Consumer Goods Technology recently released its 2017 Tech Trends Report and I was encouraged to read that most survey respondents recognized the need for digital transformation as a business imperative. Approximately 49 percent of the consumer goods (CG) companies that participated claimed to be “taking some steps,” while 28 percent said they were “well on their way” to becoming digitally driven. While sales growth and productivity improvements were the top drivers, the need for better inventory planning and forecasting along with stronger consumer engagement were among the top expected benefits.
We’re seeing similar transformation drivers at Microsoft, with more and more of our CG customers including advanced planning software as part of their digital strategy. Designed to improve sales and operations, the latest innovations in planning software enable consumer brands to act on data insights and evolving business practices to keep pace with rapid market changes and consumer demand.
Here’s the up-side: that age-old struggle of trying to better understand what consumers want, when they want it, and how much they are willing to pay for it has become a lot more manageable with today’s machine learning capabilities. Empowered with predictive and prescriptive insights, merchandising managers can drive performance and aid their accounts in understanding the right product mixes by market and channel.
They can also gain a deeper understanding of end consumers, which is critical for traditional CG companies in today’s increasingly competitive digital marketplace. Just ask Peter Breen, editor-in-chief, Consumer Goods Technology, who cautioned in the publication’s October 2017 tech trends report:
“They’re (traditional CGs) facing a new wave of younger, smaller product manufacturers and hybrid manufacturers/retailers that have no need to adapt their organizations for the digital age because they were created by the digital age. Taking the reality of this new competition into consideration, results from CGT’s survey might not be so good, because “taking steps” might not be enough any longer. Consumer goods companies probably need to step on the accelerator and shift their digital transformation efforts into higher gear.”
Creating personal, engaging and relevant experiences
Whether your consumer goods company was founded 100 years ago or 10 months ago, Microsoft and our partners offer advanced planning solutions that can accelerate your digital transformation. Leveraging our technology expertise and industry experience, our end-to-end solutions provide an analytics and visualization platform for your buyers to make optimal purchase decisions, drive product profitability and engage with consumers at a personal level to boost brand awareness and loyalty.
What can you expect with the latest planning software? Microsoft solutions complement your existing inventory control systems, while delivering state-of-the-art, near real-time capabilities. Just what your category managers need to achieve parity with all those fast-emerging digital CG organizations along with buyers at long-established brands. By connecting millions of devices and integrating your business systems, your company can gain the insights to truly transform your business.
To help you visualize how consumer goods companies are enabling data-driven innovation with advanced planning software, let’s look at how three global brands are connecting with consumers, improving sales and operations efficiency, and supporting global expansion across all their markets.
MARS DRINKS Connects Beverage Machines to the Cloud
Offering far more than just a coffee maker, MARS DRINKS creates more than one billion great tasting moments at work with its single-serve office brewers crafting coffees, teas, lattes, cappuccinos, and authentic espressos at the push of a button. This division of Mars, Inc. needed the ability to better anticipate and manage stock levels across their machines distributed throughout the globe.
Working with Neal Analytics, our 2017 Microsoft global partner of the year in business analytics, MARS DRINKS built an Azure IoT Suite-based solution that uses predictive analytics and collects real-time data from remote sensors on their vending machines to reduce the frequency of downtime and out-of-stock products. In addition to better understanding consumer behaviors and accounting for changes in demand related to factors such as weather and holidays, MARS DRINKS drives business insights throughout its entire value chain—from vending machines and other equipment to distributors, customers, and workplace consumers. Read the full case study here.
“The analytics platform based on Azure helps us to deliver a better service to our customers. We achieve this by using the information the platform provides to identify the optimum time to stock and service MARS DRINKS machines.” Jamie Head, Chief Information Officer, MARS DRINKS
ARCA Continental Turns Big Data to Competitive Advantage
Now let’s move from hot beverages to the global US$906.1 billion non-alcoholic beverage and soft drinks category. Mexico-based ARCA Continental produces, distributes and sells non-alcoholic beverages under The Coca-Cola Company brand, as well as snacks under the brands of Bokados in Mexico, Inalecsa in Ecuador and Wise in the U.S. The company wanted to explore state-of-the-art tools to get more insights from the information it already had. Specifically, it wanted to focus on incorporating external correlations through advanced statistical analysis and turned to Microsoft partner Neal Analytics for a solution.
Neal Analytics presented a solution that could drive business insight by analyzing the company’s three years of sales information, and by creating regression models that mapped this data against multiple other variables. The solution was made in a fairly easy way using the power of Microsoft Azure Machine Learning (Azure ML). Now, revenue growth managers can slice and dice the effects of multiple variables, practically in real time—giving them more time to focus on business strategies, instead of analysis. Read more here.
“We can use Azure ML to generate answers for each individual area [marketing, production, logistics, and warehousing] and get combined answers for the entire company.” — Ruben Dario Torres Martinez, IT Manager, Arca Continental
Miele Cooks Up Fresh Opportunities with IoT
Since being founded in 1899, Germany-based Miele, a leading global manufacturer of premium domestic appliances and commercial equipment, has embraced a “Forever Better” brand promise. It’s no wonder Miele’s customers have high expectations for the performance, convenience, design and environmental friendliness of the manufacturer’s products. To help consumers get the best results from their appliances, Miele used a proof-of-concept study employing Microsoft Azure IoT services to usher in the next generation of smart appliances and home cooking. The concept allows home users to program their ovens to ensure perfectly cooked meals, providing an exceptional customer experience. You can read about this collaboration here.
These exciting stories of digital transformation are just a sample of what consumer goods organizations can achieve. At Microsoft, we’ll continue to help your business find new ways to engage with consumers and drive profits through cloud machine learning and advanced analytics. Visit our advanced planning solutions page to learn more.