In recent years, the consumer packaged goods (CPG) industry is in a state of constant flux. Due to a shift in buyer behavior, it struggles to balance innovation and adaptability. As a result, the established CPG brands are finding it challenging to stay relevant in the marketplace. As the CPG industry landscape is changing faster than ever before, business stakeholders embrace the artificial intelligence (AI) shift to accelerate growth and revenue. AI is a powerful technology that is helping these industries to thrive and survive in the face of drastic changes.
With the advent of digitization, the shift to e-commerce is drastic. To succeed in this transformed landscape, the CPG companies must nurture nascent capabilities and adopt new business intelligent strategies to catch up. Therefore, there is an urgent need to build a clear strategic roadmap that will enable them to bridge the gap between brand and customers. Effective use of data can serve as an entry point for the stakeholders to reorient their marketing activities. Data helps to understand the why’s and how’s of customer behavior and enables them to manage inventory levels, distribution network, and supply chain accordingly. Using AI, these companies can access a wide array of relevant data which can adequately leverage their personalization and performance marketing capabilities.
Hence, with AI, CPG industries can keep their marketing strategy in motion. It helps uncover the blind spots in the changing CPG landscape and provides real-time insights into the current scenarios to facilitate product development, brand growth, and marketing decision-making. Here are few critical use cases of AI for consumer packaged goods industry.
Supply Chain Management
Artificial intelligence enables the CPG industry to synchronize the supply and demand systems. Data unification and analysis capabilities allow the administration team to anticipate, resist, recover from any disruptions and establish a resilient supply chain strategy. It will enable them to stay ahead of changing market needs and forecast changes to respond appropriately to seasonality and demand variability. With AI, it becomes easier to optimize material, production, and distribution planning processes within the supply chain.
Reduce CPG Logistics Cost
AI-powered transportation management solutions help to develop a more proactive approach for optimizing transportation routes. Using real-time enables the CPG companies to de-risk themselves from overall market conditions to drive efficiency and reduce freight costs. AI solutions help choose the most efficient route while keeping an eye on essential factors such as traffic, delays, roadblocks, SLAs, and more. As a result, it helps to generate optimal and profitable delivery routes. The overall reduction in delivery transit also helps to reduce fuel consumption.
Automation
AI-powered automation tools help to eliminate production constraints and downtime probabilities. Automation enables stakeholders to perform day-to-day operations, including assembly, packaging, and material handling/distribution. Moreover, automation analysis can find patterns in customer behavior with minimal human intervention. It helps put the correct marketing practices in place and remove any siloes to keep you ahead of your competitors.
Customer Experience
AI enables CPG companies to develop a holistic strategy based on customer preferences and behavioral insights. The predictive analytics tool can conduct consumer behavior analysis, allowing the stakeholders to devise a successful marketing plan. It helps them pay close attention to customer inquiries and reactions and identify which group shows a better conversion probability. Hence, CPG companies can provide better purchasing incentives to potential customers. AI also helps personalize various touchpoints in the customer’s journey providing better engagement and experience, facilitating their movement down the sales funnel.
ERP Management
Enterprise Resource Planning or ERP includes systems and software to better plan and manage core organizational operations such as supply chain, manufacturing services, finance management, and more. Embedding AI into systems that perform these operations can help to accelerate the processing time of these activities with negligible errors. For example, AI-powered automation tools can perform repetitive accounting functions, verify statements and reports with accuracy. In addition, AI/ML models can test hundreds of demand forecasting models with precision while automatically adjusting to new supply chain and warehouse management variables. Hence, there are immense potential benefits of arming ERP systems with AI in the CPG industry.
Stock Replenishment
The sophisticated AI data-driven tools can analyze and interpret massive data sets quickly. This information can be used inaccurate prediction of inventory needs to avoid overstocking and out-of-stocks scenarios. AI provides better visibility into the current market trends to extrapolate the future. It can access and record inventory without any error, which is crucial as inventory is costly. Hence, AI helps the CPG industry in automated stock replenishment. It also allows the stakeholders to choose the optimal replenishment strategy that guarantees maximum productivity.
To Conclude:
Integration of AI in various operations of the CPG industry, including supply chain and distribution network optimization and customer acquisition and experience, can help these companies to maintain a strong foothold in the turbulent and ever-changing market. In addition, it will help the stakeholders to achieve better flexibility, scalability, safety, and capital ROI while satisfying the market demand every day.