By- Imran Saeed, Director, Analytics at Absolutdata
Gone are those days when FMCG business was driven by rigorous sales and marketing efforts in order to push the products to the customers. Rather, FMCG players now look for consumers to pull their products through the supply chain. This necessitates a better understanding of customer needs, their behavior and preferences, and how to keep them engaged. The well-informed, aware and digitally adept consumers make it all the more complex to predict their behavior and forecast the demand accordingly.
Deploying BI capabilities allows FMCG enterprises to optimize all the available data and derive predictive insights for agile and efficient decisions. Armed with deeper insights into consumer behaviour, FMCG enterprises get in a better position to redirect R&D investment and resource allocation, improve the returns of marketing efforts and maximize supply chain efficiencies.
Compelling Concerns for FMCG
The digital innovation curve hasn’t been an easy sail for the CPG companies. Adding to the growing sea of existing data streams (sales, promotional, supply-chain, and finance data), social media also adds to the woes. So, it becomes imperative for CPG organizations to manage, streamline, sort all this information; making the data more intuitive and insightful in real time.
But, what kind of concerns do FMCG players have? They might be having a hard time in-
- Identifying what to sell based on customers’ needs at their preferred point of purchase
- Exploring and adopting new ways to sell based on how customers are buying
- Optimizing inventory levels, warehouse management and driving value through the whole supply chain
- Driving maximum revenue and profitability through all channels across the customer decision journey
- Delivering personalized promotions and optimizing marketing spend
These are just a few to state, the FMCG industry faces challenges on many other fronts. Digitally-savvy consumers with ever-changing needs are demanding value like never before; the boundaries between countries are blurring causing expansion of operations and supply chain globally; retailers are partnering for sharing data and consumer insights; a growing need for agile value delivery chains; a consistent frontline fight for packaging, marketing and shelf space innovation to keep up with ever changing customer needs and expectations. All of this coupled with the industry ecosystem, infrastructure and the competitive nature of the goods, CPG companies seek a differentiator to reach the finish line.
Overcoming Business Challenges With BI
Efficient Supply Chain Management
BI tools can extract insightful data to uncover and identify cost reduction opportunities, perform accurate demand forecasting, delve deep into high-impact issues, and take care of other important elements necessary to keep a supply chain run seamlessly. BI systems facilitate real-time knowledge transfer, allowing for a full view of ongoing operations through interactive dashboards, visualizations.
Seamless Globalized Operations
Expanding operations globally either through mergers and acquisitions, strategic alliances or through organic growth is pretty common for FMCG companies. Deploying a BI solution can arm the FMCG companies with the ability to amass seemingly disjointed information related to such growth initiatives and completes the entire puzzle through analytics. Mission-critical actions can be consolidated via intuitive dashboards to give a holistic view and high-visibility into daily affairs, all at one place.
Controlled Inventory Levels
Efficient inventory management is critical to FMCG success. Demand supply economics, varying safety stock levels, product shelf-lives, segment behavior, lead times and cycle times, and share-of-wallet for different product lines can impact inventory levels. A BI tool can help in accurate demand planning and optimized inventory, providing with ability to consolidate data from disparate sources, and manage inventory across warehouses and stores around the globe. Insights related to sales pipeline helps to planning and optimizing the inventory reducing excesses in inventory, which ultimately reduces costs.
Superior Quality Assurance
Product quality has both a short and long-term implications on cost and revenues. Business Intelligence helps to explore the causes for degraded quality through a deep analysis of the production line and quality processes related to product development. BI systems can help to discern patterns and predict failure, identify components for repair and maintenance at low-impact times, thus improving the quality of your finished product. With the ability to deep dive into the possible reasons for failure, FMCG companies can ensure quality of the products being delivered into market.
Agile Business Models
The once standard delivery model has now fragmented into multiple delivery models, largely owing to the growth of the omni-channel experience. Customers are tech-savvy and their needs are constantly evolving. As a result, CPG companies exploring and experimenting with newer, innovative delivery models. Utilizing analytics allows CPG companies to identify the most efficient and successful models for their business based on customer profile data and success factors. Having a highly flexible dynamic delivery model, can keep the costs low on the sales.
Meaningful business decisions with the right intelligence
With the ever-increasing competition, regulations and complex supply chains have pushed FMCG businesses to deploy the best of the BI systems. The dynamic nature of the FMCG industry establishes the need to make on-point accurate decisions; and these decisions need to be data backed. Needless to say, the accuracy in decisions comes with comprehensive and fast insights being accessible to decision makers. This compels an effective unison of technology, business intelligence and system of results management to deliver value, generate higher revenues and meet all business goals.