From Disruption To Opportunity: Consumer Products In The New Digital Economy

Mark Osborn

Whether it’s a contentious worker strike, an unexpected regulatory change, or a severe weather event, consumer products (CP) companies can be dramatically impacted by any number of natural or man-made events (otherwise known as “moments of market disruption”). A glance at DHL’s top 10 supply chain disruptions for 2015 shows just how varied these events can be in a single year – from port explosions and canal congestion to hurricanes and extreme winter weather.

Regardless of the event type, the unpredictable nature of these disruptions can make them extremely challenging to plan for. So when market disruptions do occur, CP companies must be able to discover, monitor, and plan for contingencies around them – especially at their outset. But the capricious quality of many disruptions makes it harder to generate an immediate and effective response. In many cases this results in supply disruptions, unexpected spikes or significant drops in demand, or other effects that impact both the top and the bottom line.

All this is changing in the digital economy. Now, CP companies can spot and track events as they happen. Companies have access to billions of real-time data points from around the world, from Facebook posts and tweets to news articles and weather updates. Aided by digitally enabled flexible operations and frictionless supplier networks, companies can quickly act on real-time information to mitigate risk and help ensure a fast, profitable response. In this way disruption becomes an opportunity to improve consumer perception, create new consumer engagements, and build brand equity.

A supply-chain early warning system

Forward-thinking companies are already finding ways to capture the vast amount of online content that’s being generated around the world every second and distill it into operationally relevant information.

One example is Czech-based Semantic Vision. The company developed VEGA, one of the largest news databases and most powerful semantic news engines in the world. The system analyzes 90 percent of the world’s news content in the world’s top 10 languages and synthesizes it into meaningful information for their clients in CP and other industries.

CP companies can use this information to track operations and assets worldwide, achieving far greater visibility into potential disruptions and threat levels than they would get from traditional news or social-media monitoring. This allows them to address crucial questions around a given threat, such as:

  • How serious is it and how much more serious could it get?
  • What are the implications for our business operations?
  • How do we shift to either capitalize on or mitigate the risk?
  • How can we be the first to reach or help consumers?

Acting on moments and making a difference

Some CP companies are already demonstrating the benefits of quickly responding to market disruptions in a positive way.

Tide’s Loads of Hope program is one example. The program, created in 2005 following Hurricane Katrina, uses a mobile laundromat to provide free laundry services to communities stricken by severe weather and natural disasters.

The program delivers more than clean clothes. It provides a sense of hope and normalcy for people who have been forced from their homes and are often left without basic needs and resources after a disaster. To date, Loads of Hope has helped nearly 45,000 families across several states, while at the same time generating significant brand equity for Tide.

Apple offers another example. When Japan was struck by a massive earthquake in 2011, Apple turned its stores into emergency shelters, allowing employees and their families to sleep in the stores. And it extended store hours so consumers would have access to wi-fi connectivity while learning from store employees about how to use devices to read the latest news or connect with loved ones.

Disruptions become opportunities

In today’s global economy, what may begin as seemingly local events affecting only a small population in one corner of the world can evolve quickly into major moments of market disruption. The ability to spot, assess and monitor these moments in real-time and respond quickly – for example, by adjusting prices, redeploying supplies, or reallocating manufacturing capacity – can help CP companies mitigate risks or even turn risks into opportunities, while also creating competitive differentiation.

To learn more about how you can be better prepared for moments of market disruption, visit Consumer products: Reimagined for the new economy.

About Mark Osborn

Mark Osborn is Vice President of Digital Strategy and Business Planning for Consumer Products at SAP. He focuses on strategy and thought leadership development, strategic growth initiatives, and operations and go-to-market planning. Prior to his current role, Mark was the global lead for the Consumer Products industry marketing for SAP. He holds a BA from Washington University in St. Louis, Missouri, and an MBA from the University of Minnesota, Carlson School of Management.