Supply Chain Shaman

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Yada Yada: Nada Nada

Monkey see.  Monkey do.  Yada yada and nada nada rings in my head as I leave the Consumer Goods Technology (CGT) conference.  It sounds like the same yadda yadda and nadda nadda that I have heard for five years.  Let me check my notes….
Yes, it is!  This year’s CGT event on October 24-25th had little newness.  It was largely a discussion of industry leaders following industry leaders.  Despite high costs and budget pressures, consumer products companies are still on a forced march to implement Enterprise Resource Planning (ERP).  The high level concepts of the value chain and building a better consumer response remain largely unchanged from prior years.  The networking was great, but the program content was largely a re-run of prior years with different actors.
Let me start this blog with a disclaimer. The consumer products industry is blessed to have CGT.  The organization does a wonderful job of organizing share groups, hosting events and listening to executive input.  The organization puts on great conferences.  However, at this year’s CGT conference, I found the discussions in the hallway to be more helpful than the program itself.  The discussions were full of what we should be talking about, but were not covering on the main stage of the conference.

Why are we not talking about that…?

Here are the topics discussed in the hallways that captured my interest:
Downstream Data.  Downstream data is at a tipping point in three areas:  channel availability of data, evolution of predictive analytics to use the data and the redefinition of processes to use the data more holistically (demand sensing).  In the hallways, consumer products companies were debating what to do about:

  • Kroger.  The availability of daily data is growing.  Kroger’s sharing of daily data will improve channel concentration of available downstream data and can make outside-in processes even more valuable.  Companies are excited about the availability of Kroger data but have strong concerns on the structure of the program for data sharing.   The questions are:  How do I best adapt what I am doing to include Kroger data?  What are others experiencing in the program?  How do I go forward.
  • Wal-Mart.  Reversing a shift that happened in 2001, Wal-Mart data is going to now be reincorporated into the syndicated data pools (IRI and Nielsen).  The top of mind question is:  Do I need to continue on this downstream data path at all since Wal-Mart data will now be part of the syndicated data pools?

My Point of View (POV):  Get the Kroger data.  Harmonize the data yourself and learn from the demand insights.  Build the capability to harmonize, synchronize and use this data.  While I am big on the cloud, I think that the use of downstream data is too new to outsource to a third party.
As for the question on Wal-Mart, the answer is “don’t go back.”  Syndicated data’s place in the value chain is in marketing analytics:  market share and category management analysis of campaigns.  It is expensive, late and more inaccurate than most executives would like to admit.  It is not a substitute for downstream data to meet the data requirements of sales reporting, demand sensing, more effective replenishment, supply chain planning processes or analyzing market data for new product launch.
Lets get on with it!  The hallways discussions were buzzing.  The crowd is growing weary of the over use and misuse of the term Demand Signal Repository (DSR) and the lack of market momentum on building better solutions.  In my opinion, it is time for a market roll-up.  I would love to see the combination of Vision Chain/Enterra Solutions.  For smaller organizations, this could also be a combination of Shiloh and ToolsGroup.  For apparel it could be VMT and Logility….  For IBM clients, it could be a Relational Solutions/Netezza/Cognos appliance.
My POV:  Lets get on with it!  It is not enough to just have the persistence layer.  We are stuck at a tipping point where data is more available and technologies are more mature.  Let’s couple the persistence layer with predictive analytics to make better use the data.  And, let’s use the data not just in one organization, but horizontally across the company to sense and shape demand. (A database for sales that uses downstream data for sales reporting is not a DSR.  Can we stop misusing the term?)  My wish is that we make it easier for the buyer to buy what they need to use the data.  Let’s tip it over!  It is time to move these technologies to mainstream adoption at an enterprise level.  I feel that we are stuck because of sales-driven vendor processes.
Collaboration.  At the conference, the word collaboration is used often and furiously with little true progress over the past five years.   Enterprise applications are still faceless. We share data, but we do not truly have collaborative processes or applications.  As a result, trading partner programs are largely one-off and short-lived efforts because of the lack of aligned incentives.
My POV:  Can we talk about how we change the game?  Could we discuss how things would change if retailers paid based on sell-through versus sell-in into the channel, a change in bracket pricing based on forecast accuracy (those that have better data would be rewarded), or how those who provided daily clean data would get preference for trade funds?  In my opinion, we need to put money where our mouth is and stop playing “Kumbaya”.
Digital Path to Purchase?  The hot topic in the hallway was the use of digital technologies to streamline the path to purchase.  This convergence of social/digital media/mobile and analytical applications more effectively enables the shaping of demand, the stimulation of trial and the sensing of customer insights.  I found the swapping of stories and techniques in the hallway as fascinating as its absence on the main stage.  I also found the absence of social  technologies — 8th Bridge, Bazaarvoice, Payvent Shop Ignitor,  Zuberance–fascinating as well.
Channel Shifts.  Few were talking about the changing format of the retail store, but many were discussing the rise of eCommerce for consumer products.  Sales of product to Amazon have doubled year-over-year, and while the percentage is still small, companies are starting to talk about the impact to the overall channel.  What I did not hear, but would have liked to have seen on the main stage is an open discussion from Amazon on how consumer products companies can use their new capabilities to test and learn, and gain early feedback on new product launch.

Best of Show

In a moment of weakness many years ago, I agreed to show dogs.  I traveled to dog show after dog show to compete for the coveted prize Best of Show.  The competition for Best of Show is fierce and coveted.  I never won.
My award for Best of Show at the event goes to Randy Benz, CIO of Energizer Holdings for his presentation, When Consumerization meets the Cloud. Unlike CIOs that have short tenure in their job (most less than 3 years), Randy has been the CIO of Energizer for 17 years.  I find him refreshingly honest and pragmatic.  The point of his presentation was that while there have been many technology boom and bust cycles, the biggest change of all is the Radically Different Expectation of IT.  In his presentation, he profiled two IT paths:  the enterprise experience  (an IT process of select, build, install, configure (with lots of help), test and use) versus the personalized experience of Google, mobile applications on the iPad, TXT messages and social networking where users just find and use what they need.  Randy’s point is that it is time to step back and learn from the fact that there is no “manual on how to use Google“, that tight integration leads to projects that never get completed, and that the incentive for IT should be usage.”  In Randy’s words “reward IT when it goes viral. “
Randy is retiring soon.  I will miss him.   It was great to see his crusty wisdom showcased on the stage before he leaves the industry  It was sage advice from a CGT veteran that never went Yadda Yadda and Nadda Nadda.  In my opinion, we need more like him.  Randy’s presentation was anything BUT “Monkey See Monkey Do”, and I found that refreshing!  Good luck Randy in your retirement!

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