Digitize to prepare for the future of CPG
Competition is fierce in the consumer packaged goods industry. The consumer packaged goods (CPG) or fast-moving consumer goods landscape encompasses a large variety of non-durable products such as food, tobacco, and pharmaceuticals. Due to the immense assortment and categories of products, retailers big and small are increasingly beginning to penetrate the segment with relative ease.
Ever-changing consumer demands and new emerging players compel companies within the industry to get products out the door as quickly as possible. Due to a low barrier to entry, even small brands are capable of fulfilling niches that large brands are unaware of. When coupled with the unique needs of each region, multinational CPG businesses must simultaneously simplify the product lifecycle while satisfying the demands of consumers.
Vendors must address the distinctive demands of CPG as the segment shifts and transforms and potentially be prepared as new trends and players emerge. CPG will have to undergo its own digital revolution to contend with the inevitable changes the industry will see and machine builders who service CPG companies will have to evolve along with them. It is crucial that these OEMs adopt the solutions-centric approach to enable packagers to monitor product quality and the production process all while accounting for geographic disparities.
From products to solutions
In the vast, fast-moving CPG industry, being able to quickly produce personalized, sometimes region-specific products while adhering to international regulatory standards is key. International enterprises need machines that can get millions to billions of localized products on the shelf in a timely manner. More and more, companies are moving towards machines that guarantee flexibility, speed, and customer support to address differences in requirements and sustainability efforts.
Consequentially, just focusing on providing the machine will not be enough to satisfy these demands. Machine builders must transition from being product-centric providers to solution-centric ones. Simply selling machines to fulfill a one-time instance of potentially fleeting trend is no longer enough. It is imperative that vendors ensure that the solutions they provide will both meet the customers’ needs and support the entire lifecycle of the machine.
Taking the solutions-centric approach will drive machine builders to transform and evolve how they function. It encourages OEMs to continuously improve and be aware of metrics such as: waste reduction, speed enhancement, productivity, and sustainability and regulatory requirements. The solutions-centric approach expedites the transition from a product centric business model to a service centric one, also known as servitization.
Many machine builders have begun moving towards servitization to be able to support the customer throughout their machines’ lifetimes. Servitization eases data collection and communication between the machine builder and customers by aggregating data gathered by machines and flagging the outliers, ultimately giving OEMs access to new revenue streams. Additionally, with the insights gained from servitization, vendors can help their customers become more sustainable.
Solution-focused success
Employing the solutions centric approach after undergoing digitalization will prepare machine builders to meet their CPG customers’ needs in perpetuity. Not only are more brands moving into the CPG space, but players will also have to address geographic disparities brought on by stricter regulations and local preferences. Many enterprises have begun adopting digital solutions; OEMs will need to do the same to provide the solutions these companies need to navigate CPG’s chaotic, complex landscape.
With the solutions-centric approach, machine builders ensure that their customers can receive more than just equipment to tackle their issues and that the solutions evolve along with them. Taking advantage of data, OEMs can each new levels of business performance and unlock new capabilities. To learn how your business can take the first step, listen to our experts weighing in on digitization in CPG.
Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.
