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Consumer packaged goods firms look to step up their digital game

Livemint:  June 11, 2018

New Delhi: Digital transformation is a focus area at Hindustan Unilever Ltd (HUL), the country’s largest consumer packaged goods company by sales.

It has implemented a transformational programme called Connected 4 Growth (C4G), which has led to faster decision-making, localized and swifter innovation and increased speed to market—all driving business growth, according to its 2017-18 annual report.

Further, the use of analytics has helped the company deliver better on-shelf availability at its seven million stores, according to the report.

Similarly, “data mining and analytics” are a key priority for Godrej Consumer Products Ltd, according to its 2016-17 annual report.

HUL and Godrej are simply cases in point. Fast-moving consumer goods (FMCG) firms are implementing technologies such as analytics, machine learning (ML) and artificial intelligence (AI) to manage current and future business growth, and to become more consumer-centric.

Patanjali Ayurved Ltd, for instance, is undergoing a tech consolidation drive, “which should be over by the end of this fiscal”, according to Manish Gaur, head of information technology (IT) at Patanjali group. “We ensure three things about the tech we use: one, it should be highly scalable; two, it should be stable; and three, it should be interoperable (with other products),” he said.

While Patanjali currently uses Oracle and SAP for its enterprise resource planning (ERP) needs, it wants to standardize the applications on a single platform, SAP, according to Gaur. Patanjali is also “in talks with NetApp” for a big data solution, and also plans to use machine learning in quality control and product enhancement.

Other FMCG firms are working on similar lines. Mukesh Kripalani, chief officer (business process and IT) at Marico Ltd, said during a Mint conference recently that the firm started its own digital journey with “analytics and data” at the core of its strategy. Since it began installing an analytics-driven ‘order management execution system’ for its distributors and stockists in 2014, Marico has come a long way and is experimenting with the Internet of Things (IoT) at some of its plants.

“Around 25% of top FMCG companies in India are testing machine learning and related tools, but ‘full-fledged deployment’ is missing, as it will take more time for the data sets to be ready,” said Debashish Mukherjee, partner of consumer industries and retail products practice at A.T. Kearney, a consulting firm.

A joint study in September 2017 by Boston Consulting Group and Google Inc. estimated that by 2020, up to 40% of FMCG consumption in India—about $45 billion—may be “digitally influenced”—involving use of the internet in pre-purchase, purchase and post-purchase phases.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.