The events of the past few years have transformed the way supply and demand works for consumer packaged goods (CPG). This transformation has been shaped by a variety of factors such as climate change, geopolitical tensions in critical areas like Ukraine, the global economic downturn and uncertainty, as well as changing demographics across the globe due to population shifts.
These events have not only disrupted the flow of raw materials essential to everyday goods but have also influenced buyer behaviors and brand loyalty. Overall, they have created a perfect storm of complexity at a time when value chain optimization and decision-making have never been more vital to enterprise health. And considering supply chains directly influence 50% to 75% of an organization’s total cost of doing business, it has become all the more important for the business to have an efficient and resilient supply chain in order to survive and stand out in the market.
Technology’s role in addressing supply chain challenges
Technology can play a key role in ensuring an efficient and resilient supply chain through intellectual leveraging of data. But as straightforward as it sounds, it is not that simple. As many organizations learned from the pandemic, these data foundations are only as strong as their ability to act on them accurately with speed and at scale. Gartner’s research has found that more than half (52%) of digitally enabled supply chain decisions “came too late because of the amount of time it took to conduct digital trade-off analysis,” highlighting the growing need for more integrated, agile, and autonomous capabilities.
Thus has arisen a new solution architecture called System of Intelligence (SOI), a fit-for-purpose tool that can fundamentally understand the environment in which a business operates and then autonomously implement and adapt value chain optimization and decision-making strategies to align with evolving conditions. Through the integrated adoption of SOI architectures, CPG and retail organizations can harness their data for mitigating risk, managing volatility, and maximizing business value despite the chaos around them.
A further look at the system of intelligence
The System of Intelligence can integrate with an organization’s existing systems of record (SOR) and engagement (SOE) applications, fusing human-like reasoning and generative AI with machine learning and nonlinear optimization. It serves as a company’s centralized “brain” that automates analysis of large, complex datasets to generate insights around supply chain optimization, as well as consumer preferences, revenue growth opportunities, and forecasted demand.
SOI also facilitates the continued implementation, monitoring, and refinement of those insights across the value chain. In turn, this helps build resilience against market volatility and enhance the enterprise’s competitiveness as it becomes more effective in making sound, critical decisions thanks to the amount of data being processed.
Driving Successful System of Intelligence Adoption
Given its benefits, more enterprises are looking to adopt a solution based on the System of Intelligence architecture. But to ensure its success, businesses must first establish a strategic approach built around the intersection of value realization, data maturity and subject matter expertise. Such an approach requires three important elements in place:
Identification of manageable and impactful use cases that can realize quick value from the enablement of the SOI architecture. Limiting the initial pilot to one or two significant categories ensures it’s manageable but still provides a large enough model to build a compelling business case for full-scale deployment around it. Doing this can help secure collective buy-in among other potential stakeholders to enable efficient change management processes during implementation.
Sufficiency in data foundations. One of the functions of System of Intelligence is human-like reasoning on data pulled from several different sources, As such, data maturity is critical and nonnegotiable. Organizations must ensure their data foundations are robust, secure, and stored in cloud-based environments to allow for seamless accessibility and integration.
Have the right people in place. As leveraging solutions that incorporate human-like reasoning and autonomous decision science tends to be complex in nature, it is important to have internal alignment and access to subject matter expertise to effectively facilitate the end-to-end implementation life cycle and scale the usage of System of Intelligence over time. Aligning the internal business, technology, and data teams and working alongside established external partners with subject matter expertise ensures the enterprise has the right people to guide them through a successful SOI implementation.
The System of Intelligence represents a powerful paradigm shift in how enterprise data will be utilized to drive value, competitiveness and resiliency moving forward. In the CPG setting, enterprises that embrace SOI adoption will be positioned to not only navigate the challenges of 2024 but also unlock new levels of customer visibility, operational agility and sustainable growth.
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