Oliver Wight International presents a new white paper on the Australian private label supply chain.
It is expected $31.8 billion will be spent on private label grocery products in Australia by 2017-18 with most manufacturers now either engaged in supplying private label products or considering a private label strategy.
Oliver Wight’s white paper, ‘Managing the Private Label Supply Chain’ considers the cost and effect on the supply chain including pitfalls missed by many manufacturers, and uncovers the secrets to success.
The author of the white paper, Oliver Wight Partner Stuart Harman explains that private label has witnessed an unprecedented growth in the past decade, and now manufacturers are presented with an exciting opportunity to produce products for major retailers, taking advantage of their promotional and marketing activities, global expansions and steady customer demand.
Entering into the private label supply chain however, carries the risk of leaving profit, power, and supply chain control at the mercy of powerful retailers.
With over 20 years of experience helping organisations improve their supply chain processes, Harman has also worked with leading international private label suppliers, including Australian Pet Brands (formerly Bush’s Pet Foods), giving him an authoritative position to consider what organisations need to do to get private label manufacture right.
Using his personal experience as well as his industry knowledge, Harman provides practical advice on how companies can best understand the dynamics and specifics of the supply chain, and reap the benefits from private label manufacture.
Five of the most common profit leaks, and how organisations can avoid falling prey to them, are detailed in the white paper. These include not accounting for raw material price fluctuation; delays in the product management process resulting in unbudgeted costs to meet launch deadlines; obsolete stock following product deletions; confusing the value proposition and thus business priorities; and lack of visibility over demand variations.
Harman believes that greater collaboration between suppliers and retailers will help plug potential profit leaks and more effectively meet demand; with this at the heart of private label production, manufacturers have a real opportunity to achieve excellence, growth and ultimately success.