“If you cannot measure it, you cannot improve it.” – William Thomson, 1st Baron Kelvin.
Making decisions based on useful and relevant information is important in all walks of life, including business. Business intelligence (BI) plays that crucial role in driving key organizational decisions across industries. As a procedural and technical infrastructure that collects, stores, and analyses data, BI uncovers historical and current data to inform critical business decisions. For BI to be successful, it is critical to identify key touch points such as customers, retailers, end-to-end supply chain, and drive the data collection into a centralized data lake to derive value from the ever-increasing volumes of data.
Key to successful implementation of BI is to:
- Drive value for the end consumer, by improving overall customer experience, quality and satisfaction
- Leverage predictive analysis in driving business improvements and key product-related decisions to enhance the customer experience and increase the revenues
- Optimize costs and reduce wastages to a minimum in end-to-end supply chain processes
- Reduce dependencies on an individual’s knowledge, specifically in the manufacturing of a product, and making it more process and technology led
In essence, BI has become one of the fundamental building blocks of business as it enables data-driven decisions which reduce the business risk and drive significant business growth.
In the consumer-packaged goods (CPG) industry, companies require data-led insights to understand the changing demand across existing and emerging channels of commerce. As per studies, the global CPG industry is expected to reach USD14 trillion by 2025. With advanced digital and analytics capabilities, CPG companies can engage with customers more intimately based on meaningful and granular consumer insights. For instance, image recognition technology is a revolutionary solution designed to optimize supply chain, improve manufacturing quality, and in-store and online retail execution in CPG markets. According to Markets and Markets, the image recognition market size in CPG is expected to grow from USD 1.4 billion in 2020 to USD 3.7 billion by 2025 globally and this is just one instance. So, what are the touch points in the CPG industry that can take full advantage of predictive analytics? Here’s a closer look.
Key benefits of having End to End Enterprise BI strategy:
The advantages of implementing BI for enhanced business growth are as follows:
- Improved quality- BI leverages data to identify and eliminate gaps in the manufacturing process, improving the quality of the finished product.
- Reduced wastage- By leveraging advanced analytics, enterprises can measure and monitor the quantity of waste generated. And drive the required improvements to reduce wastage.
- Enhanced efficiency- Deriving meaningful insights about overall end-to-end enables companies to act upon problems immediately, before they result in poor quality, customer loss, or loss in revenues.
- Consistent results- Instead of purely relying on instinct or trial and error, enterprises can take decisions backed by data which reduces the risk of failure and delivers consistent results.
Driving increased value through predictive analytics for CPG companies
Enterprises can take their budget and allocate resources precisely to meet emerging consumer needs by adopting a risk-adjusted, opportunity-focused approach. This can happen at multiple touch-points within the business framework:
- Product quality and manufacturing– Real-time data captured from manufacturing units can optimize production by getting insights into the overall process, eliminate waste (time/material), improve efficiencies and quality by adopting techniques based on IoT, sensors, and visual inspection to develop their core product line. Smart CPG companies have now taken a different approach like using digital twins to develop new product portfolios that balance innovation and cost efficiency. As a virtual copy of a real-world component in the manufacturing process, a digital twin can simulate product performance. A global adult beverage company, for instance, used them to develop a new coating that reduces microcracks in the bottles’ glass. Not surprisingly, IDC reports that digital twins represent an “important strategic initiative” for more than 70% of enterprises.
- End retailers– Retailers can drive their operation’s performance through data-led - inventory management, understanding the end customer and marketing campaigns. The key is how the data collected by retailers can be shared back with CPG companies to understand the success/failure of their products.
- End consumers–More and more CPG companies are investing in understanding their end customers and collecting as much data as possible for creating targeted marketing campaigns. Key challenges for CPG companies have always been understanding what drives customers’ buying patterns in retail stores, understanding the end customer and his/her demographics, and not being able to correlate the buying patterns with the product purchases. This could be through marketing campaigns, retailer store advertisements, or customers' buying preferences. But now through data, you can integrate marketing campaigns with product sales through the point-of-sale (POS) data, to get actionable insights for understanding your end-customer profile better.
- Supply chains–The supply chain and logistics domain is playing a key role in embracing BI solutions to deliver customer-centric outcomes. Gartner predicts that the global supply chain management market is expected to reach almost USD 31 billion by 2026. It’s important that the data captured from supply chain systems and logistics/end stores are consolidated to drive meaningful insights to drive fulfillment/replenishment “on-time” to avoid any revenue loss.
- Distribution chains– With a dramatic increase in online shopping, BI helps distribution chain managers predict and track shipments in real-time by expanding the scope of last-mile logistics through real-time tracking and providing that to retailers\end consumers. More and more CPG companies are driving digital transformation through D2C strategies to enable direct interaction with customers and have distribution chains servicing the customer through direct-to-customer deliveries.
Tapping innovative technologies for critical insights
Enterprises can adopt multiple approaches to collect data from various sources and devices to create enterprise data lakes.
- Internet of Things (IoT) devices are embedded with sensors, software and other technologies to connect and exchange data with other devices and systems over the internet. They can transform complex supply chains into fully connected networks. Markets And Markets predict that the IoT market size will grow from USD 300.3 billion in 2021 to USD 650.5 billion by 2026. The key to successful IoT implementation is to integrate IoT devices’ collected data into the central data lake to derive meaningful insights to drive business decisions and provide CPG enterprises with a competitive edge.
- Sensors– Sensors convert physical phenomena into digital forms e.g. weight sensors can be installed on store shelves to alert the store associates as soon as the shelf becomes empty, CPG enterprises can use the data acquired from the sensors to gauge the popularity of a particular product among customers and to determine the most popular product in a category. The data can be used to identify customers’ buying patterns to determine the best location and media to advertise their products.
- Visual inspections– Actionable visualizations generated by onsite cameras and drones can be processed by a visual inspection model for quality assessment to detect the tiniest defects in product manufacturing through AI-enabled visual inspections and ML-based advanced image analysis algorithms to alert the assembly line experts instantly. This enables early detection of risks which reduces overall business costs.
- Smart POS/Smart Coupons/Loyalty Rewards– Smart POS can capture a lot of information about the customers, products sold, and can cross-sell additional products based on customers' past purchasing history. This data can be transmitted in real-time to/from the data lake, giving visibility to customer shopping behavior and patterns to improve product strategy and increase overall sales for both CPG/retailers.
- Smart coupons can incentivize specific consumer behavior and by maintaining redemption logs, the value of orders placed with a coupon code etc. can provide insights to the CPG companies about the success of their marketing campaigns, product popularity and enable more sales.
- Loyalty rewards can enable intimate relationships with the end customers by rewarding them after purchasing the products by assigning loyalty rewards\points, that can be traded for any additional purchases. It enables insights about the customer, such as demographics, repeat customer, purchase frequency, product favorites and program engagement etc., and enable targeted one-to-one campaigns.
Allow HCLTech to supercharge your business intelligence strategy
Our ‘Digital Business Services’ help build the key platform components of BI through Digital-Technology-Footprint™—an execution framework that unlocks business value through actionable insights
BI helps organizations make smart, data-driven decisions. BI identifies ways to raise revenue, improve quality, analyze customer behavior, track performance, and optimize operations across teams/manufacturing processes and supply chains. It is a digital journey that begins with reimagining business processes through technology. Our ‘Digital Business Services’ help build the key platform components of BI through Digital-Technology-Footprint™—an execution framework that unlocks business value through actionable insights. As a global technology company and the ecosystem enabler of more than 200 Fortune 500 companies, we can supercharge progress and drive growth in your CPG business with our industry-leading business analytical capabilities.