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CPG Suppliers: Drowning in the Sea of Big Data

No doubt about it - consumer packaged goods companies are drowning in data today.

CPG Suppliers: Drowning in the Sea of Big Data

It’s the age of Big Data, which is supposed to give companies unprecedented control over their supply chains. But how can they even begin to get a handle on this massive amount of information?

The challenge is partly a result of CPG suppliers looking to ramp up service to the customer – as if they had any choice. Competition for the easily distracted consumer’s dollar is fiercer than ever before.

One way to forge a more efficient supply chain is through the use of direct store delivery. But a successful DSD strategy requires quick access to accurate consumer data, especially information captured at point of sale. Now add in the wealth of intelligence to be mined from social media, and you begin to understand the scale of the problem faced by CPG suppliers and retailers alike.

CPG companies are turning to data scientists to make sense of it all, says Brian Schulte, director of industry marketing for DSD with Honeywell Scanning & Mobility. They’re helping to sort through the noise to uncover valuable customer feedback on new-product introductions. In the process, suppliers can better align their forecasts and shipments with actual demand.

Producers of so-called fast-moving consuming goods say they are under relentless pressure from retailers on both price and selection. The battle for shelf space is fierce.

To get a better sense of what’s selling, suppliers are parsing information in ever-narrower slices, reflecting the explosion of product SKUs and categories. Think of the countless options for the packaging and sizing of items such as alcoholic beverages, especially during a big seasonal promotion, or the special labeling requirements of individual big-box retailers.

There’s plenty of data out there to help CPG suppliers manage those tasks, but they’re far from making proper use of it. In a new survey of 350 companies by Honeywell, nearly 60 percent said they were essentially overwhelmed by the information that’s available to them. Sixty-three percent of C-suite executives believe the growing complexity of their business “is impacting their ability to meet consumer and retailer demands,” Honeywell said.

More distressing news from the Honeywell survey: 57 percent of respondents said they’re under pressure from consumers to provide better traceability of product. (Bad service these days can result in devastating consumer reviews on social-media platforms.) Meanwhile, just 41 percent said their route sales reps are equipped with the tools they need to perform their jobs effectively.

The upside is substantial. Survey respondents that reengineered their DSD operations reported average annual savings of $735,000. Yet only 42 percent of executives said their DSD systems were “fit for the future,” Honeywell reports.

Having the right information at hand is crucial to operating a transparent supply chain. That’s especially the case when it comes to managing a wealth of CPG product details: ingredients, expiration dates, dimensions, weight, allergens and other warnings, to name a few examples.

Consumers today are demanding both accurate and consistent information, says Isabel DuPont, vice president of content production with Gladson. They want the product details that they glean on the internet to match up with what they find in stores. On top of that, regulators are forcing public companies to disclose the presence of conflict materials in their products – a challenging task in the best of circumstances.

Failure to provide the required information “demoralizes customer relationships, jeopardizes brand integrity, and offsets internal efficiency,” says Steve Cole, Gladson’s chief marketing officer.

So what’s the solution? DuPont says companies need all that data to reside in one central, easily accessible location. Only then can they start to organize, analyze, disseminate and update key bits of information, as products pass through multiple stages of development.

From that point on, it’s a question of operating in “maintenance mode.” Cole says between 20 and 25 percent of CPG items are replaced or changed in a given year. “There’s a constant flow of changes that are going into that database.”

Equally important is the ability to scale up in both the volume and variety of content. CPG brands aren’t getting less complex, and chronic SKU proliferation shows no signs of abating. Nor does consumers’ taste for detailed health and nutritional data.

Finally, there’s the need to tailor the information to various receivers, whether it be consumers or major retailers. “How Safeway wants their information may be different from the way Walmart wants information,” says Cole. “Being flexible in that way is critical to the distribution side.”

In the vast sea of CPG data, you can either sink or swim.

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