How FritoLay, Engie and ASU are building continuous data loops for customer gains
- 19 November, 2019 11:54
Building a universally informed, data-driven system incorporating granular insight on end-consumer demand as well as the supply chain is key to FritoLay as it works to meet the changing snacking needs of consumers.
Speaking on a customer panel in the lead-up to this year’s Dreamforce, the PepsiCo-owned company’s SVP and chief transformation and strategy officer, Michael Lindsey, said his team is trying to cope with more complexity as consumers look for more variety in their snacks. It’s a shift that’s seen FritoLay’s product lines explode to 1200 SKUs, prompting a digital transformation and rethink of the way the business operates.
Adding to the complexity is the fact consumers are buying in places they never used to shop like ecommerce, and with click-and-collect, new mobile payments and more, Lindsey said.
Six of FritoLay’s 30 brands are worth more than US$1 billion, and the group boasts of 94 per cent US household penetration. The FMCG controls the end-to-end value chain from seeds and farming through to sourcing, manufacturing and running the fleet putting goods into stores.
“If we want to get to that last bit of growth and consumption, we have to make sure we deeply understand each individual consumer in a way that also adds value to the retailers,” Lindsey said.
“By understanding how a consumer moves across different occasions, how they represent their time, if they’re a shopper, mother, what role they’re playing at that time, we can add value to retailers and hopefully tailor our snacks over time to supply what those consumers need.”
Historically, however, FMCGs like FritoLay haven’t had line of sight to the end consumer. So it’s building first-party consumer relationships in order to understand snacking at the individual level.
This can help identify trends to gain competitive advantage. One example Lindsey pointed is identifying and addressing growth in seaweed-based snacks.
“We can’t adapt if we do what we did in the past, which is one-size-fits-all. We need a granular, micro view of demand,” Lindsey said.
But also vital in this quest is linking such demand signals to production signals, he said. “Previously, the fact there was siloed data meant we’d produce to inventory then supply that out. By taking on an end-to-end digital transformation, we can take store level to individual outlets, aggregate and create production plan down to SKU,” he said.
FritoLay calls this ‘Precision at scale’. It’s work requiring sensors at every step, Lindsey said. For instance, he noted potatoes in small bags are different to those used to create chips in big bags. This makes it critical to link potential rising demand for smaller bag sizes to the farm.
“We have to thread demand signal all the way back to the farm,” Lindsey said. “It’s an immense challenge. Embracing that fundamental complexity is a cultural shift for us. To get that 1 per cent of growth, is to go after every micro moment of demand and fulfil it at scale.”
Lindsey’s big lesson is digital transformation must be a truly end-to-end exercise.
“If you can’t match demand to that supply, you end up with a highly inefficient system. That’s what lots of people miss this when it comes to digital transformation – you end up focusing just on digital understanding, or consumer understanding, or just go-to-market understanding,” he said. “If you don’t get that end-to-end view across all of them, you miss all those interconnections, and that is where value is created.”
In the past, companies like FritoLay would build efficient connections piece to piece, eliminating complexity in the technology systems and chain. “Today, it only works with modular supply chain with data connecting the whole thing,” Lindsey said.
Helping do this is Salesforce’s platform connecting data across the channels. “Historically, we’ve had ecommerce channels, key account channels… up and down the street channels. Salesforce is put against each of those, and what happens is you start to connect each, and information across these shows you insights across those channels,” he said.
“Connecting across breaks down channel silos from the front-end forward. Then connecting all data that generates back into the supply chain, ensuring all customer data and sales demand, then connecting it back to supply chain so you get real-time visibility, is critical.”
Ultimately, this will help FritoLay achieve that ambition of “delivering precisely what food they want, precisely where they want to buy it, in the pack, season, and with the flavouring they want for that occasion with that person at that time of day,” Lindsey added.
Engie’s data push for zero-carbon energy
Sensors, vast amount of data and blockchain are also vital to Engie as it institutes digital transformation across the organisation. The energy producer’s VP and chief digital officer, Yves Le Gelard, said data is vital to addressing its ambition to bring zero-level carbon to companies and consumers.
The company claims it’s reinventing off the back of the issue of climate change, disposing of US$15 billion worth of coal and reinvesting into sun and wind energy. Again, it’s a shift requiring a culture and sales philosophy rethink.
“We used to sell energy, and the more the better; right now, our 150,000 staff are engaging with customers to save energy and sell less – less is more. That’s a complete shift,” Le Gelard said. “To be successful at that, we have to understand precisely the carbon footprint of our customer. You need data, software and a world of digital technologies.
“If you want to seriously address the zero-carbon agenda of many organisations, you need to understand where carbon is being burned.”
Green energy also presents the challenge of being intermittent. “To be able to understand and constantly match, you need to understand at which moment there is a particular need,” Le Gelard continued.
“It’s about the millisecond you need to supply electricity and where helps to prevent things like power outages. Sharing data end-to-end, and ensuring artificial intelligence technology is being mobilised, is so key to this transition.”
The other side of the equation for Engie is helping customers understand how to behave. “You need to explain consequences of behaviours to millions of customers and users,” Le Gelard said.
Building customer trust with blockchain
Panellists also discussed the role of blockchain in building the data-driven trust ecosystem required for customers of the future. An example Le Gelard pointed to was a request from local government ensuring electricity came from a specific field in its jurisdiction.
“We used blockchain to ensure the electricity being burnt comes from that field. It’s a move to decentralisation, where communities take step so what is being produced at home is being used at home. It travels less and create less carbon,” he said. “Blockchain is helping create right kind of trust. We see suspicion of many kinds and it harms more than helps. The way to fight back is to leverage this sort of technology.”
Over at Arizona State University, blockchain is giving students access to their own academic data in order to share it with multiple learning providers. CTO of EdPlus at ASU, Donna Kidwell, linked this to the education provider’s overarching ambition to support continuous learning.
In this vein, the education provider has spent the last 18 months working with Salesforce to rethink learner accomplishments from a linear to circular way, allowing learners to own data into their many-faceted aspects of skilling up using blockchain, Kidwell said.
“We’re Using blockchain, but there are a variety of trust-based technologies we’re interested in... We want learners to have their transcripts, control them and share with their own design with those they want to,” she explained.
“Thy can craft their own narratives so they can express they did a sustainability project in their neighbourhood that’s completely unrelated to the set of classes they did but made sense for them and the path they’re charting for themselves.
“We are doing that at same time as a digital transformation around the reality of our campus, universities, and student data as we know them. We’re working to transform the institution while having the learner at the centre.”
- Nadia Cameron travelled to Dreamforce as a guest of Salesforce.
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