Natural Products Insider

NOV-DEC 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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120 INSIDER November/December 2018 SupplySide West Preview To successfully establish sustainable supply chain markets and maintain unbeatable market value propositions (i.e., a commitment to delivered value), companies will need to become more involved in managing their supply chain through effective and involved partnerships. Supplement companies are continuously striving to creatively meet product demands in a highly competitive market. With a global dietary supplement market projected to be US$278 billion by 2024, according to a report by Grand View Research Inc., now is the time for fi rms to get a handle on supply chains and gain a piece of this large pie through preserving their competitive edge. The Power of Partnership As manufacturers, co-packers and distributors (also known as own label distributors) partner with their various suppliers, an important dynamic to be aware of is that to be effective in any level of relationship within the supply chain, fi rms should strive to partner with like-minded and like-valued suppliers. Once these partnerships are formed, the added knowledge and experience should work toward strengthening the potential to provide consistently compliant quality products. In the realm of growing FDA enforcement in the industry, these suppliers should: | Be initially verifi ed and qualifi ed as having in place the appropriate cGMPs (current good manufacturing practices, e.g., 21 CFR Part 111; 110 /117) and quality management system structures and standard operating procedures (SOPs); | Provide reasonably low-cost ingredients and components without compromise to the quality of the materials; | Have the capability to collaborate and bring creative, innovative ideas that drive customer value proposition; and | Help identify areas of stable consumer demands to focus on providing sustainable deliverables of necessary ingredients and components for manufacture and packaging. Supply Chain Segmentation In a March 2012 unpublished study performed by Janet Godsell, senior lecturer, Supply Chain Research Centre, Cranfi eld School of Management, U.K., Godsell proposed companies could achieve ROI through "business strategies that would involve a mix of sales and cost reduction targets." Strategically building and maintaining business alignments through "supply chain segmentation" (i.e., development of specifi c areas in the supply chain that are managed) is another way companies could increase and maintain ROIs. Thirdly, Godsell added that identifi cation of market opportunities through observation and understanding of competitive environments, if transformed into viable product and marketing strategies at cost-effective levels, consequently could provide sustainable customer value proposition. Supply Chain Management by Intentionality, Accountability Companies must be intentional about seeking suppliers that are equally committed to the standard and level of quality desired for the fi nished product and its delivery to the end user. Before the supplier is selected, companies should assess its level of education, knowledge and experience, ensuring the supplier is able to meet all necessary FDA requirements applicable to the product category. Effective Communication Quite often, while building these partnerships and identifying supply chain segments, companies fail to recognize that the supplier-customer relationship is not a one-way street. Responsibility and accountability should be properly communicated and appropriately distributed, as is typically stipulated in a quality agreement. Considering this, it becomes extremely important that the contract customer ensures that it communicates with great clarity to the supplier all requirements and specifi cations. One fi nal, but key, factor in the scheme of things is people. Critical to this process is the assurance by both parties that the individuals involved within each segment and those responsible for compliance oversight and management possess the appropriate education, experience and training necessary to execute each process knowledgeably and with the required fi duciary expectation. Heather Fairman is CEO of DF Guardian Consulting Inc. and has almost 30 years in executive leadership and management experience in regulatory affairs, quality assurance (QA) and quality control (QC) environments in the biologic, over-the-counter (OTC) and pharmaceutical, cosmetic, dietary supplement and food industries. She is an Independent Consultant with EAS Consulting Group LLC (easconsultinggroup.com) and also serves as a technical advisor for the SIDS DOCK Island Women Open Network (IWON), an intergovernmental organization of small island developing states (SIDS), comprised of 32 countries and who are embarking on developing raw materials for the herbal supply chain. Supply Chain Partnerships: 4 Effective Strategies to Improve and Sustain ROI by Heather Fairman Business ROI at SupplySide West Learn more about using connections to improve businesses' bottom lines during the "Boosting Your ROI: Secrets to Business Success" Workshop on Thursday, Nov. 8 at 9 a.m. at SupplySide West in Las Vegas. supplysideshow.com Scan Here

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