Demand Side Management (CPG)

Demand Side Management is a term applied to front office enterprise applications devised specifially for the Consumer Products industry.

The cornerstone categories that made the Consumer Products industry great are suffering due to socio-economic, demographic and dietary change. Snackfoods, beer, confectionery, ready meals, tobacco and biscuits are all categories rapidly having to reinvent themselves.

Consequently, manufacturers are looking to deliver greater insight into what drives demand and creates increased off-take. Unfortunately, previous attempts have failed for one or more reasons:
Solutions were not tightly integrated, so any insight was gained in isolation, and learnings could not be harnessed to ‘make it work better next time’

Evaluation was historic – real-time data simply wasn’t available at a reasonable cost.

The solutions used for the task were not built for our industry. Heavy customization of generic offerings was needed and was always a compromise.

Many solution vendors understood the problems of the Consumer Products industry but could not deliver the solution. They were either too heavily committed to a generic offering or a point solution that created a silo of information.

In the evolution of the brand, many tools have been used to help Consumer Products manufacturers gain and sustain competitive advantage. Effective or not, the bottom line has always been that there are just two types of lever which a Consumer Products manufacturer can influence to maximize profitability: cost drivers and demand drivers.

The advent of ERP and SCM systems provided great opportunity for manufacturers to become more efficient in the management of their cost drivers. For critical areas such as transportation optimization, billing management and replenishment, these vehicles often provided excellent opportunity to slash costs and maximize efficiencies.

But simply focusing on these largely hygienic cost drivers addresses only a portion of the issues faced by our industry – it does not provide competitive advantage. It’s well known that there are three opportunities to increase revenue: make it for less, sell it for more or sell more of it. The last two of these are governed by demand drivers.