Mobilize AI to Elevate Your CPG Company

warehouse worker
Date: July 12, 2020

Artificial Intelligence (AI) radically changes the way we understand behavior purchasing and consumption habits. We use this knowledge with improved visualization to optimize the Consumer Product Goods (CPG) value chain, thus generating new opportunities. The following examples indicate how AI both improves upon and affects various aspects of CPG companies:

 A) CPG Customer Experience:

AI’s ability to learn from changes in shopping habits by detecting variations in their behavior through performing trillions of calculations automatically, allows a prediction of demand with high accuracy level.

This technology is applied throughout the CPG value chain, from product design and presentations, production and distribution logistics, to setting the right prices and selecting commercial actions that accelerate the sale.

B) Production Programming:

AI predicts sales of future months with a great deal of precision, which gives manufacturers collaborative visibility into production planning requirements.

The granularity of predictive information, even in complex product portfolios, supports productivity by avoiding waste and over-inventory. In addition, it allows for quality control, maintenance scheduling and efficient management of raw material and finished product inventories.

C) Delivery Logistics:

A forecast of product/store demands in detail by day and with the geographical location of said sale, allows optimal planning  for delivery logistics  in time and quantity. This also optimizes  the inventory of the distribution centers.

D) “Socialized” Predictions Between the CPG and its Customers (Retailers):

With reliable sell-out predictions per store, the optimal order can be agreed with the chain for each of the stores, which reduces the out of stock goods, maintaining the necessary supply.

E) Assortment:

By using AI we allow for the right portfolio assortment and in necessary quantities per store cluster. We do this most predictively, which of course, maximizes the revenue for both the chain and the CPG.

F) Right Prices

As a causality effect, the AI relates a level of sell-out sales at a given price, and it does so per day, product, retailer, channel and region, thus defining the correct price level for any future month and within the planning scope of a CPG.

G) Decision Making:

If we allow for the unlimited possibility of generating optimized scenarios in a reduced time, we may visualize the future impact of the decisions that CPGs would be making today.

The dynamic nature of predictive solutions, based on Artificial Intelligence and Machine Learning, generated by the ability to learn continuously, allows decisions to be made with a high level of certainty.

The following are examples of AI’s influence on CPG Optimization:

Commercial Investment:
The AI allows us to identify, measure, and predict the optimal mix of commercial investment:

  1. What products to promote and to what magnitude.
  2. The optimal depth of discount for each product.
  3. What type of promotion, when and where to use it optimizing the CPG revenue
  4. How cross elasticities, cannibalization, is predicted in the CPG portfolio and interaction with that of its competitor.
  5. All of the above, with a comprehensive visualization of the impact on the total CPG portfolio.

Other Applications  For Your Investments:
Along with the causality effect, and with the possibility of tracking a commercial action linked to a product, it is possible to predict the impact of various actions:

  1. Additional exhibitions.
  2. Rent of headboards or special spaces on shelves. 
  3. Publications in promotional brochures in retail.
  4. Actions by promoter and development of the point of sale.
  5. Advertising in traditional, digital, and unconventional media.

 Implementing a Predictive Solution in a CPG:

To concentrate the relevant functions for revenue optimization, a changed organization must accompany the CPG revenue being enhanced, which is accomplished by using a predictive solution’s correct selection. We then provide this role with the necessary support structure. In closing, Wise Athena would love to be of service and introduce your CPG company to the implementation and optimization of precision AI, a predictive solution that yields increased sales and margins by improving pricing and trade promotion strategies. Our goal is to work alongside you through this path of discovery. Wise Athena is a positive, motivating, team that aids you in the decision-making process by utilizing the overall predictive certainty of AI. Seize the opportunity to learn and grow your company’s revenue by letting Wise Athena meet your CPG needs!

Wise Athena would love to be of service and introduce your CPG company to the implementation and optimization of precision AI.

Written By Octavio H.
Co-Founder and Vice President at Wise Athena, with 24 years of experience in CPG companies, responsible for the management and global expansion of the sales team, including Mexico, LATAM and United States.

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