2005 CGT Conference Re-cap

12/1/2005

Now in its sixth year, the 2005 Consumer Goods Technology Conference brought together a plethora of consumer goods business and IT executives from companies, like Coca-Cola, Georgia-Pacific, Johnson & Johnson, PepsiCo and Revlon, to exchange thought leadership and strategic insight under the theme, "Insights to Action: Accelerating Business Performance with Enabling Technologies". Industry experts and analysts lead discussions focused on driving growth through innovation, execution and brand value, addressing topics such as customer profitability, product lifecycle management, RFID, demand forecasting, sales and operations planning, and trade promotion management. Here are just a few of the many conference highlights:

An independent study conducted by the University of Arkansas revealed that Wal-Mart stores equipped with RFID technology are seeing a 16 percent reduction in out-of-stocks. According to Wal-Mart Vice President of Information Systems Dan Phillips, reduced out-of-stocks are just the beginning. In his keynote address, Phillips shared specific examples of how Wal-Mart's 130 suppliers both small and large are realizing significant benefit from the use of RFID technology such as improved quality control, increased productivity and end-to-end supply chain visibility.
According to the "2005 Consumer Goods/Retail Shared Strategy Study" from CGT, RIS News and Forrester Research, 75 percent of retailers indicate they are now working with trading partners on demand planning and forecasting efforts. Christine Overby, principal analyst for Forrester Research, discussed this finding and the state of retail/manufacturing collaboration with panel of experts from Associated Wholesale Grocers, Bi-Lo/Bruno's, Nestle Waters/Perrier Group and General Mills.
The inability to meet consumer needs is the biggest driver for product launch failure at 46 percent. PepsiCo's Rob Le Bras-Brown, director/Packaging Innovation, compared his experience implementing the process roadmap Stage-Gate -- which offers a disciplined yet flexible approach to managing new product introductions -- at both a leading color cosmetics company and PepsiCo.
Consumer goods companies allocated 2.8 percent revenues to IT budgets in 2005, but IT spending is expected to grow 4.1 percent in 2006, according to AMR Research's Kara Romanow. She and a panel of consumer goods executives examined these and others findings from the "2005 AMR Technology Trends Research Study" including: 43 percent of IT investment is shaped by consumer-driven issues; the $662 million spent on RFID budgets in 2005 is expected to increase to $1.2 billion in 2006.; and 65 percent of CG companies consider customer compliance to be the No. 1 business driver for RFID investments.
DSD total share of packaged food equals 21 percent of space, 25 percent of sales and 52 percent of profit. During an event workshop, Coca-Cola's VP of Business Development Anne Dozier and Kraft/Nabisco's VP of Customer Logistics Dale Brockwell shared how CG companies can drive DSD supply chain capabilities and efficiencies.
Don Davis, VP of Materials Management for Revlon, revealed how an inventory transformation project reduced Revlon's overall inventory 26 percent while meeting a 97 percent fill rate target.
While some consolidation exists, competition is driving many retailers to differentiate themselves from the pack. In the closing keynote panel, executives from three of Wal-Mart's key suppliers -- Bell Sports, Johnson & Johnson and Kimberly-Clark -- discussed the challenge of meeting multiple customer requirements and prioritizing IT investments to meet those requirements. "The most significant challenge for us is to identify what is truly going to drive incremental growth for both our retail friends as well as for ourselves," said Mike Haas, VP and Group CIO, Johnson & Johnson. "Certainly the retailers that are the most eager to collaborate are the situations where we have the most opportunity to find those incremental growth opportunities."