Consumer packaged goods (CPG) companies operate in a dynamic and fast-paced market environment. The sector is currently undergoing several transformations due to rapid technological advancements, while promising in terms of opportunities, also pose numerous challenges. These challenges stem from a variety of factors, including economic shifts, global supply chain complexities and ever-changing consumer demands.

In this blog, we will explore how an AI- and ML-based cognitive procurement engine can offer solutions to the top 10 challenges that CPG companies are facing today.

Challenge 1 – Rising shipping costs

Solution: Utilizing advanced analytics and AI-driven tools to optimize shipping and logistics can significantly reduce costs. By analyzing vast amounts of data, these tools can identify the most efficient routes and modes of transportation, ensuring cost-effectiveness.

Challenge 2 – Rising raw material costs

Solution: AI tools can predict market trends and lock in prices for raw materials to stabilize costs despite market fluctuations. By leveraging predictive analytics, companies can secure raw materials at optimal prices, safeguarding against future cost increases.

Challenge 3 – Cuts to procurement budgets

Solution: By leveraging AI for spend management and process optimization, organizations can make strategic procurement decisions that maintain quality standards while adhering to reduced budgets.

Challenge 4 – CPG is a highly competitive market with small margins

Solution: Intelligent sourcing, powered by AI, can identify the best suppliers for raw materials and semi-packaged goods, ensuring competitive pricing and quality, and improving margins in a tight market.

Challenge 5 – Not finding supplier diversity

Solution: AI-enabled platforms can diversify sourcing by identifying a wider range of suppliers, reducing the dependency on single suppliers and mitigating risks.

Challenge 6 – Increasing consumer preference for sustainability

Solution: The adoption of AI in product and packaging innovation enables companies to meet consumer demands for sustainability by optimizing materials and processes and reducing waste.

Challenge 7 – Private-label brands moving up the value chain

Solution: Digital transformation, alongside strategic mergers and acquisitions (M&A), opens up new growth avenues and allows brands to enhance their market positioning and value proposition.

Challenge 8 – Inefficient inventory management

Solution: Advanced data analytics and AI technologies provide real-time insights into inventory levels, demand forecasting and supply chain operations to enable optimized inventory management.

Challenge 9 – Supply chain disruptions

Solution: AI-driven supply chain management tools can predict disruptions and adjust operations accordingly to ensure continuity and efficiency.

Challenge 10 – Finding the right partner for end-to-end visibility

Solution: Choosing a partner that offers AI-powered procurement and supply chain solutions can ensure comprehensive visibility and control over the end-to-end process.

HCLTech's SmartBuy

In today's procurement landscape, the pressure for corporate buyers and procurement teams to make swift and well-informed decisions has never been higher. With dynamic changes in commodity prices, supplier landscapes and a narrowing timeframe for decision-making, the complexity of purchasing can seem overwhelming.

HCLTech’s SmartBuy is an AI-driven procurement solution designed to transform this complexity into an advantage. It provides a single, web-enabled interface that empowers procurement professionals to make the best buying decisions while upholding the highest quality standards. It allows for a seamless operation, offering clarity and confidence even in the most volatile market conditions.

• Equipped with advanced AI capabilities that enhance forecast accuracy by incorporating external factors, HCLTech SmartBuy reduces redundant research efforts and boosts efficiency
• This innovation ensures enhanced compliance with corporate spending goals, and also bolsters negotiation power with suppliers
• SmartBuy's AI-powered framework continually learns in real-time through data from a plethora of internal and external sources such as historical RFQs, negotiations, invoices, industry news and even sentiments from social media.
• By collating and analyzing these diverse data streams, SmartBuy enables procurement teams to make smarter decisions, minimize manual tasks and focus on strategic objectives to ultimately drive down company costs.

Why us?

HCLTech’s SmartBuy is no ordinary procurement tool — it’s a robust solution that's already helping numerous CPG companies to pocket substantial savings. By streamlining complex processes such as contract negotiations and invoice management, it has become a cornerstone for efficiency. But the benefits reach beyond just cutting costs. SmartBuy leverages HCLTech’s innovative tech and result-oriented strategies to enhance the procurement lifecycle, ensuring organizations not only save, but also navigate resource management with greater sophistication.

In 2023, HCLTech took SmartBuy to new heights by integrating AI-driven enhancements into its digital procurement framework. These improvements are designed to help businesses refine procurement processes, guiding them toward optimized operations. The introduction of HCLTech’s Cognitive Automation Solutions further strengthens our procurement toolkit by offering advanced supplier risk management. Cognitive automation empowers clients to proactively identify and mitigate risks associated with sourcing direct materials, reinforcing their buying strategies.

This commitment to evolving and refining procurement services is a key reason why HCLTech was recently acknowledged as a Leader in the ISG Provider Lens™ for Procurement Services - Direct Procurement Enablement and Modernization Services, 2024. The recognition underscores HCLTech's dedication to driving procurement excellence and innovation.

Conclusion

The landscape for CPG companies is increasingly complex, but with the right strategies and tools, such as those offered by HCLTech, it's possible to turn challenges into opportunities for growth and innovation. Leveraging AI- and ML-based cognitive procurement engines can not only streamline operations, but also provide strategic advantages in a competitive marketplace.