Procurement & Sourcing

FMCG companies procure hundreds of raw material and packaging material variants from multiple suppliers. Without systematic price benchmarking, purchase teams default to familiar suppliers and miss savings opportunities.

Production lines in FMCG companies stop when raw materials or packaging materials run out. With dozens of materials consumed simultaneously, manually monitoring reorder points across all items is not feasible.

FMCG companies negotiate annual or seasonal rate contracts with key RM and PM suppliers, but these contracted rates are rarely enforced at the PO level, resulting in spot purchases at higher prices.

In FMCG production, a substandard ingredient or packaging material batch can cause product quality failures, customer complaints, and regulatory issues. Procurement decisions made purely on price ignore this quality dimension.

Procurement budgets for RM and PM categories are set annually but rarely tracked at the transaction level, leading to budget overruns discovered only at month-end or quarter-end.

Some RM and PM suppliers — particularly for imported or specialised materials — require advance payments before dispatch. These advances are tracked informally, leading to double payments or unrealised advances.

For FMCG companies importing ingredients or packaging materials, customs documentation — bills of lading, commercial invoices, certificates of origin, FSSAI import permits — is tracked across email chains and is frequently mismanaged.

Emergency spot purchases — needed when a regular supplier cannot deliver on time — are often processed informally without proper price comparison, budget checks, or documented justification.