Mark Osborn, 24 April 2012
Last week I had the great privilege to attend the SAP Consumer Products EMEA Customer Value Network event. The CP team in EMEA did a great job pulling together a truly diverse audience:
- 25 executives, representing
- 21 Consumer Products companies hailing from
- 14 countries, and selling products in all
- 5 major segments of the Consumer Products industry.
With a group of participants this diverse you might think that we struggled to connect, communicate, collaborate and create value for one another. In fact the opposite was true. What was the common denominator?
The ultimate focus of every attendee was, and is, to influence consumers to walk down the store aisle, stop, pick up their company’s product, put it into the shopping cart and check out at the cash register. In other words, to enable what’s often called in industry terms, “the ‘moment of truth’.”
For everyone who attended last week’s meeting, getting to the point where the consumer is aware of and interested in their products while simultaneously ensuring product availability on the shelf along with proper price and promotion is enormously complex, and challenging. Some of those complexities the participants admitted they could tackle directly, while others require them to predict where they can, react where they must, but manage effectively regardless.
Managing effectively to reach consumers has significant business process implications. Consider what has to happen – and when – in order to enable that moment of truth.
- Consumers are using mobile devices to research and receive fresh and compelling ideas and offers.
- To capture the consumer’s attention, the product has to be priced right, at that moment, in that store and for that consumer.
- Consumers’ AND retailers’ expectations for sustainability must be met, not to mention regional and local regulations and requirements.
- Adequate inventory has to be available on the shelf to meet anticipated demand.
- This entails not only flawless logistics and fulfillment execution, but also effective collaborative demand and supply planning to ensure forecast accuracy.
- And, forecasting accurately requires high volumes of internal and external data to assess actual versus planned demand, in real-time.
Easy, right? Hardly. This is a “strategic cycle” of interconnected and inter-related activities for reaching the consumer, moving backwards from the point of decision deep into the consumer products 12-18 month planning, enabled by both business process and underlying technologies.
How are consumer products companies tackling these issues as part of their efforts to reach and serve consumers? That’s exactly what we discussed last week. Here are some highlights.
On the topic of mobility, Samsung discussed how it is working in partnership with SAP to help consumer products companies drive the mobile enterprise and, ultimately, enable direct to consumer engagement.
Carlsberg also shared how the company has deployed a mobile platform for enabling its’ sales people to enable flawless execution by managing price, promotion, merchandising and claims more effectively in the field.
Speaking of price and promotion, Red Bull discussed how they have successfully deployed trade promotion management and trade promotion effectiveness analysis so that they increasingly focus only on those price points, promotions and vehicles most likely to achieve their objectives.
On the topic of sustainability, Danone discussed their target of reducing carbon emissions by 30% by YE 2012 and how sustainability has improved compliance while improving consumer perception of their brands and their company as a whole.
Moving further along in that strategic cycle, Ferrero provided a success story for leveraging SAP solutions for extended warehouse management which enables them to facilitate timely distribution while optimizing inventory levels, reducing inventory costs and minimizing the risk of out of stocks at the shelf.
On the topic of Supply Chain, SAP revealed its plans for a Cloud-based solution powered by the SAP HANATM platform for Sales & Operations Planning. The solution will reconcile differing perspectives on actual and forecast demand and dramatically improve forecast accuracy against highly tailored, targeted demand plans.
Speaking of demand planning, Kerry Foods shared how they’ve been able to incorporate external measures of consumer demand like retail POS data, panel data and market research data along with internal demand indicators such as orders and shipments for use with trade promotion management to improve promotion planning and ROI.
And, finally, we learned from SAP about some of the underlying technologies that support the future of the consumer-driven enterprise in consumer products including:
- How SAP runs SAP to manage Big Data and the Mobile Enterprise
- A moderated discussion on In-Memory technologies in Consumer Products
- An update on SAP’s Cloud Strategy
These topics mirror that strategic cycle – the business processes and underlying technologies required to enable that moment of truth. And, by sharing best practices and lessons learned, each of the participants not only gained insights into how to run better by enabling the consumer-driven enterprise, they also perhaps walked away with new ideas about how they might be able to run better than ever before.