BI for the CPG Industry - Supply Chain Visibility Drives Performance

September, 2009
BI for the CPG Industry - Supply Chain Visibility Drives Performance Sector Insight Many organizations in the consumer packaged goods (CPG) industry are Aberdeen's Sector Insights experiencing a tradeoff between the benefit of high product volume sales provide strategic perspective coming at the expense of extreme data complexity. At the same time, these and analysis of primary companies struggle to maintain open lines of communication with their research results by industry, retail customers and distributors in order to better manage the upstream market segment, or geographyflow of product. The main challenge however, is that these issues are no longer specific to the IT department. Line-of-business managers in marketing, sales, manufacturing, and procurement - to name a few - are now forced to drive tangible business value from this quagmire of data and generate a healthy flow of information throughout the value chain. In the face of these challenges, many CPG organizations are gravitating towards business intelligence (BI) tools to help create those supply chain linkages and deliver product more efficiently. Aberdeen's April 2009 Benchmark Report, Moving Past Spreadsheets: What You Need to Know about BI Deployment Strategies, demonstrated that 40% of companies in the CPG industry are driven towards BI technology in order to address their need to improve speed of access to relevant business data. This Aberdeen Sector Insight examines companies in the CPG industry to determine how these organizations are driving BI into the hands of more business managers in Recommendations order to better manage fluctuating product demand. Key recommendations for CPG companies seeking better The Value of Timely Information supply chain visibility and When deployed efficiently, the visibility that BI tools provide can translate overall business performance to significant business performance improvements. Aberdeen's data shows improvement: that CPG companies have been successful in leveraging BI to drive marked Expanded on page 6 enhancements in several areas of customer service (Figure 1). ? Establish a method for Figure 1: Driving Better Customer Service with BI defining strategic and tactical KPI eg 6.0% ? Seek ways to deliver BI to n 6.0%a 5.0% more lines-of-business within hC 4.0% 3.8% 3.2% the organization Y/ 2.5%Y 2.0% ? Create a formal process for eg 0.6% data collection and are 0.0% integration vA Customer issue Customer satisfaction Customer retention ? Explore all deployment resolution speed rate options for BI CPG Industry Industry Average n = 285 Source: Aberdeen Group, May 2009 © 2009 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 BI for the CPG Industry - Supply Chain Visibility Drives Performance Page 2
With clean, relevant, and timely information at their fingertips, these "Until now, the cost of BI solutions has been prohibitive. companies are able to address customer issues in a shorter time frame, However, as our business has ultimately leading to a higher degree of customer satisfaction overall grown, our needs have retention. The ability to access information faster and make quicker increased, resulting in a more decisions based on that information is a key underpinning of improvement in favorable cost / benefit ratio. several key areas of the business, including customer service. Because we run lean, timely information is important, so the Customer service is a crucial element of every business, but when speed of access to relevant considering the today's economic uncertainty, coupled with the top-heavy business data is also concentration of many retail customers, channels and distributors, CPG important." companies are in a precarious position with respect to their customers. Retailers are more price sensitive than ever and with the fierce competition ~ Finance Director US Food and Beverage inherent in the CPG world, the ability to resolve customer issues quickly, or preempt them altogether can mean the difference between retaining or Companylosing millions of dollars of business. CPG companies recognize the need for customer visibility and have proficiently leveraged BI tools to help to understand, instill retention practices, and grow their customer base.
Faster Information, Better Decisions From a business perspective, what sets CPG companies apart from other industries and enabl... [download for more]