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Disruptions in the CPG World

What to do now and how to prepare for the future?

CPG commerce is global and regional at the same time. The world is getting smaller, flatter, and -as seen during this COVID pandemic- less certain. Consumers are ever more conscious of value, health and environmental issues and this crisis will simply increase that trend. The e-commerce will continue to expand at an ever-faster pace, most likely increasing the portfolio of subscription programs for consumer products.  

In this most competitive environment, a consumer products manufacturer needs to revisit its manufacturing and supply strategy, collaborate with retailers to bid for the high-margin shelf space, keep those shelves stocked, work with e-commerce profitably and maintain operating margins when post-COVID days bring permanent changes.  No one really knows what the steady-state will be after this global transition period. However, every CPG company will revisit its strategy, tactics, and operations. 

With significant innovation deployed at many global CPG clients, Solvoyo is ready to help you deal with and transition out of the COVID days, maintain or gain market share through such critical initiatives as a digital twin, “total cost to serve” modeling, product portfolio analytics, and end-to-end supply chain planning. 

Demand Sensing

Solvoyo’s Elevation Platform automatically analyzes -when made available- demand drivers including point-of-sale (POS) data, competitive price index, promotions, special days, and calculates the level of impact of each driver to reflect its effect on the baseline demand forecast. Also, Solvoyo’s AI/ML-driven Best-Pick forecasting approach adjusts to sudden changes in demand signals automatically with the appropriate history length and the forecasting algorithm.

Our CPG clients detected and adjusted to COVID-19-related demand signals rapidly and re-planned production and distribution to match the new normal. The key was the automated links to the POS data of a few large retailers used in our automated systems to predict a different order profile from its retail channel – within hours. Further, the automation in the Solvoyo platform created the necessary alerts for the management and the dynamic rules in fulfillment kicked in to create the optimal allocation when the orders started coming in.  

Automated Product Segmentation

Solvoyo’s Elevation Platform automatically segments inventory in multiple dimensions, going way beyond the classical ABC segmentation, and adjusts the service level parameters and updates the safety stock targets. Similarly, any changes in vendor lead-time trigger analyses on inventory investment, and re-planning of procurement and production.  For our clients, soon after COVID-19 hit, the signals from the market as well as the POS data available from many retailers triggered the re-optimization of inventory targets at the SKU-location level that got reflected on their procurement and production plans. 

Scenario Planning

When the demand patterns shift so rapidly, it takes a solid planning system to produce the right SKU and hold the right inventory mix. Solvoyo’s CPG clients benefited from the what-if scenario capabilities to compare plan options (with different objectives and/or constraints) easily, detect exceptions instantly, and take the appropriate actions rapidly.

Adapting to Workforce Disruption

Most countries all over the world are asking their citizens to stay indoors. However, those countries still rely on a few key CPG companies and their employees to go to work and produce critical supplies, especially in cleaning and personal care. With Solvoyo’s optimization-powered engine, production planners are able to re-optimize their capacity plans based on changing workforce availability.

Exception Management

Our web-based platform serving from the cloud provides fully configurable UI components for automated data analysis, descriptive reports, diagnostic reports, predictive alerts, and KPI tracking. Exceptions and alerts are configured to provide end-to-end visibility across your entire supply chain network. For many of our CPG clients, the real-time “exception and alert mechanism” covering all supply chain functions enabled fast response to the COVID-19 new-normal as well as tactical what-if analyses to prepare for the post-COVID-19 world. 

Vendor Collaboration

Frequent and meaningful communication with your supply sources – vendors and factories – is a good business practice but matters more during times of crisis such as COVID-19. Suppliers value early communication of changing demand and order updates, especially if they get those updates immediately. Solvoyo clients made use of our collaboration platform for proactive communication by sharing production forecasts, purchase order plans and asking for updates on new plans, open POs, changes in shipment dates and possible due-date violations.

Transportation Planning

With our multi-stop, multi-modal and multi-objective transportation plans, planning process is initiated with the right plan and executed either fully or with minor edits due to operational exceptions. Even though last-minute changes on the plans might result in higher total-cost-to-serve rates, keeping the record of edits and reason codes help our customer gain visibility and improve our AI-driven platform’s recommendations.

Supply Chain Network Design

Even before this crisis is over, more companies will have to design a resilient and robust supply chain. The leaders must have capabilities to optimize their production and distribution networks for macro adjustments by evaluating many what-if scenarios on that network.

Solvoyo offers you the ability to build a high-fidelity digital twin and answer important questions using a Total Profit model under such objectives as Maximize Profit, Minimize Total Cost, Maximize Service or a combination of these objectives using Goal Programming.

Currently experiencing disruptions in your supply chain? Let us help.

More COVID-19 Resources

 COVID-19 Supply Chain Planning Best Practices

COVID-19 Supply Chain Planning Best Practices

Learn More 

 Coronavirus & The CPG World: Blog

Coronavirus & The CPG World: Blog

What to do now and how to prepare for the future? 

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