What’s vital to one brand’s growth strategy may not be what’s vital to another’s. While one brand may want to focus on increasing margins or introducing new products, the other might be dead set on reducing various working capital costs that consistently nibble away at its bottom line.
While immediate needs may vary, it’s increasingly important to ensure that decisions are not made in a vacuum. In short, CPG brands must be able to think about their business holistically, and they should lay the proper technological foundations to do so effectively and efficiently.
Implementing the right Integrated Business Planning (IBP) platform is a key step in setting your brand up for success—to reduce silos, decrease costs, increase sales, remain competitive, and plan better.
Though no two IBP processes are the same, certain end goals are ubiquitous: maximize sales, reduce costs, and proactively align operations with the pace of demand. Of course, this is easier said than done. Here are 3 features we believe that every CPG brand should look for when choosing the right IBP platform for their business.
Silos are the enemy of alignment. Traditionally, the process of integrating views of demand, supply, sales, marketing, product, distribution, financial teams, and more, can become bogged down by the amount of time, resources, and overhead it takes to align on a demand forecast.
This is further complicated when team benchmarks are misaligned, which can happen when they’re tied to departmental KPIs rather than total company; when data is siloed amongst teams; when processes are done manually, inviting error or slowness; or when systems are varied and individualized. This can cause confusion and informational discrepancies, among other challenges.
The solution? One central view of data so that teams can easily align and rally behind one view. Brands should have a unified view of supply chain, financial, and operational data across sales, inventory, distribution, manufacturing, and more. When data is centralized on one platform, the demand planning process can play out much more seamlessly—without tedious back-and-forth between teams. This creates a kind of digital brain for a business, eliminating blind spots from forecasts and slashing hours out of the IBP process.
Artificial intelligence can and should enhance a brand’s ability to enjoy a truly integrated business planning process. Some AI can identify the relationships between shipments, store-level sales, seasonality, inventory turnover, and marketing investment, helping you to potentially plan better under any situation.
In fact, an AI-powered platform has the ability to completely transform the way that CPG companies see the future, create trust in that future view, and plan and execute accordingly.
For one, AI has the power to provide brands with incredible levels of forecast accuracy—across sales, inventory, distribution and more. Higher accuracy promotes health across the business, helping brands store and manufacture inventory more precisely, which in turn optimizes working capital and marketing spend, while maximizing sales and reducing inefficiencies across the supply chain.
Second, AI can be incredibly agile. The Covid-19 pandemic, for example, sparked drastic changes to consumer behavior. For some categories, demand skyrocketed or dropped off a cliff, leaving many companies to shoot in the dark when measuring and planning for future demand.
Ultimately, however, although the impact of Covid-19 on demand is a vital data point, it is only one of countless variables that demand forecasting algorithms should take into account. An AI that’s built for CPG and market fluctuations does not react, it adapts—by quickly powering through a jungle of data, analyzing it, and incorporating it into its forecasts. Simply put, an AI will automatically account for new market variables. It will adjust—or, rather, correct itself—with each passing millisecond. That’s agility.
Finally, there’s AI that’s enhanced by human intelligence. This is a best-in-class solution for CPG brands. Though AI is capable well beyond human capacities, it cannot know everything. It’s in the field with boots on the ground. Not like sales, supply, and marketing teams, each of which have unique insights into distribution gains/losses, supply constraints, or last-minute marketing investments that an AI is not initially aware of.
As a result, an IBP platform should enable these teams to manually enter these numbers—human intelligence that will augment AI forecasts, such as a large non-seasonal order. This is another example of how an IBP platform can enable cross-departmental collaboration and visibility.
Forecasts are only as good as the data behind them, the insights they provide, and the quickness with which this information is accessible. And the best IBP platforms enable brands to act on this data as well. Insights that do not lead action only go half of the distance brands need to truly move the needle.
When sales forecasts are auto-generated from the SKU-level up, brands ought to be able slice and dice this data using any combination they desire—such as by channel, customer, distribution, brand, warehouse, or segment. Brands should demand a platform that easily enables this interactivity. This decreases hours spent putting these views together, chopping hours from the IBP process.
It would take a team of intelligent humans hours and hours of analysis in order to ascertain the factors that contributed to historical forecast errors, as well as the factors that will drive predicted sales. Add in plenty more hours to determine the specific percentage impact each of them had on a forecast performance error, or will have on predicted sales. CPG companies should opt for a platform that automates these analytics and quickly displays them in an easy-to-understand fashion.
For instance, if a brand can see that a promotion will influence higher-than-expected sales for a certain product, they could potentially pour fuel on the marketing fire and put into motion operational plans that ensure they will have enough inventory to meet this new velocity. With these types of analytics in hand, brands can take action and make confident decisions across their supply chain operations and financial plans, among other areas of the business.
The CPG supply chain continues to evolve, and fast—it’s imperative that your brand evolves with it. With more and more IBP platform options, it matters which one you choose. Consider a platform that allows you to access complete visibility, artificial and human intelligence, and actionable data for a speedier, more collaborative business strategy.
Unioncrate is an AI-powered Supply Chain Planning Platform that gives CPG brands the technology they need to compete and win in a rapidly changing consumer landscape. Our automated demand and supply forecasts deliver unmatched accuracy, collaborative visibility, and actionable intelligence, simplifying a manual-heavy process and slashing hours from your week.