Competition in the consumer packaged goods (CPG) industry is fierce. Whether you are a CPG distributor, wholesaler or retailer, you are likely working to improve efficiencies, reduce costs from your supply chain and manage margins to squeeze as much profit as you can from every transaction.
A recent McKinsey & Company survey of North American consumer-packaged-goods companies found the gap between industry winners and losers in terms of sales growth “has narrowed significantly” decreasing from 5.4 percentage points in 2014 to only 1.1 percentage points in 2016.
In other words, companies are struggling to differentiate themselves. One way that many experts agree can help companies stand out from the crowd is using data and analytics to improve their operations, from launching new products and eliminating dead stock to monitoring trends and managing product assortment. Winning companies, says McKinsey, recognize the value of data and have executives that are “twice as likely to view advanced analytics as critical to business strategy.”
A commitment to data and analytics is a key to market differentiation, but only a handful of companies are using data effectively. A Grant Thornton survey of food and beverage CPG companies found that less than a third are turning their data into actionable insights and only 40 percent are confident in how they are using big data.
Accenture found that while 54 percent of CPG executives believe their businesses have a fully defined analytics operating model, only nine percent say their companies have implemented the model completely across their operations. The research further indicates that for many, the data is simply providing a historic perspective of performance rather than “forward-looking insights” that can be used to make more strategic, educated business decisions.
Data and analytics are a “top-three investment priority for the next three years” for CEOs according to KPMG's 2016 CEO Report, and companies are investing billions in data programs. While the understanding of the value of data is there, what data is important and collected, and how the data is used still remains a challenge.
McKinsey suggests three ingredients to maximizing the potential of data and analytics in consumer goods businesses.
- “First, companies must be able to choose the right data and manage multiple data sources.
- Second, they need the capability to build advanced models that turn the data into insights.
- Third and most critical, management must undertake a transformational change program so that the insights translate into effective action.”
In this eBook, we will focus on the top KPIs consumer goods businesses need to know and measure; the importance of finding the right business intelligence tool to help aggregate, slice-and-dice, and analyze your data; and how this data can benefit you in multiple areas and activities within your business, from launching new products, and tracking product sales, to identifying trends and margin analysis.
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