Two workers in food manufacturing plant looking at laptop

Private Label Product Lifecycle Management: Calculating ROI (Pt V)

| PLM | Private label | Food industry
Posted By: Don Low


In this blog series we introduced four key areas of return and how these can be estimated for a medium sized retailer with a private brands program and achievable growth objectives.


Private brands and in particular grocery products have specific business needs that require a purpose designed PLM solution. Generic desktop tools will eventually let you down. We have seen it time and again. A crisis prompts execs to investigate implementing a PLM solution. The more important your private brands become to your overall business, the larger the number of SKUs and suppliers, the bigger the risks and costs of change become. The question is how long you’re willing to accept those risks.

Before selecting a PLM vendor you need to review what cross functional departments the solution will support. In the case of Trace One the focus is the following:


1. Category and product development teams

2. Product quality and supplier compliance teams

3. Packaging and sustainability teams


Ultimately, it’s the support for standardization, automation, and centralization of transparent data that these teams need to operate effectively that will lead to a return on investment. Even if you don’t have issues in all these teams, you should select a solution that can evolve as your business needs change. This maximizes the returns on investment.


Review of PLM return on investment


The functionality provided by Trace One’s PLM platform will lead to the following calculable quantitative returns on investment.


1. Increased speed to market means products are available in stores earlier which leads to more sales and revenue.


2. Specification validation and approvals reduces artwork iterations, packaging development delays, and packaging errors which can lead to product recalls.


3. Reduced effort and cost when dealing with a recall situation means that the financial impacts are minimized.


4. Reduced time and cost to transition to a new product supplier for a better deal means less lost revenue from stock outs.


But let’s not limit ourselves to just the returns that are easy to put a dollar value against. 



There’s more to it than just those four returns

There are other benefits that PLM solutions can bring that are significant but not as easy to calculate. 


1. Early identification of risks will minimize their impacts. Knowing which products contain an ingredient so potential contamination can be averted, reassigning resources to resolve potential process bottlenecks, analyzing the impacts of supplier certification expiration.

2. Taking advantage of opportunities for increased growth. Visibility into product claims and more importantly where a potential claim could be made to align with consumer trends but is not on pack, reduction in sugar and fats in food products to promote consumer wellbeing, and tracking packaging sustainability objectives to build a stronger brand image.

3. Time saved creating dashboards and reports or during an FDA audit.

4. Increased margins through regular review of product formulation against commodities and markets.

5. How many more successful products could you launch if you collaborate with suppliers more effectively and free up your teams to innovate instead of firefight?


Factors impacting return on investment

There are many factors that will affect how much potential return on investment a retailer will gain from their private brands portfolio through use of a PLM solution.

Commitment from the internal team to use the solution is required. Don’t ignore supplier onboarding and orientation. A high degree of supplier adoption is a prerequisite to the success of any collaborative solution. After all, there will be little benefit to your internal teams if they need to complete large amounts of data entry.

Business processes and current practices may well need to change to ensure the PLM solution is being used to its strengths, otherwise inefficiencies could creep in which will increase time to market and reduce artwork iteration savings. A retailer needs to be willing to make these changes. A strong PLM solution provider with expertise in the private brands arena will be able to consult on these topics to ensure customer success.

Finally it takes time to see the benefits and returns. After implementation and supplier onboarding products specifications need to be completed. Sure a data migration exercise can be done, but how confident are you in the quality of your preexisting data. There absolutely no point in migrating bad data. You need to select a PLM vendor that is willing to invest in being a strategic partner. One with a track record of success and that invests in the solution to keep up with industry trends and legislative changes.


Feedback please


What are your impressions of this blog series? Do you have any feedback? You may even have some reservations on the examples I provided to estimate the return on investment. If so, I would be happy to hear from you. 

Let’s discuss your unique situation to arrive at more specific estimates for your business so that you can secure the budget to implement a solution that will enable your business to meet its strategic objectives of growth, safeguarding your consumers, and acting to build stronger private brands.



About Trace One

We spearhead a powerful global retail community at the heart of the industry ecosystem. Unified on one platform, our systems connect, streamline, and organize data, teams, and networks. This allows brand owners to overcome complexity and grasp the opportunities at every stage of the product lifecycle.


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