3 things to know about supply chains before you market your new product
Learn more about Responsible Supply Chain advisory team
When launching a new food product, many months or even years of work go into perfecting the taste, feel, production, packaging and marketing - all before you sell a single item. All that work can be derailed by unknowns in your supply chain.
Working with your suppliers during the development of a product has the potential to uncover opportunities for both cost savings and positioning, according to Paul Hillen, vice president of Brand, Digital Communications and Marketing at Cargill.
"Many customers bring us in early in their product development process to help them with potential supply chain cost savings, consumer claim opportunities, and to identify potential risks," says Hillen.
"However, there are still many customers who bring us in after they've launched their new product and then say, 'Ok how do we make this supply chain sustainable, or take out costs, or avoid criticism?' While it still may not be too late, many of those opportunities could have been realized much sooner - and earnings optimized earlier - in the product lifecycle."
Hillen says companies should consider three aspects of their supply chains before bringing a product to market.
1. Understand existing sustainability activities
First, Hillen says you must develop deep knowledge of your supply chain and where you may already be implementing sustainability steps. By understanding your process, you can communicate existing sustainability practices to consumers - which could lead to share growth.
"When we go in and work with a customer, we look at each step of their supply chain. Often times they are already doing things sustainably and they're just not taking credit for it. They're not telling their story," explains Hillen.
He says suppliers like Cargill can help companies quantify their sustainability efforts.
"We're just showing them how they can talk about what they are already doing in a more specific way that resonates with consumers," says Hillen. "For those consumers who value their story, it can lead to share and margin growth - or foot traffic to their brand or their retail outlet."
2. Supply chain cost reductions
The second area he recommends looking at with your suppliers is for cost reductions while advancing sustainability goals.
Too often, Hillen says, companies seek both sustainable supply chains and cost efficiencies after going to market, losing out on potential savings and share.
By working with suppliers and focusing on achieving cost efficiencies during the product development phase, you can increase the probability of success of the new product.
3. Uncover any risks
Hillen's third recommendation is around recognizing sustainability risks in your supply chain.
"We uncover areas for customers and say 'hey, you may not think this part of your process or your supply chain is not sustainable, but this could be an area of concern.' Many times customers don't know they could use less resources or implement a practice that could be more sustainable," describes Hillen.
"We help identify simple changes to quickly move that from a potential risk of being called out as a non-sustainable company to one that can be praised for its actions."
Cargill formed a joint business relationship with PwC to help companies assess supply chains for risks, cost reductions and brand building opportunities. Learn more about the Responsible Supply Chain Advisory Business.