Retail & consumer goods industry - the digital supply chain as a competitive advantage

Customer behavior and expectations are changing at incredible speed today, constantly challenging established supply chain and operational structures in the retail and consumer goods industries. In addition, supply chains are increasingly confronted with external influences and disruptions, such as the Covid-19 crisis, political and legal uncertainties due to trade conflicts or data protection laws, demographic change or the effects of climate change.

Only if supply chains function without problems can companies meet their customers' requirements and operate successfully in an uncertain environment. As a result, it is no longer just individual companies that compete with each other - what matters is the performance of their entire network.  

Traditional, linear supply chains are no longer able to meet today's requirements. To remain competitive, companies must transform their linear supply chains into dynamic and interconnected digital supply chains and networks that are able to collect and analyze data at every point within the supply chain.

Omnichannel players are able to seamlessly serve their customers at every touchpoint from a single source of truth. 

According to surveys, the biggest factors influencing customer satisfaction today are the final price of the product or service, the simplicity of the transaction, the breadth of the product range, the delivery method, and delivery reliability. In order to best ensure these points, companies in the retail and consumer goods industry must develop so-called omni-channel capabilities. Omni-channel players are able to seamlessly serve your customers at every touchpoint from a single source of truth, enabling your customers to shop seamlessly across channels with multiple delivery options, a personalized approach, assurance of stock levels and delivery times, real-time communication and hassle-free returns. But what does this have to do with a digital supply chain? 

A digital supply chain makes use of the entire spectrum of digital technologies - from IoT sensors and robots to Big Data analytics and artificial intelligence.

The basis of any omni-channel strategy is a digital supply chain. Unlike a traditional physical linear supply chain, this uses the full spectrum of digital technologies - from Internet of Things (IoT) sensors and robots to Big Data analytics and artificial intelligence (AI). With the help of these technologies, retailers can achieve complete transparency in their supply chains, and all actors within the supply chain network can optimize their decision-making in real time thanks to machine learning algorithms. For example, IoT sensors attached to products, combined with AI, can be used to assess the impact of temperature fluctuations on the way to the store on the expiration date of fresh produce. 

We want to give our attention to the three typical characteristics of the digital supply chain - (1) a unified database, (2) real-time visibility through IoT technology, and (3) artificial intelligence-based trend analysis and prediction.

1. a uniform database 

The basis of the digital supply chain is a single source of truth - in other words, a uniform database. Increasingly complex supply chains are generating a flood of data that separate databases and siloed tools can no longer cope with. Companies still working in separate databases are consuming an exploding amount of data management resources, creating an inconsistent web of KPIs, and struggling to drive data-based reporting and analytics. 

2. real-time transparency through IoT technology

With the help of IoT sensors, products of any kind can be connected to the Internet and exchange information with other devices or systems via the Internet. Compared to traditional RFID tags, these advanced sensors can provide real-time information and collect data of all kinds - from current location to temperature or humidity. Machines and products can communicate directly with each other in real time, considering internal and external factors such as delays or traffic. This eliminates the need for centralized control by humans.  

IoT technology with a uniform database can thus automate and optimize individual processes through to process chains within the digital supply chain. Instead of being based on outdated forecasts, drivers can, for example, be instructed in real time via an app and make deliveries to warehouses based on current stock and forecast demand for the next few days. 

3. artificial intelligence based trend analysis and forecasting.

The data collected at various points in the digital supply chain network, when thoroughly prepared in a unified database, provides an excellent basis for Big Data analytics and artificial intelligence algorithms. The intelligent combination of structured and unstructured data forms the basis for data analytics. Further, they come from a wide variety of sources and can be generated internally, externally or from publicly available data sources. Building a data network capable of reading, cleansing and analyzing all these different sources is therefore crucial. 

The insights gained through AI lead to improved planning and forecasting. For example, more efficient warehouse systems are enabled and processes such as supplier selection are optimized. In addition, Big Data analytics and AI allow retail and consumer goods players to better understand customer behavior and desires and predict the likelihood of when, where, and how much demand will arise. As a final step, automatically triggering appropriate actions in response to real-time analytics and predictions may even ultimately lead to fully autonomous supply chains. But how can retailers and consumer goods retailers transform their supply chains? 

The transformation to a digital supply chain requires the development and implementation of an overarching strategy.

Just following the latest trends will not lead to success in the long run. The only way is to develop and implement an overarching strategy. The first step is to identify strengths and weaknesses in the current supply chain network and compare them with best practice examples. Based on the insights gained in this process, an initial target image of the future supply chain can be developed. 

The next step is to find out which technologies, software solutions and integrations are needed to achieve this target image. The targeted use of first-class IT solutions along the entire supply chain leads to increased agility, better cost efficiency and overall more satisfied customers. For the identification and implementation of suitable IT solutions along the value chain, it is possible to work with specialized consultancies that assist companies in the planning and also ultimately in the implementation and integration of the technology solutions. 

Salesforce provides companies with a solution for cross-departmental and cross-enterprise information management and a unified database for powerful analytics and task automation.

Software solutions like Salesforce have revolutionized the retail and consumer goods industries over the past few decades, not just with CRM, but more importantly, the fundamental way businesses operate. With Salesforce, companies get a solution for seamless, cross-departmental and cross-enterprise information management and communication, and consequently a unified database for powerful analytics and task automation. 

In terms of the supply chain, Salesforce offers the CPQ (Configure, Price, Quote) product, which allows companies to turn the sales and ordering process into a streamlined process, and product packages are tailored individually to the customer. By using CPQ for partner communities, customers can also view the status of their orders directly, further increasing transparency and trust.  

In addition, the Salesforce platform also provides all the building blocks for developing native supply chain solutions that can be adapted to the specific requirements and processes of the respective supply chain. These solutions are used to facilitate collaboration between suppliers and buyers, for example, through self-service functionalities and communication options. A single source of truth with customizable dashboards creates end-to-end transparency across all supply chain processes and makes it easy to identify KPIs and growth areas. 

By closely networking on one platform with suppliers, logistics service providers and customers in a supply chain ecosystem, companies can dramatically increase their efficiency, better understand and predict demand patterns and thus better manage their overall activities. The supply chain is increasingly becoming a source of real competitive advantage, and an overarching strategy and the right technology are critical to achieving this. At Salesfive, we will guide you on your journey to a digital, connected supply chain and help you realize your full potential.