Kraft Heinz’s Latest Tech Investments Tackle Control Tower and Digital Twins
The Kraft Heinz Company is investing heavily in its supply chain resiliency as part of the next step in its multi-year turnaround strategy.
The CPG is teaming with Microsoft for a series of digital initiatives that it described as one of its largest investments to date, including migrating the majority of its global data center assets to Azure and its ERP software to SAP on Azure. It expects the change to have a significant impact on its day-to-day operations, ultimately resulting in what it described as a more collaborative supply chain.
Kraft Heinz will also leverage predictive analytics to boost its inventory transparency, thereby upgrading the company’s consumer experiences by being better able to anticipate both consumer and channel demand.
As part of this, Kraft Heinz will work with Microsoft to build a supply chain control tower, intended to provide real-time visibility into plant operations and automation of its supply chain distribution across the No. 21 consumer goods company’s 85 product categories.
It will also create digital twins for the 34 manufacturing facilities it owns in North America. There, it will use the digital twin technology to test and refine solutions and processes, including those identifying optimal product capacity and proactively addressing issues to reduce mechanical downtime.
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A joint digital innovation office is being developed by the two companies to co-engineer new digital manufacturing solutions to further drive efficiencies. This will be done also through hybrid experiences leveraging Microsoft AI, machine learning, and IoT.
The tech investments are part of Kraft Heinz’s “Agile@Scale” transformation strategy, which is the next step of its multi-year turnaround strategy. With Agile@Scale, the CPG intends to use its improved financial position to invest in technology and leverage Agile methodologies to develop its in-house capabilities through vendor partnerships.
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"Our collaboration with Microsoft is a critical piece of our transformation strategy,” said Carlos Abrams-Rivera, executive VP and president, North America, Kraft Heinz, “providing us with the machine learning and advanced analytics to drive innovation and efficiencies across the supply chain so we can get products into the market faster, better serve our customers and, ultimately, deliver on the sustained and growing consumer demand our iconic brands continue to experience.”
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Judson Althoff, executive VP and chief commercial officer of Microsoft, added that the collaboration will enable them to “co-innovate and create hybrid experiences that will ultimately put goods in the hands of retailers and consumers when they need and want them.”
First announced in 2020, Kraft Heinz’s transformation plans have included combining its U.S. and Canada businesses into one zone and naming Dafner Hefner its first chief strategy and transformation officer. Abrams-Rivera also noted during the company’s last earnings announcement in February that they’ve flattened the organization in order to scale the new solutions.
Also in February: The company released its plans to develop a new consumer data platform known as the Kraft-O-Matic. There, Kraft Heinz will leverage AI and machine learning to funnel real-time data insights to inform new products and flavors.
