Presented by EdgeVerve
In the transformative aftermath of a global pandemic, the consumer goods manufacturing landscape has witnessed a seismic shift, fundamentally altering consumer behavior and reshaping supply chain networks across the globe. The unexpected and persistent nuances of consumer behavior and a surge in ecommerce have thrust supply chain networks into a vortex of challenges. The fragmentation of demand, transitioning from centralized retail hubs to a myriad of individual households, has catapulted enterprises into a complex web of supply chain management challenges. This dispersion has led to surplus inventories, misaligned distribution strategies and a palpable inability to meet consumer demands during peak periods, necessitating a transformative evolution to avert stagnation and decline.
Bridging retail and manufacturing through ecommerce data synergy
The meteoric rise of ecommerce has spawned a significant data challenge, with information drawn from many disparate sources, including storefronts, ecommerce platforms and third-party data syndication. This data, often incongruent due to varying formats, granularity and frequencies, presents a formidable challenge. Approximately 80% of the data generated by supply chains is external to the enterprise, creating siloed data structures that significantly impede visibility throughout the supply chain.
Case in point: Consider the scenario of the world’s largest cosmetics company, which conducts its business through various channels — individual brand stores, multi-brand retailers, boutiques, salons and several online platforms. As part of the marketing and promotional activities to attract customers to stores, they use ‘coupons’ for customers to redeem discounts and offers, an essential measure of the success of these promotions.
However, the company relied on third-party agencies for harmonized data from digital and printed media coupons to derive insights. The available data, which was extremely limited, came up to three months late. As a result, most analyses were irrelevant and useless for strategizing interventions while the promotions were going on. This lack of visibility prevented them from seeing in reasonable time how their promotions were performing, how they were affecting sales, which ones were doing better than the others, what the ROI was, etc. The ripple effects extend to retail partners, impacting inventory management and, ultimately, the consumer experience.
Unified data solutions: A retail-manufacturing symbiosis
Manufacturers stand at a pivotal point in the intricate web of supply chain management, orchestrating numerous elements from production to distribution. The intrinsic value of data becomes particularly pronounced in this context, where real-time, actionable insights can significantly enhance decision-making processes and operational efficiency.
A report from the IHL Group underscores this gravity, estimating that out-of-stocks will account for a staggering $1.2 trillion loss for retailers worldwide, including $562 billion in losses solely from overstocks. While this data highlights the impact on retailers, the follow-on effects extend significantly to manufacturers, who bear the brunt of misaligned production and distribution strategies, ultimately affecting profitability and market share.
Pivoting towards a centralized, data-driven platform model
Case in point: Consider a multi-billion-dollar global consumer goods company renowned for producing some of the world’s most recognized brands in health, hygiene and home products. With data dispersed across various platforms, stakeholders found themselves in a quagmire, deprived of the necessary view of data, leading to inefficient sales processes and an inability to measure sales against targets accurately. By implementing a holistic, cloud-based platform, they achieved near real-time visibility into consistently delivered data, providing an accurate lens into the market and facilitating a nearly 10% increase in sales.
This centralized approach fostered better collaboration between manufacturers and retail partners, leading to optimized supply chains and better market responsiveness.
The solution extends beyond a technological shift, embodying a strategic pivot from siloed operations to a centralized, data-driven, platform-based approach. This transition encapsulates:
- Centralizing data management: Instituting a “data-as-a-service” model across the organization, ensuring that data is meticulously collected, made accessible and actionable to all pertinent stakeholders
- Harmonizing analytics: Crafting a unified data and analytics foundation across diverse channels and functions, ensuring that the insights derived are consistent, reliable and reflective of the comprehensive market dynamics
- Leveraging AI/ML: Harnessing the power of artificial intelligence and machine learning as robust tools for analysis and vital components in elevating data quality, predictive analytics and decision-making processes.
- Minimizing insight-to-action latency: Diminishing the time lapse from deriving insights to implementing actionable strategies, ensuring that data-driven decisions are prompt and pertinent to the prevailing market scenario
This strategic pivot augments operational efficiency and engenders a collaborative framework between manufacturers and retailers. It facilitates a seamless flow of information, ensuring synchronized efforts in meeting market demands and consumer expectations, thereby fostering a conducive landscape for mutual growth and enhanced market responsiveness.
Steering towards a unified future
In the perpetually evolving consumer goods manufacturing industry, characterized by shifting demand and robust competition, creating a unified ecosystem connecting all entities within the value chain is paramount. This approach ensures that manufacturers are adeptly positioned to navigate market fluctuations, guaranteeing agility, efficiency and a consistently customer-centric approach.
With soaring expectations for retail service efficiency and empowered consumers who will not hesitate to seek alternatives, this unified ecosystem is not merely beneficial but critical, paving the way towards sustainable, long-term success by adeptly adapting to market fluctuations and ensuring a consistently customer-centric approach. The symbiosis between retail and manufacturing sectors forms the cornerstone of this unified ecosystem, fostering a conducive environment for mutual growth and enhanced consumer satisfaction.
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