The fierce competition among consumer goods manufacturers, from food and beverage to electronics and automotives, is no surprise as capturing the minds and wallet share of customers has become extremely difficult. Manufacturers also have to take account of retailers, which both at physical outlets and online have downsized and shifted priorities to satisfy today's buyer's demand for a good deal. In this milieu knowing where and how to reach consumers with the right product and right price is no easy task.
Optimizing business efforts from manufacturing to product and throughout the supply chain to customers requires a comprehensive set of tasks that cannot be done without insights on what has happened in the past and where current activities are going. Those insights can come through analytics that assess the small but important details of pricing, trade promotions and processes in the supply chain to keep retailers satisfied with inventory levels. Retailers themselves are learning how to use analytics, as I recently pointed out (See: "Analytics in Retail: An Operational and Financial Mandate"), and to keep up manufacturers must be smarter in their sales teams and the people who manage the sales and operational plans that commit capital and resources of the organization. In addition, Finance is not just along for the ride any more as it look to get more engaged in the effectiveness of spending and balancing financial resources to meet the margin targets for the quarter. This can be accomplished through costing and profitability analytics that examine product and marketing investments across the business.
These days it is insufficient to apply analytics only to data representing historical activities; also needed is predictive analytics based on models and variables that can provide forward-looking projections of what will likely happen based on the planned activities. Organizations need to know how much and when to invest in marketing and product activities where pricing and promotion can generate only limited benefits in this busy marketplace of ever more competitors and changing economic conditions. All these demands are driving many consumer goods manufacturers to build new competencies in business analyst teams and seek tools and technology to apply analytics most effectively. Analysts then can cross lines of business to work more closely together than just focusing on their individual department's functions.
It's clear from all this activity that the consumer goods industry is in flux, forced to mature in its processes and utilize technology to its fullest. To optimize consumer brand recognition and profitability, companies must re-examine their current analytic processes and use data to determine if there are faster, better and, yes, cheaper methods to meet never-ending demands from a variety of business areas.
Of course any organization may need to prioritize where you focus improvements in the lines of business, but I advise you to consider that industry-specific solutions from technology providers are likely to solve only some of your needs. Getting away from the silos of spreadsheets and the inefficiency of electronic mail is a must; you want to have an analytic process that is much like your manufacturing process. Working collaboratively across business and IT is one big step in the right direction.
If you are considering how to apply analytics in your consumer goods organization, I encourage you participate in our latest benchmark research on analytics. I will be assessing the needs of your industry, determining where your lines of business and IT need to improve and suggesting guidance to help you make critical competitive moves. What you learn from the results can help drive improvement in your organization.
Take Consumer Goods Analytics Benchmark Survey.
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Mark Smith - CEO & EVP Research