The Consumer Packaged Goods (CPG) industry is experiencing rapid change fueled by digitally-savvy shoppers and a new competitive landscape. To keep up, brand manufacturers must evolve into data-driven enterprises, relying on MDM to streamline operations, drive business growth, and reduce risk.
Stuck in Silos
CPG companies have a rich history of product innovation. Unfortunately, innovation in managing and enriching product data hasn’t always kept up. Many companies in this market are still stuck in manual processes and siloed spreadsheets. Outdated systems, coupled with mass amounts of data, has created the perfect storm for risks and errors. Consumer Packaged Goods companies are also challenged by:
- High consumer demand for product information and digital content
- A boom in CPG e-commerce purchases
- New competitors and entrants in the market
- Evolving regulations on ingredients management
- Supply chain inefficiencies
- Direct-to-Consumer, (DTC) opportunities have blurred the lines between B2B and B2C
How can CPG companies overcome these challenges and turn them into opportunities for growth? Master Data Management, both for product data and across domains, is the answer.
MDM to the Rescue
MDM has come to the rescue for many manufacturers and brands in this space, providing the central hub of trusted data they need to compete in the ever-changing Consumer Packaged Goods landscape. Let’s take a look at the top benefits of MDM for this market.
Achieve a single view of trusted data
At the foundational level, the biggest benefit of MDM is gaining a “single view” of product data and content across the enterprise. CPGs must manage a growing volume, variety, and velocity of data related to raw materials, semi-finished goods, finished goods, and indirect raw materials (including packaging and machinery). MDM allows CPGs to gain control over this data complexity with a golden record of enterprise-wide information that is quickly accessible to internal users and external partners. In addition to serving as a product data hub, Multi-Domain MDM that supports data domains including Customer, Supplier, Location, Asset, etc. is extremely beneficial in helping CPGs gain cross-domain insights to power analytics and business intelligence, expanding the definition of the commonly used term, ‘Single Source of Truth.”
Drive successful e-commerce initiatives
According to Big Commerce, “Trends such as omnichannel delivery, subscription models, and personalization that may have been viewed as passing themes are now necessities in the [CPG] industry.” Nielsen projects that U.S. shoppers will spend $150 billion on sustainable CPG products by 2021. Furthermore, the percentage of online purchases in consumer packaged goods is likely to rise in the wake of COVID-19 social distancing, as more shoppers turn to online shopping for the consumable products they use every day.
To compete in e-commerce, CPG enterprises must ensure product content is enriched and omnichannel-ready. MDM with integrated Digital Asset Management (DAM) can help CPGs provide a better online shopping experience by providing detailed product attributes, images, product videos, reviews, and more. This content is necessary when supporting consumer research on the manufacturer’s product site, populating retailer websites, or when going direct to the consumers. This is often referred to as Product Experience Management, (PXM.)
Automate processes to get to market fast
Another leading benefit of MDM is the immense efficiencies gained from an automated workflow. Workflows allow individuals from merchandising, marketing, product development, suppliers, etc. to contribute and approve data via automated processes and paths. This helps CPG enterprises:
- Bring products to market faster
- Reduce errors in product data
- Quickly publish vast product catalogs
- Easily collaborate with suppliers and vendors, and
- Manage product lifecycle management (PLM) processes.
Ensure ongoing regulatory compliance
Those in the Consumer Packaged Goods market have a lot on their plate when it comes to conforming to global standards (like GS1) and meeting regulations around product safety and traceability. MDM helps CPGs maintain a clear, accurate record of product data that can help them trace ingredients and the production of their products and provide that information easily to regulatory agencies. In the case of product recalls, Master Data Management helps companies in this space act quickly to pull products off shelves and find the source of issues for an agile response that can save them millions in cost/fines and quickly regain trust from consumers.
In addition, consumers themselves demand transparency, desiring more information about the products they consume and use. MDM helps CPGs participate easily in initiatives like GMA’s SmartLabel to enhance loyalty and promote transparency for better brand loyalty and trust.
MDM Tailored for CPG Clients
Rather than taking a cookie-cutter approach to MDM, CPG companies should work with an MDM external services partner to ensure their design and solution implementation is custom-fit for their industry’s unique needs.
At the beginning of an MDM project, CPG businesses may need to adopt a phased implementation approach to ‘crawl, walk, run’ toward their goals. Working with a partner with deep industry and domain expertise can help CPG companies establish the technology and processes they need to succeed and scale.
Amplifi knows that agility is vital for CPGs. Our team has worked with some of the largest and most successful CPG companies in the world. We invite you to learn more about how Amplifi helps CPGs transform their processes and compete for today’s information-savvy shoppers.