It is no surprise that in 2018 CPG companies are looking for ways to grow their top line revenue. According to Deloitte’s 2018 Consumer Products Industry outlook- “the ability of consumer product companies to quickly adapt, innovate and differentiate themselves in the marketplace thus driving brand growth, is often essential to success.”
Achieving CPG growth should be akin to catching fish in a barrel. Here’s why… US growth is up, there is a strong labor market, and rising incomes along with low inflation should lead to strong consumer confidence. In fact, according to Deloitte, online sales of CPG products will increase by 350% to $36B in 2018, up from $8B in 2013.
The challenge, however, is that there are some formidable growth barriers. For instance, national CPG brands are losing sales to private labels due to consumer shifting taste, retail stores are adding both private labels and national brands in stores to differentiate offerings, and of course Amazon is adding tremendous pressure – especially via its private label strategies (e.g. Echo and Kindle) which impacts CPG sales.
While these barriers are problematic, according to Deloitte’s 2018 report, CPG companies are deploying one of many key growth strategies across the value chain (e.g. Plan, Buy, Make, Move and Sale) that includes, but is not limited to: capturing emerging markets, faster product innovation, expanding geographies and new markets with mergers and acquisitions and finally digitizing their business to optimize consumer engagement.
To fully work, these CPG growth strategies require strong technology underpinnings in the form of integration. Without optimal integration, core business processes and their associated systems, people would not receive the right data at the right place and time. This can lead to major business impact that can undermine business strategy. Here are some examples:
- Capturing emerging markets… the challenge is that in some cases the network infrastructures are unstable, and/or the technology is old or the personnel IT experience is lacking. All of which impacts the consistent, secure and accurate exchange of commerce data (purchases or invoices, etc.) which only goes towards undermining business success.
- Integration requirement: Technologies that works in all challenging environments to ensure that the right data gets to the right people and place at the right time.
- Faster product innovation… the challenges is that the design process is decentralized. Data is created, shared and stored in many places, wasting long hours searching for data and thus slowing down collaboration. Also, design files are very large and exchanged externally via unsecured methods, thus putting intellectual property data at risk.
- Integration requirement: Technology that centralizes, shares and secures any file size across geographies quickly to speed up collaboration and innovation.
- Merger and Acquisitions… the challenge is the time (e.g. month or years) and cost (e.g. millions) it takes to blend all the merged systems into one core system. This in turn places the corporate strategy at some level of risk should the various migrations fail. Also, connecting new partners is time consuming and labor intensive.
- Integration requirement: Technology that has an abundance of flexibility to connect all merged companies into the parent company’s core platform, thus saving migration time and substantially reducing costs while also letting each of the merged companies maintain their operational identity in support of the corporate goal. Also, quickly connect all partners no matter the level of EDI sophistication.
- Digitizing their business…The challenges include creating a digital mobile sales channel without significantly increasing infrastructure complexities and hiring specialized skilled staff. Also, there is an issue with exposing legacy systems to internal or external API requests without long development delays or adding layers of specialized software. Finally, there is a need for consistent product fulfillment for both mobile consumers as well as traditional retailers; however, significant barriers like siloed systems exist that lead to lost data, and poor service levels which lead to poor sales across the board.
- Integration requirement: Technology that is versatile to allow one tool set to ‘quickly’ create real time connections to mobile platforms, API to legacy systems as well as streamlined batch connections to traditional (EDI) systems. This approach satisfies all internal and external customer inquiries and product delivery requirements as well as simplifying and standardizing business processes.
As you can determine, integration does play a key significant role in supporting CPG business strategies by connecting various business processes and people who need the right data at the right time to meet key business performance requirements. Unfortunately, many CPG companies may have a wide number of disperate and legacy middleware platforms that fall short in satisfying the various scenarios above; these platforms add high levels of complexity, slow agility and can have a high total cost of ownership. Perhaps the time has arrived to consolidate and modernize the many layers of middleware, so that strategic CPG growth goals can be reached!
SEEBURGER’s Business Integration Suite (BIS) can provide the answer to your CPG integration growth challenges. BIS has addressed all of the scenarios above by utilizing a multi-purpose, in-house developed, no third-party Hybrid Integration Platform (HIP). The platform provides a one-stop shopping framework for all integration requirements ranging from API, to EAI, plus MFT and B2B. BIS can be deployed on-premises, Cloud or in a hybrid model (e.g. on-premises software remotely managed by SEEBURGER’s team). The BIS platform is designed as a building block model;-simply add the specific integration modules (e.g. API, MFT or B2B) as and when they are needed. This approach saves time, drives faster time to market, increases value and most importantly standardizes processes giving your CPG organization the opportunity to quickly implement CPG growth strategies and easily overcome technology challenges.
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Written by: Brent TisdaleBrent Tisdale is a Vice President of OmniChannel Sales at SEEBURGER Inc, a global market leader in business integration software. He has more than 30 years’ experience working for luminary companies like IBM and General Electric where he has streamlinedcomplex business processes for many industries including Retail, CPG and Discrete Manufacturing. He has a Six Sigma Greenbelt earned from his years with GE which he utilizes to gain a deep understanding of business process challenges and the suggested integration options. He was the Co-captain of the 1979 Holiday Bowl Champions. The first Bowl game ever won by Indiana University (Bloomington) Football team.