Sees Maximized Revenue
Consumer packaged goods
manufacturers are being
squeezed by trends in customer purchasing and technology, coupled with pricing pressures, higher input costs, and
fluctuating commodity prices.
In today’s market, CPG companies have to integrate and collaborate with trading partners
and better manage retail shelf
space. Growing recognition
that failure to innovate will
result in poor performance,
acquisition, or worse, is driving leading CPG companies to
transform their operating
—Ben Pivar, vice president, Supply
Chain Technologies Practice,
Capgemini North America Applications
emand-Driven Enterprise integrates planning and execution more
collaboratively across manufacturers and retailers. This drives revenue and margin increases by better supporting assortment optimization, space optimization, trade funds management and
demand planning while streamlining the supply chain. Although it requires alignment with the overall value chain—Sales, Marketing, Product Development and
Finance—the power lies in five core concepts:
• Collaborative Category Management—CPG companies have dedicated
account teams that work with specific retailers to research consumer behavior,
shopper affinity, and new product introductions. By leveraging this data,
account management teams can embed category strategies into improved
assortment and store-level plan-o-gram recommendations.
• Demand Planning Synchronization—Most CPG companies forecast distribution center shipments rather than actual consumption data at the shelf,
causing discrepancies between true demand and available supply. By tapping
into POS data directly from the retailer, accurate analytics can be performed to
analyze promotion effectiveness.
• Trade Promotion Management and Optimization—The Demand-Driven
Enterprise drives accurate sales planning, measurably increasing sales through
promotion optimization. CPG manufacturers can model the impact of different
types of trade promotions to better understand the ROI associated with each
trade instrument and better collaborate with retailers for future promotions.
• Inventory Planning Synchronization—Improved forecast accuracy is combined with other key data points from the retailer to calculate time-phased net
inventory requirements for each node within the supply chain. By synchronizing
inventory strategy and logistics with retail partners, CPG companies better understand true inventory requirements and thereby minimize inventory buffers across
the network. Identifying and prioritizing different types of demand signals, and
deploying inventory from the most cost-effective supply location becomes simple.
• Supply Chain Execution Collaboration—Retailers and CPG companies
must collaborate on-demand and shipment plans within the execution window. Visibility into the retailer’s inventory strategy and POS data enables CPG
companies to manage inventory and resource constraints and to produce an
executable deployment plan to meet projected consumer demand.
Moving quickly to a demand-driven model is imperative for maintaining competi-
tive advantage in the crowded CPG marketplace as retailers are beginning to
expect and demand these value-added services from their trading partners.