Nick Calver, Marketing Director
Are CPGs underestimating the power of daily supply chain data? Can shoppers buy your products when and where they want?
For CPGs, determining the optimal quantity, location, and timing for their products is essential but challenging. Effective management requires more than a retrospective analysis of performance; it demands a comprehensive understanding of product demand and the driving factors behind it.
Just 20% of CPGs say they feel adequately equipped to collaborate with partners in order to get a real-time, end-to-end view of the value network chain. Only half that amount (10%) believe that they can “sense and shape” demand in real-time.
Re-engineering the supply chain for the omni-channel of tomorrow – Ernst & Young
In today’s market, the ability to remain lean—minimising waste and inefficiency—while being agile enough to adapt to market changes swiftly is crucial for CPGs. The foundation of this dual capability lies in accessing real-time, comprehensive data that encapsulates the entire product journey.
Grocery systems provide access to data, not actionable insight
Luckily, grocery data portals provide a wealth of useful information. The problem is, portals can be challenging and cumbersome to navigate. Extracting meaningful insights requires a lot of manual effort. Kelly Holman, National Account Executive at Valeo Foods Group, described the exhausting process: “Mondays start with me turning my laptop on at 6 am, just so that I can begin downloading all these huge spreadsheets from various retailer portals. Then, the rest of the day is spent inputting data, creating and fixing various formulas, and making sure everything is pulling through correctly. It takes up the entire day.”
Finding meaningful insights often requires sifting through vast amounts of information
Consequently, CPG teams across the business will often spend excessive amounts of time collating and massaging the data, which comes at the cost of understanding the insights to explain why certain events played out the way they did.
For instance, consider these common questions:
- How many days stock cover do we have for product X?
- How does this vary by depot and store?
- Which depots are most at risk of stock outages? And which stores?
- How does short delivery to depot Y impact availability?
- Which promotions suffered reduced sales because of low depot stock?
It’s these questions that planners and account managers need answers to daily. But to address them, you must run multiple reports on retailer systems seven days a week, 365 days a year. Then, you need to stitch together their contents.
The process involves linking sales, waste, availability, distribution, store and depot stock, and the movements between you, customer depots, and stores. It’s essential to understand how products flow through the supply chain in response to shopper demand.
Understanding demand is essential for creating a virtuous cycle of performance
This understanding of demand is not just a part of the process; it’s essential for creating a virtuous performance cycle. A detailed and accurate grasp of demand is key to proactive and strategic planning, as opposed to reactive measures. Organisations lacking this insight often fall into a cycle of ad-hoc decisions and ineffective execution, leading to predictable setbacks.
- On-shelf availability suffers, causing lost sales and forcing customers to choose alternative products. This results in missed sales opportunities, damage to customer loyalty, and strained retailer relationships.
- Conversely, having too much stock in play can also be detrimental. It ties up cash unnecessarily, increases storage costs, and drives wastage, leading to lost reveue due to inflated working capital or waste penalties.
Demand intelligence bridges gaps between teams, enhancing the understanding of demand. Without it, teams cannot:
- Respond effectively to changes in demand.
- Allocate limited stock effectively across customers and depots.
- Work proactively to rectify issues or blind spots in customers’ supply chains.
- Assess the validity of customers’ forecasts and plan production accordingly.
Demand intelligence helps deliver the right stock to the right place at the right time.
To address these multifaceted challenges, demand intelligence platforms have evolved. By leveraging comprehensive data and demand signals from the entire supply chain, these platforms empower CPGs to anticipate and respond to market changes by offering:
- Comprehensive data integration: Combining and harmonising data across the supply chain to model real-world scenarios, ensuring all information is contextualised for meaningful interpretation.
- Intelligent analysis: Linking sales, availability, stock levels, orders, and deliveries with forecast data, extending beyond the limitations of ‘EPOS analysis’ to yield rich, detailed insights.
- Insights to grow sales: Identifying opportunities to expand product distribution, utilising store-level data to understand performance metrics and demonstrate returns effectively.
- Improved availability: Gaining insights into how supplier service levels impact store availability and identifying depot service issues crucial for optimising processes in ordering, shipping, and stocking products.
- Promotions analysis: Monitoring the planning, execution, and impact of promotions to ensure that retailers meet actual shopper demand, not just the demand that could be fulfilled with available stock.
- Enhanced forecast accuracy: Revealing sales trends across retailers with unified, granular data, building a top-line picture of demand, and delivering the necessary detail to sense short-term fluctuations, forecasting with greater agility.
The net outcome of deploying these platforms is superior performance in meeting shopper demand, ensuring the right stock is delivered to the right place at the right time. As grocery continues to evolve, embracing such innovative solutions will be crucial for CPGs aiming to stay ahead in an increasingly competitive and turbulent market.
Want to see SKUtrak in action? Contact us now for a demonstration of advanced demand intelligence.