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Challenges Obstructing the Execution of Cost Optimization in FMCG
- Granular Data Collection and Analysis
- Data Integration and Quality Assurance
- Complexity of Cost Structures
- Scalability and Flexibility of Cost Management Analytical Systems
- Comprehensive Benchmarking and Analysis
- Timeliness of Reporting
- Alignment with Strategic Objectives
FMCG Profitability and Cost Optimization
- Accurate Manufacturing Cost Calculation
Calculate the actual cost to manufacture each product by manufacturing site, providing valuable insights to drive strategies that reduce variances caused by current standard costing practices.
- Cost Simulation for New Product Introductions (NPIs)
Simulate the cost of new product introductions by leveraging historical bills of materials, manufacturing, and delivery costs of similar products in the current portfolio, ensuring accurate and informed planning.
- Logistics and Storage Cost Measurement
Measure costs associated with product storage, handling, and transportation, enhancing negotiating power with third-party logistics providers (3PLs) and driving cost reductions.
- Logistics Efficiency Improvement
Drive logistics efficiency by benchmarking activity-level logistics costs across distribution centers, identifying, and replicating best practices to optimize operations.
- Operational Budgeting and Planning
Use historical operational costs and transaction volumes to calculate operational budgets and plans based on forecasted product demand, ensuring financial preparedness and operational efficiency.
- Channel-Based Profitability Measurement
Measure product profitability based on the cost of the selected channel or route to market, ensuring that pricing accurately reflects the incurred channel costs and enhances overall profitability.
- Customer-Level Profitability Insights
Use customer-level profitability insights to inform pricing decisions and terms of sale, ensuring that every transaction contributes to the bottom line.
- Profit Impact Analysis of Incentive Programs
Measure the profit impact of incentive programs at the product level, ensuring that promotional spend, slotting fees, volume rebates, consumer discounts, and other incentives contribute to both top-line growth and bottom-line profitability.
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