Every consumer goods, logistics and retail (CRL) company today wants to replicate the Amazon supply chain model but most are struggling. The primary reasons are culture and the way they are architected. Amazon and other tech companies evolved as Digital Natives. That doesn’t mean the rest of us are doomed, but it does call for better use of digital technologies to gain the upper hand – whether you were born in the new age of industry or not.
Digital brain – Within CRL, many companies run multi-tenanted heterogenous ecosystems, which can sometimes make it complicated to track everything taking place at any one time. As a result, hitting specific metrics around efficiency can be difficult, often because there’s too much reliance on humans carrying out a lot of interdependent tasks.
Through a combination of big data technologies, machine learning, AI and knowledge graphs, businesses can create a digital brain which functions as a centre point from which a variety of analysis, decisions and actions can take place. This digital brain can remove silos, become faster at routine tasks and automate actions through bots. For example, for a leading grocery chain, Infosys used knowledge-based graph concepts to improve the food traceability across its supplier ecosystem. The company was able to do this by digitising a lot of the upstream supply chain processes that were traditionally carried out by humans.
Blockchain – The global blockchain market is expected to reach a value of $60 billion by 2024, according to Wintergreen Research. Be that as it may, there’s still a huge amount of untapped potential for the use of technology in CRL. One area where it could be valuable is in global trade.
Global trade is increasing, and as such, there will be a need for greater efficiency and transparency across the supply chain. This is especially true in food manufacturing where traceability of allergens, substances, critical ingredients and finished goods is vital and regulatory compliance is constantly changing in various markets.
Blockchain has the ability to significantly lower the transactional costs as well as to help improve integrity in global supply chains. The main thing to bear in mind is the fact that although blockchain hasn’t yet seen widespread adoption, it’s still worth experimenting with the technology. For instance, we’re currently working with a major coffee company to establish a blockchain for their global coffee bean supply chain. As a first step, CRL companies should start experimenting with other supply chain partners in areas of mutual value and work from there.
IoT – In the data-driven era of CRL, the more things you can connect to one central platform, the more you will know about how the business is running now and project how the business will perform in the future. For the first time in history, it’s not just the machines in isolation that matter, it’s about how they can be mined for insights that can better inform business decisions.
For example, IoT can help in the automation of warehousing and logistics to help improve efficiencies and maintain product quality through cold chain management. In retail, vending machines equipped with sensors can help manage inventory and equipment maintenance. Companies should investigate areas of perceived value as a first step when looking to roll out IoT. The focus should be on realising value and not simply testing the technology for its own sake.
AR/VR – If we’re reducing VR/AR to consumer applications in gaming and entertainment, we’re doing the technologies a great disservice. The technology can be used from the factory floor to the shop floor to release new benefits for business and consumer audiences alike.
If we want to change the narrative about robots taking human jobs, which I think we need to, AR and VR are the technologies that could offer a new perspective. What we want to see in the future is a focus on workplace transformation, whereby better data insights and more immersive technologies can change the lives of supply chain planners.
AR and VR can help improve plant management and remote training. Both technologies can be used to provide remote equipment support so that the most senior specialists won’t always have to be brought on site for every issue – their insights can be shared to whoever needs them. Plant staff could also have live equipment performance data projected onto AR headsets so they always know when to proactively carry out maintenance and, therefore, avoid downtime.
5G – 5G and IoT are two sides of the same coin, in that the former greatly benefits the latter. 5G technology will help scale IoT solutions since the bandwidth will enable streaming of humongous amount of machine sensor data with ease. 5G will also help improve the bandwidth to help retailers and consumer packaged goods (CPG) companies give customers great seamless experiences.
Is 5G the only solution for all CRL companies to roll out immediately? No. But that’s not to say it shouldn’t be considered for businesses who want to take advantage of connectivity and data insights that will power their businesses for years to come. Businesses shouldn’t get caught up in the hype brought about by the major consumer networks rolling out 5G services in major UK towns. They should take a more measured approach to see how 5G can bring real benefits – not broken promises.
The Digital Native businesses have built their technology landscape around a very strong backbone of scalable data and thus have always been data and insights driven. On the other hand, CPG companies evolved around legacy and ERP solutions and have always struggled to bring this data together, let alone make decisions based on them.
The common aspect of all these technologies we’ve mentioned here is that ability to create a tremendous amount of data which can then create seamless automation actions. This is why this technology is important and this is why it will also help CRL companies to become more Amazon-like. Of course, they do need to work on some cultural aspects as well. The key thing to bear in mind is the need to start small with an area of identified opportunity and then expand gradually to include other areas. The key thing is to cultivate a culture of test, learn and scale.
Ambeshwar Nath, SVP and Regional head - Europe, Retail, CPG & Logistics, Infosys