CPG partner conversations: How DXC is turning disruption into opportunity in the CPG industry

The COVID-19 pandemic created unprecedented disruption to businesses and global markets. Although most of the world appears to be past the uncertainty and turbulence of the pandemic, companies, especially in the consumer packaged goods (CPG) industry, continue to deal with major challenges, like supply chain disruptions and labor shortages. At the same time, consumer buying patterns and expectations that shifted during the pandemic have become the norm. Now more than ever, CPG leaders must think strategically, with an eye toward innovation and agility, to address the continued market volatility and shifting consumer preferences. To gain insight and inspiration, we’ve embarked on a series of conversations with executives from Amazon Web Services (AWS) Partners to showcase their leadership and expertise in challenging times.

For this blog, we talked to Jason Evans, director of DXC Technology (DXC), a leading provider of critical IT services, on the importance of technology in helping companies navigate the disruptions and opportunities in the CPG industry.

AWS: Help our readers understand your vantage point. What’s the space you play in, and with what type of CPG executives does DXC interact?

Jason Evans: Though the CPG industry is rapidly changing, our customers are focused on consistent growth and performance. To succeed, customers need to use the advantage of scale while incorporating lessons from the new players. DXC works with CPG business and technology executives to address the changes and challenges that the COVID-19 pandemic has accelerated. We regularly engage with leaders who are focused on:

• Growing revenue by using technology to transform their business and reclaim strategic differentiation;
• Improving the consumer experience through the increased use of data and digital technologies; and
• Increasing supply chain efficiencies by modernizing IT and optimizing business processes.

AWS: CPG companies have been managing through unprecedented disruption. What have been the biggest challenges for your customers?

Jason Evans: One of the biggest challenges for our customers has been learning how to navigate the complex trade-offs between functions—such as sales, production, and supply chain—in response to shifting consumer expectations and behaviors, especially as it relates to the shelf life of products. To thrive in this environment, CPG firms are adopting two important strategies: one, they are pursuing business and technology transformations to enhance their ability to sense and respond; and two, they are seeking to expand access to near-real-time data and analytics for their supply chains.

One of the keys to successfully implementing these strategies is to adopt and optimize platform-based technologies that CPG firms can use to take advantage of both structured and unstructured data at the consumer level. Examples include sentiment data, connectivity data, sensitivity data, load data, and flow-efficiency data.

AWS: How do you see CPG companies adjusting their current operating environments to changing market dynamics and consumer expectations?

Jason Evans: We see CPG companies responding in several ways. First, they are making sure that they have access to timely and relevant insights—that’s critical. Second, they are ensuring that their strategies are flexible and updated quarterly. And finally, they are making sure that the results of their strategy and implementation programs provide relevant feedback. All of this is pushing CPG companies to place greater emphasis on modernizing their digital and analytics ecosystems across people, process, products, technology, and data.

Supply chain flexibility is a recurring theme among CPG leaders these days. Many are looking beyond traditional retail establishments and embracing direct-to-consumer channels. These new channels often begin by expanding access for consumers and then rapidly lead to new cloud and digital transformation initiatives centered around customer experience, user experience, and sustainability.

AWS: The CPG industry is incredibly resilient. As you look toward the new normal, what role do technology and the cloud play for CPGs? How do you see technology enhancing the way CPGs make, move, or market their products?

Jason Evans: Technology and the cloud play key roles in the new normal by addressing and managing uncertainty in product flow, innovation, and sustainability. We see five technologies emerging as important drivers of the new normal:

1. Connected packaging—to track product movement and consumer behaviors to drive brand loyalty
2. Digital watermarks—to manage product authenticity, sustainability validation, and waste management
3. Dynamic pricing—to better manage perishable products, like rewritable labels
4. Seamless payment experience—using cloud processing to connect omnichannel flows
5. Social purchasing—using technologies for social listening and natural language processing

For CPG firms to adapt and thrive in the new normal, they will need to deliver a more personalized, human-centered customer experience—and this will require deploying a skillful blend of cloud-based technologies. Expertise in data science and applied intelligence will also be needed to create the right data fabric and system integrations needed to deliver relevant insights and support better, faster decision-making. By using data and applied intelligence, CPG firms will be empowered to win in the “me economy.”

AWS: With the current CPG industry disruption, how is your company innovating to respond to changes?

