Consumer Packaged Goods Industry Essay Example for Free

Consumer box Goods manufacture EssayWonderware relies on their services and expertness to take it into new opportunities and marts. From the 625 VAR/OEMs, approximately 2. 5% use Wonderware software to create solutions for food-products machinery in the Consumer incase Goods (CPG) industry. Out of almost exactly 3,000 SI companies currently active in the Wonderware Solution Provider Program, to a greater extent than 46% devote some portion of their practice to serving customers in the CPG industry. 63 % of Wonderware Certified sister and 82% of Wonderwares ArchestrA Certified SIs are involved in the CPG industry.But on the nose what do we toy with when we talk about the CPG industry? The free reference section at Hoovers online (www. hoovers. com/free/ind/dir. xhtml) includes a useful directory of industries and the following general definition Consumer Products Manufacturers Companies that design, manufacture and/or market apparel, make clean products, hand and power t ools, home furniture, housewares, linens, and consumer electronics and appliances. However, things may non really be that simple.Its actually more than meaningful to describe the CPG industry as a set of consumer behaviors rather than trying to draw boundaries well-nigh a specific list of product names or brands. And the key behavior that best describes the CPG market is that of replenishment on some regular or frequent basis. The items are in fact consumed, in some sense or another, fairly rapidly. This means that they do have a shelf disembodied spirit whether its the perishable nature of a snack food item or the fleeting jinx of a cell phone with features like text or pictures or videos.And of course that can mean that the value of an entire warehouse inventory, for a whole generation of product can go to zipper in a hurry Those behaviors tend to result in a steady flow of tenuous recurring expenses (for a tube of toothpaste, a pack of beverages or even the latest personal electronic gadget) rather than large infrequent ones like the acquisition of a major capital asset for manufacturing. The line of work for our manufacturing customers is that those small replenishable items still require the major manufacturing assets to produce them.The ability to rapidly reconfigure and re-task those expensive production machines and factories when customer whims change in other words, agile manufacturing can make the difference between profitability and receivership. The Consumer Packaged Goods (CPG) Industry and Solution Providers Page 3 2. Industry Comparisons The financial research tools at www. etrade. com (account membership required) go game some useful comparisons between the consumer goods industry and other major industry heavenss. Its not inevitably the fastest-growing business ector compared to general technology, financial or energy companies but certainly respectable when it comes to overall sector profit margins. The non-cyclical sub-cate gory of the CPG industry, in fact, ranks well above the Transportation, Basic Materials, and Capital Goods and Services industries. The consumer cyclical category includes apparel, amateurish products, personal electronics, automobiles and replacement parts such as tires. The non-cyclical category includes beverages, tobacco, personal products, office supplies and food items.The Industry Browser information tools at the Yahoo Finance Industry Center (biz. yahoo. com/p/3conameu. html) may bewilderment you in terms of the relative sizes and profitability of some segments in the Consumer Goods categories. For instance, the top five segments by market capitalization are as follows The Consumer Packaged Goods (CPG) Industry and Solution Providers Page 4 Segment railway car manufacturers Food major diversified Cigarettes Beverages soft drinks change products Market Capitalization ($B) 296 281 269 266 205 The largest segments are not necessarily the most profitable, however.The top fi ve segments by overall profit margin are Segment Cigarettes Cleaning products Beverages brewers Beverages soft drinks Confectioners Net Profit Margin (%) 17 13 12 11 10 sensibly surprisingly, the largest segment by market capitalization Auto Manufacturers is one of the least profitable at just 1. 8%. The sizable and highly visible but keenly competitive Electronic Equipment category is squeezed deal to just 2. 5% overall net margin. 3. What CPG Companies Need from Solution Providers For our Consumer Packaged Goods customers to succeed, they must deal with a number of internal and external pressures and demands.Those internal drivers include Protecting or increasing profits reducing costs related to o Supply-chain management Net asset turns on raw materials and finished goods inventories, effective sourcing decisions and reducing scrap or return rates o Manufacturing Improving operational efficiency and employee productiveness o Information technology Cost containment and outsourcing, standardization and consolidation of server assets, increasing reusability, and an application root word that protects and maximizes key databases and information assets Mergers, acquisitions, breakups and spin-offsThe Consumer Packaged Goods (CPG) Industry and Solution Providers Page 5 o o consolidation (or disconnection ) of supply-chain linkages Operational complexity and startup costs dealing with dissimilar bestpractice philosophies, variations in processes, applications and technology, and training to amend and align vital human resources. External forces and demands that our CPG customers hardiness include Meeting changing customer needs and requirements Preserving brand integrity through product quality and safety as well as regulatory requirements Speed to market with more (and often complicated) new products.Now, with all those pressures facing our Consumer Packaged Goods manufacturing customers, what can we a world-class community of solution provider s and a world-class software supplier provide to help them face such challenges? First of all, we can provide a platform for growth an eco-vision that can grow and spud as the fickle customer marketplace changes and the companies adapt. We can offer an architecture built around re-usable components not just software objects, but encapsulated best practices and intellectual capital. That means lower project-to-project costs and a commonplace service architecture from production to process. We can deliver an architecture for incremental investment, avoiding the big bang progression that held back the promise of advanced manufacturing execution systems (MES) for so long, for example.