Software solutions and frameworks help Wrigley, Pepsi and Crocs win customers and reduce costs
Software solutions and frameworks help Wrigley, Pepsi and Crocs win customers and reduce costs
At the National Retail Federation conference in New York City last week, IBM announced a new Consumer Products Industry Framework to help clients reduce costs and increase revenue through improved consumer relationships, supply chain analytics and e-commerce capabilities.
It said companies winning business and lowering overheads with these IBM solutions include Crocs, Wrigley and Pepsi Beverages Company (PBC).
Framework targets customers, promotions
According to the company, the IBM Consumer Products Industry Framework breaks down into four key areas to extend IBM’s service oriented architecture (SOA) middleware with industry-specific features and specially designed process templates.
Helping consumer products companies build and enhance relationships with consumers; improving trade promotion effectiveness through collaboration with retail customers and channel partners; capitalising on demand data and other information to drive improved predictive analytics to increase product on-shelf availability; and aligning manufacturing and distribution strategies – from raw materials to finished goods – to reduce inventory levels.
Mars/Wrigley is using the new IBM Consumer Products Industry Framework to improve network, transportation and inventory performance. As a result, the company was able to test various factors from raw material projections, labour costs, carbon emissions, environmental sustainability and fuel prices to obtain the optimal combination for their distribution network. Mars/Wrigley consequently reduced supply chain costs by up to 9% by consolidating warehouses and shipment capabilities.
IBM also gave an update on another customer, Pepsi Beverages Company (PBC), which is using the IBM Consumer Products Industry framework to bring manufacturing flexibility to its supply chain. Market data showed that consumer preferences shifted from carbonated drinks to noncarbonated drinks and from cans to bottles. However, PBC produced these newly preferred products in a limited number of plants leading to service problems during periods of peak demand. To build the desired level of manufacturing flexibility into the supply chain network, PBC matched production sourcing decisions with consumer preferences each trimester. In this strategy, sourcing decisions were based on total supply chain costs including manufacturing, transportation, and warehousing costs as well as customer service requirements.
The supply chain transformation results included reducing raw material and supplies inventory by $16 million (£10.1m), cutting 2% of its transport miles even as revenue grew and making an additional 12.3 million cases of Pepsi beverages available for sale due to reduction in warehouse out-of-stock levels.
To put this in perspective, IBM said the reduction in warehouse out-of-stocks effectively added one-and-a-half production lines without any capital expenditure by Pepsi.
Acquisitions expand industry framework
IBM also discussed how a number of recent key industry acquisitions, including Coremetrics, Sterling Commerce, Unica and Netezza, would help retailers deliver a smarter shopping experience and create smarter merchandising and supply networks.
As part of the announcement, it said the framework can now provide real-time product recommendations to shoppers by combining Sterling Multi-Channel Selling and Coremetrics analytics capabilities. Targeted Unica Campaign marketing can be combined with WebSphere Commerce and Sterling Commerce order management capabilities. And the framework is designed to improve distribution and transportation network processes and inventory planning by integrating Ilog Optimisation with real-time data from Sterling Selling and Fulfilment Suite.
Crocs, the global casual footwear brand, has implemented IBM software to create a smarter supply network.
“Crocs is looking holistically at our supply chain operations to gain both customer and operational benefits,” said Scott Crutchfield, Crocs senior vice president of global operations. “With these efforts, we have enhanced our global inventory visibility across our direct and wholesale operations and improved the accuracy of our available-to-promise information. This visibility enables us to meet our commitments to our wholesale customers, including major retailers, in a timely and accurate fashion.”
