Catering To The Customer

Most conversations with consumer goods executives ultimately lead to their desire to better understand and adapt to both customers and consumers. This month, I had the opportunity to sit down with George Taylor, director, consumer packaged goods, manufacturing for Microsoft Corporation, who is responsible for creating Microsoft's industry strategy and driving the Microsoft platform and product solutions. In our conversation, Taylor offered his perspective on industry trends, Microsoft's go-to-market strategy and the unique needs of SMB versus Tier-1 manufacturers.

 

 

TAYLOR: The CG industry is facing several major forces, including the need to drive product innovation, build customer centricity, strengthen and streamline value chains, and improve operational performance, that greatly impact the way that CG companies operate and remain competitive.

 

Like most industries, globalization created increased complexities for consumer packaged goods (CPG). There is a more intense focus on supply chain efficiency and visibility as manufacturers work to balance inventories and costs across global markets.

 

There is also a much greater focus on customer demands. Consumers have become extremely sophisticated and specific in their preferences and are now driving the industry as never before. Consumers expect manufacturers and retailers to continually innovate and keep up with changing tastes, packaging preferences, stock availability and competitive costs. Varying preferences across markets and consumer groups have forced CG companies to more quickly adapt to changing customer needs. There is also pressure to provide a greater focus on the consumer experience and customer service, which has shifted the power in the industry from the manufacturer of products to the retailer, who has direct interaction with the customer.

 

CG companies face other challenges, including new regulations, industry standards and mandates that require rapid adjustments for compliance, while facing greater competition from large and niche companies. The crowded market also demands tight margins to keep costs competitive for savvy consumers.

 

Combined, these industry forces create a challenging environment for CG companies who want to earn consumer attention and loyalty while keeping the company strong throughout industry changes.

 

 

TAYLOR: Most executives are looking to provide greater visibility, integration and collaboration across supply chains and operations to increase efficiencies and maintain operational quality and consistency. The goal for every executive is to improve quality while reducing plant downtime and streamlining supply chain operations. We have many customers who have achieved this by combining Microsoft's single, integrated platform with partner solutions.

 

Gallo Glass, a glass bottle manufacturer, for example, deployed a Microsoftbased MES solution to provide better control to its manufacturing process and visibility across the enterprise. To collaborate between the systems, it implemented collaboration technologies, which provided not only visibility and dashboards, but a way to communicate across all roles within the organization. This solution resulted in a $5 million annual improvement in case pack, 25 percent reduction in defects and a 25 percent reduction in plant downtime.

 

Similarly, Benefit, a makeup brand, needed to reduce supply chain and inventory costs, and implemented a Microsoft-based ERP solution to eliminate costly charge backs, save millions with tighter inventory control and improve relationships with retailers. Black and Decker is another example of a company that experienced 10 percent to 38 percent inventory reductions by implementing software solutions that addressed its supply chain issues.

 

In addition to improving operations, companies also want to enhance collaboration across global teams to help foster communications for development teams, create environments for decisions to be made faster and better and to accelerate development outcomes. Again, the Microsoft Manufacturing platform and partner ecosystem helped yield real results for this business need.

 

Procter & Gamble uses Microsoft collaboration technologies across its enterprise and to key suppliers. The company has seen significant increases in collaboration activity among its worldwide workforce of 100,000 people. The increased collaboration allows it to stay on the cutting-edge of product development and innovation and meet customer needs.

 

 

TAYLOR: For Microsoft, the key to our strategy is to listen to our customers about the current challenges they face today and the potential trends that will affect their business tomorrow. We work with our partners to shape the solutions that will most directly meet the challenges in the industry and yield real results. The Microsoft approach is to provide platforms that enable business solutions and people-ready companies to meet industry challenges and business needs.

 

Microsoft is making major investments in the consumer goods industry and our goal is to bring real business value to market in collaboration with our partners. Further, we have a similar focus in the retail space, in a sister organization, which provides us a unique opportunity to look at the issues across the entire supply chain. We can work with the collective groups to provide solutions that meet the needs of both CG and retail customers alike.

 

We see four key solution areas in the market: product lifecycle management, plant operations and lean manufacturing, customer centricity and supply chain management. These four areas address the main challenges we hear about from customers and industry insiders. The accessible and cost-effective solutions we're providing with our partners in these areas are yielding results that customers need.

 

 

TAYLOR: Microsoft has made several business solution acquisitions and investments in consumer goods to be positioned as enterprise credible. Tier-1 manufacturers can confidently find solutions with Microsoft and our partners across the industry.

 

We understand the additional complexities that most tier-1 manufacturers face with a large global presence including escalating supply chain costs and demands on meeting market expectations quickly and consistently. Microsoft is committed to creating and evolving the world's most comprehensive collection of supported, connected and innovative software that helps companies achieve better results. This commitment has made Microsoft and Microsoft partner solutions enterprise-ready and fully capable of providing solutions to the industry's largest players.

 

At the same time, our partner solutions work in conjunction with Microsoft software that is familiar and available at most companies, large and small. This has made Microsoft solutions accessible to small and medium companies that have previously been unable to participate in solution upgrades due to initial costly investments needed for some providers. We will continue to serve small and medium business needs and enterprise needs, well. CG