How to Overcome Consumer Products Challenges with SAP Solutions?

Organizations that produce goods utilized by consumers make up the consumer products sector. It can be said to encompass almost any product a person can buy, particularly in hygiene and cosmetics, electronics, appliances, food and drink, and other common household items.

Difficulties businesses face in this sector include fluctuating demand, changing consumer preferences, maintaining profitability, adapting to new norms and laws, and relying on a worldwide supplier network. We have seen the rise of the major shopping websites that offer international delivery due to the recent huge trend for consumer purchasing through online or smartphone shopping. The need for local suppliers to compete globally has increased competitiveness even further.

Current Scenario of the Consumer Products Industry Globally

The next twelve months are set to be one of good financial performance for the consumer products sector. Companies’ bold decisions in the face of the pandemic of 2020 are paying off. Additionally, despite rising prices, at least half of the corporations polled for a study anticipate growing operating margins. This is in line with an atmosphere that favors higher consumer pricing.

However, there will probably be some serious difficulties in 2022 as well. Supply chain issues are unlikely to be fully or quickly handled, labor is difficult to find and retain, and costs of all types are rising swiftly, affecting the industry’s capacity to experience the intended growth. However, things could appear differently to customers, retail partners, and employees. These important stakeholders view the present obstacles facing the consumer products sector.

Common Challenges in the Consumer Products Sector

In simple words, SAP CPG industries comprise businesses producing goods for end users. This comprises sub-vertical sectors, including tobacco, consumer durable goods, food and beverage, and consumer packaged goods (CPG).

Changing Customer Preferences

Demand is likely to change quickly. For instance, consumer preferences have changed significantly in recent years as consumers’ choices for healthier and more environmentally friendly solutions. Because of this, appropriate time to market and new product introduction (NPI) capabilities are directly tied to manufacturing success.

Demand may also vary cyclically and in response to market instability. How well these businesses respond to consumers’ shifting needs has a significant impact on their success and profitability. The last two years have increased the growth of mobile applications and shopping websites that offer door-to-door delivery.

Shrinking Operating Margins

Competitiveness in the consumer products industry has forced the manufacturers to work with lower operating costs to cut down on the price of goods. Manufacturers must find creative ways to reduce costs while still delivering goods of the best quality.

Changing elements like oil prices and their impact on transportation costs or petrochemicals, which may be utilized for chemicals and packaging, must also be taken into account by businesses. Humans will increasingly be replaced by automated devices (such as mobile applications for self-services), which will be used extensively across sectors and businesses to reduce operating costs.

Ineffective Use of Data

Data has become an essential requirement for every business in the 21st. But data is even more important for businesses in the consumer products sector as they need to understand their customers more than anyone else. Yet many businesses in this sector are still struggling to ensure effective use of data.

This is the reason businesses in the consumer products sector need to leverage advanced technologies to make the most of their data. Advanced technologies such as artificial intelligence and predictive analytics can help these businesses get a better insight into the behavior of their customers. Besides that, these technologies can even help such businesses generate better insights and enhance the decision-making of the entire organization.

Regulations and Compliance

Every business, irrespective of its industry or operation scale, must comply with certain rules and regulations. This is even more important for the consumer product sector, which has many eyes on them at any given point. However, you will often find businesses from this sector struggling to keep up with these regulations. As a result, they often have to pay hefty fines, which eat into their profits. This is again an area where automation with advanced technologies can ensure better compliance.


Even globalization has its ugly side that people often fail to discuss. Of course, globalization has helped the world transform and make it what it is today. But businesses in the consumer products sector might not always agree with this notion. Globalization brought greater risk, dependence on variable factors, and increased compliance requirements. These things present many challenges for businesses in the consumer product sector. But again, technology is what can help a business manage these challenges much more effectively.

How Can SAP Solutions help the Consumer Products Sector?

Anyone familiar with SAP solutions is well aware of the advanced capabilities of these solutions. For instance, consumer products businesses struggling to manage their data can leverage Accely’s S/4HANA. This solution will help them to handle and analyze abundant data in real-time analytics with minimal effort. Other than that, the solution can also help businesses get a better understanding of consumer demands and shape their strategies accordingly.

Consumer products businesses can even use SAP ERP to simplify their compliance. These solutions come with advanced capabilities that will help you ensure unmatched compliance with all relevant rules and regulations. SAP solutions are designed to manage compliance with both local and international rules and regulations.

When one talks about the challenges presented by globalization, one must understand that there is a simple solution to their complex problems. SAP solutions come with the latest advanced technologies to help a business seamlessly manage these challenges. But most importantly, SAP solutions can help you enhance productivity and efficiency, which will help you increase your operational profits easily.

Bottom Line

Challenges are integral parts of the consumer products industry, but one must not get worn down by the weight of these challenges. Instead, businesses must focus on finding readily accessible solutions to these challenges. This time and age calls for advanced solutions such as SAP to solve these issues easily. Therefore, make sure to use SAP solutions to your advantage and do away with all the challenges in your business environment.

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