Jason Evans: There is no question that CPG companies are confronting significant changes across every aspect of the industry. We are responding by working with our clients to design and deploy smart innovations that help them address their most pressing business concerns. These innovations are helping CPG companies address key industry imperatives and value drivers including:

• Elevating customer engagement with personalized consumer experiences, anywhere-anytime commerce, omnichannel buying and delivery options, and more
• Enhancing revenue growth with new products, seamless buying experiences across channels, supply chain excellence, and more
• Improving operational and supply chain efficiencies to meet demand for increased delivery speed, always-available inventory, and more
• Modernizing IT and technology landscape by migrating to newer, more efficient technology approaches, deploying smart manufacturing and digital twins, adopting edge computing, Internet of Things, artificial intelligence, and more
• Mitigating risk across the organization by improving data privacy and cybersecurity, mitigating operational risk, strengthening ESG reporting, and more

DXC works with CPG companies to develop sets of action items for each imperative along with associated business outcomes and KPIs. Here are a couple examples:

• Transforming product lifecycles. The objective is to deliver product-centric transformation through engineering, modernization, and industrialization. The business impact is through flexibly and continuously developing, scaling, and innovating products and services that drive increased differentiation, productivity, and growth.
• Closing critical loops. The objective is to facilitate feedback loops that optimize complex trade-offs across sales, production, and supply chain. These innovations help CPG firms succeed by providing more compelling customer experiences and engendering trust and loyalty through personalized perks, transparent sustainability labeling, superior product performance, and transparent security.

AWS: There is much talk about a new normal going forward. What does this new normal look like to you, and how do you think the CPG industry will look 3 years from now?

Jason Evans: The new normal is laced with disruptive events that will continue to have lasting effects on society and business. We believe these disruptions will significantly influence CPG firms over the next 2 to 5 years—a period that will drive:

• Increased modernization of business and factories—CPG companies can realize the benefits of the Fourth Industrial Revolution, with dynamic device connectivity and feedback for performance and flow optimizations.
• Greater usage of internal and external data—CPGs can increase competitiveness with better access to the right insights at the right time.
• Accelerated digital transformation—Next-gen digital and cloud platforms will allow CPGs to become more effective at making complex trade-offs across sales, production, and supply chains.
• Increasing contactless business and services—CPGs will deploy more Web 3.0 solutions with dynamic connectivity of security and more personalized customer interactions, enhancing loyalty and social selling.
• Faster product assortment adjustments—Organizations will deploy more technologies for sensing and responding to ongoing changes in supply and demand.

AWS: What makes you excited for the future of the CPG industry?

Jason Evans: Looking forward, the emergence of two converging trends excites us for the future of CPGs. These include the continued advancement of the Fourth Industrial Revolution, networks of connected devices, and Web 3.0, networks of connected people and brands. Each brings new opportunities to CPG firms by offering new channels for persistent connectivity, interaction, and timely influence.

We’re excited about the next generation of advanced digital and analytics capabilities, which will drive the core business benefits for firms going forward. In fact, digital and analytics transformation offers firms an extraordinary opportunity for accelerating growth and profitability. CPG companies with near-real-time visibility can react to disruptions much more quickly, make fact-based decisions faster, and minimize the negative impact on their supply chains.

Advanced planning transformation will also be on the top of the agenda for CPG firms going forward. These will need to be focused on five priorities: integrated business planning, creating a better demand signal, no-touch order management, automated complete planning, and complete visibility and control. We also see connected packaging platforms generating excitement in the industry. These new packaging solutions can drive three key outcomes for CPG firms: using digital watermark and NFT capabilities; establishing dynamic pricing models; and facilitating capabilities to track goods through value chains, loyalty programs, and movements with the consumer.

It’s an exciting time to be in the CPG industry, and we’re excited to be in the industry with you!

AWS: Thanks for chatting with us, Jason. We appreciate your insights and expertise. 

We hope that you enjoy our blog series. If you have questions for Jason Evans, DXC, or AWS, please leave a comment on this blog. To learn more about DXC, get in touch here.

AWS Partner spotlight

DXC is an IT services company using the power of technology to build better futures for customers, colleagues, environment, and communities. As an AWS Solution Provider and Premier Consulting Partner, DXC’s services cover strategy, design, migration and managed services for cloud, applications, and analytics. AWS offers agility, scale, innovation, cost savings, and performance. DXC helps companies modernize and get the most out of their cloud investments and integrate with existing IT infrastructure.

Data sources:

(eMarketer) https://www.insiderintelligence.com/chart/228374/util retrieved 2022-08-03

(Forbes, Feb 2022) https://www.forbes.com/sites/forbestechcouncil/2022/02/14/web-30-how-to-accelerate-your-brands-growth-in-a-new-reality retrieved 2022-08-03

(McKinsey, Jan 2022) https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/risk-and-resilience-in-consumer-goods-supply-chains retrieved 2022-08-03

(McKinsey, July 2022) https://www.mckinsey.com/business-functions/operations/our-insights/coca-cola-the-people-first-story-of-a-digital-transformation retrieved 2022-08-03

(McKinsey, Nov. 2021) https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumer-goods-companies-must-transform-their-planning-end-to-end retrieved 2022-08-03

(McKinsey, Oct 2021): https://www.mckinsey.com/business-functions/operations/our-insights/the-digital-future-of-manufacturing-consumer-packaged-goods retrieved 2022-08-03

(TheKeenFolks) https://thekeenfolks.com/cpg-marketing-trends-2022/ retrieved 2022-08-03