumer is unaffected, struggle with new product introductions/product freshness at retail points even as old products clog the pipeline. These problems can be attributed to a single source – incorrect timing of creation and movement of inventory. To resolve this issue, consumer goods manufacturers have tried to improve their forecasting methods and tools. Yet they never get it right. However, the solution to this problem lies in a different direction- in questioning the very need of forecasting.
We offer consulting services to consumer goods and retail companies to help them achieve 100% availability at less than half the inventory in the end-to-end supply chain.
For more information on how consumer goods and retail companies can prevent sales loss by ensuring availabilityRead More
Exponentially increase number of retailers covered by direct distribution
Sales growth higher than industry average
availability of relevant range at all billing/retail points
Distributor ROI of close to 60-80% compared to industry benchmarks of only 25-30%
Most consumer goods companies are unable to directly reach all retailers, especially small mom and pop stores and stores that are geographically spread out. To improve reach, such companies usually rely on distributers. However, most distributors tend to cherry-pick retailers in their areas basing their choice on cost of servicing the retailers. They leave out many retailers, unwittingly creating large reach-gaps in many of the companies’ territories. To plug the gap, consumer goods companies then turn to wholesalers. However, wholesalers exacerbate the problem rather than provide real reach. At a loss for ways to strengthen presence in hard-to-reach territories, consumer goods companies often accept the longstanding woe of inadequate reach as ‘unsolvable’.
Vector Consulting helps consumer goods companies to identify highly cost-effective ways of servicing every retail point. Deploying this strategy, companies can strengthen reach with a single-tier distribution network.
Know more about Vector Consulting company’s Go-To-Market strategy that has helped several consumer goods companies to reach out to all potential retailers.Read More
Increase in sales capacity
Maximize retail penetration
Implementation of TOC systems in internal and external distribution of consumer goods companies, creates a situation where movement of inventory is on auto-pilot. In this new scenario, the sole option by which sales team can increase sales is by focusing on retail points. However, then the load on sales team goes up many folds. The only way to deal with this emergent constraint is to release capacity of sales team and use new methods, structure and processes to effectively identify resolve issues impacting demand at retail points.
To know more about Vector Consulting’s solution for exploiting sales team capacity and to find out how consumer goods companies can profitably reach out to all potential retailers, visit :Read More
Growth in same store sales
improvement in inventory turns
Increase gross contribution per unit of retail shelf space
Improve display and freshness of stocks on retail shelf space
Consumer goods companies having their own retail business are typically constrained by shelf-space (or working capital). The speed of inventory rotation on shelf space limits the ability of a retail business to make more money. Shelf space of retail stores is, in many cases, occupied by significant quantity of slow-moving stock. At same time, there is stock out of popular products. Together, the impact is sales loss and poor inventory turns for retail outlets.
We offer consulting services to help our clients in the retail business to significantly increase the rate of sales and, simultaneously, release capital for store expansion.
Companies in the retail business have used Vector Consulting’s end-to-end processes of rapid pull replenishment and rapid replacement to solve the problem of stock outs and slow-moving stocks (without hurting their bottom-line).Read More
New Product Development
Reduced project lead time
Increased output from existing resource base
Reduce rework & improved quality of output
Rapid production stabilization
Improved rate of success of launches
Reduced stress on people and other resources
After a consumer goods company acquires a lean and agile distribution and supply chain that is capable of delivering high ROI for trade partners, it can experience the next level of constraint in its ability to launch new products. Companies that make new products are often cluttered with far too many projects; their environments suffer a host of issues such as frequent priority conflicts, rework, delays in production stabilization, and, eventually, delays in launch.
Vector Consulting uses flow principles of TOC to help consumer goods companies increase speed of projects, and, simultaneously, release substantial capacity.
Know more about Vector’s consulting services which enable NPD organizations to permanently cure problems such as chronic delays and low output.Read More
View these videos to challenge some of the entrenched best practices in the consumer goods industry, to understand the chronic problems these practices have created, and to find a radically new perspective.
Does setting targets have a negative impact on sales of a company?
At Vector Consulting, we believe that the customary practice of setting sales targets holds back companies from realizing the full sales potential of their markets. Find out why.
Do "Trade Schemes" jeopardize the sales of your company?
In our consulting practice, we have repeatedly seen that volume-based schemes (in the distribution channel) can limit a consumer goods company’s reach and range availability in the market while simultaneously throttling cash flow. Find out how this happens.
Does indirect distribution actually lead to desired reach?
There is a deeply entrenched belief in the consumer goods industry that direct distribution to the large population of small retailers is unviable. Therefore, companies try to service these retailers through indirect distributors such as wholesalers. In our consulting assignments, we have repeatedly challenged this belief. Find out why!
Is your sales and operations planning ineffective?
Often, materials supplied by the operations teams of consumer goods companies do not match those that the production teams need to fulfil orders. Teams spend copious amounts of time and energy on sourcing (expediting) the ‘missing material’. Vector Consulting has identified the cause of this chronic industry problem. Watch this short video to learn more.
Vector Consulting Group has transformed numerous supply chains using “pull” systems of Theory of Constraints. Companies like VIP, Bajaj Electricals and others have benefited from Vector’s consulting services which have helped these companies acquire a competitive advantage in their markets.
Aligning its operations to the principles of TOC – VIP Industries Ltd.
VIP Industries Ltd is India’s largest and world’s leading manufacturer of luggage carriers. With the help of Vector Consulting, the company grew its top-line and bottom-line by aligning its operations to the principles of TOC.
- Stock availability (branches)
- More than 90% consistently (from earlier 60-65%)
- Weekly fill-rates y
- 85% (from 60% earlier)
- Same store growth rate (co-owned stores)
- 20% (much higher than the earlier growth rate)
- Secondary sales (pilot in distribution channel)
- More than 50% increase (compared to previous sales level)
We have partnered some of the major names in the consumer goods and retail industry to create and implement radical solutions which have redefined industry benchmarks. These include:
With Vector’s help, we changed the operations to ensure over 95% availability at the central warehouse for more than 5,000 SKUs.
A. The earlier paradigm dictated that we manufacture products in big batches. To move stock, we had to procure big orders, open sprawling stores or pursue large franchisees. The fallout of this focus on primary sales through large orders was undesirable. Franchisees were burdened with at least six months’ inventory. Consequently, the ROI for franchisees dropped. It became difficult to attract good franchisees; this hampered our growth.
Working with Vector Consulting Group, we understood that small and frequent supplies ensured low inventories (of about two months) at the franchisee. This also brought in significantly higher ROI.
A.Yes! We realised quickly that it was not possible to replenish the shops weekly directly from the production line. Then we learned that it was possible to do so from a Central Warehouse. So, we built one. With Vector Consulting's help, we overhauled operations to align with the goal of improving availability at the warehouse. Availability went up to 95 percent for more than 5,000 SKUs stocked at the warehouse. Production lead-times dropped from 60 to 16 days, consequently total inventory reduced by 50 percent! The next challenge was to accept the increase in logistics costs (which went up along with the frequency of deliveries to the warehouse). We reconciled with this cost as it was marginal compared to the substantial increase in sales.
A. We have added 150 new stores in the last 18 months. Our capability to make small and frequent supplies is key to enlarging our network of small franchisees and to operating company-owned stores in two and three tier cities.
95% availability at the central warehouse for more than 5,000 SKUs