Make The Most Of The Fourth Industrial Revolution

Dane Poeske

Disruption? The consumer packaged goods industry is in total disarray. No other industry has been as severely affected by digital transformation. But some companies are thriving, taking market share, and growing sales because they are embracing the fourth industrial revolution.

The first industrial revolution used water and steam to mechanize production, the second revolution used electric energy to create mass production. The third revolution used electronics and information technology to automate production. The latest industrial revolution is the fourth major era since the initial industrial revolution of the 18th century. It’s characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. Here’s how the fourth revolution started – and how you can use it to your advantage.

Houston, we have a problem

Since the year 2000, more than 50 percent of the Fortune 500 have disappeared – and this was before the impact of digital technologies had truly taken hold. During that period there have been a series of breakthroughs in digital technologies. Media giants like Facebook were born. Transportation companies such as Uber came into being. And we all began to re-think the future of our CPG industry.

In addition to the macro forces that impact our industry today (demographic and regulatory shifts, security risks), CPG leaders are challenged by competitive forces such as globalization, e-commerce, the sharing economy, and a relentless focus on cost. But when it comes to the technological forces at work in our world (the explosion of data, the impact of cloud, and flexible service delivery), leaders can take heart: For those that choose to survive, the fourth industrial revolution represents change that is fundamental for CPG.

This revolution is all about data and partnerships

New technologies are emerging that can serve you well in our disrupted landscape. Examine how you’re managing data, AI, blockchain, and the IoT. Ask your team what type of new data sets are being tested and which of your organization’s pain points can be solved with AI. Ask your colleagues where the IoT can lower operational costs through predictive maintenance. Find out where you can reinvent business processes with blockchain technologies.

Examine your evolving partner networks, too. It’s worth asking what type of non-traditional partnerships will help you create new value for your consumers. Make it a point to identify which specific cross-industry partnerships could help you create new consumer experiences; some will be stronger than others. Consider these potential partners as part of your “innovation ecosystem.” Know in advance the benefits you expect from participating in the new collaboration and partner networks that you’ve identified.

Want new growth opportunities? Look to new sources of data

Sure, your organization holds plenty of data already. But does it represent the next generation of consumers? Is it creating new insights and innovation? Does this enterprise data create a competitive advantage or is it just a legacy cost of doing business? New sources of data – and the ability to use this data’s power – could well determine whether you stay competitive in the marketplace. A next-generation ERP platform gives you a digital core that helps create the real-time, matrixed knowledge that your company needs to succeed. Just investigating the new sources of opportunity will help your colleagues to shake off any “legacy thinking.”

New infrastructure such as data lakes hold true potential in the fourth industrial revolution, as do artificial intelligence technologies. How else will you manage the data produced by social media, by third parties, by the IoT, by point of sale, and weather?

Fresh data, coupled with cognitive capabilities, delivers real value

I’ve seen some remarkable success stories within CPG when leaders embrace the fourth industrial revolution. For example, one client used data-driven methodology to determine the correct product assortment on a store-by-store basis; the result was a three percent increase in existing sales. Dramatic results also accrue when data is employed to determine site selection; I’ve seen a three percent improvement in margins when the client used the right data for demand, store traffic, venues, and competition. The weather impacts everything we do on a local level, and that data is now being incorporated into demand forecasting to improve results.

So take the plunge. Examine your role in the fourth industrial revolution. The future of your company could depend upon it.

To take advantage of all the benefits described in this post, request your complimentary SAP HANA Impact assessment today. IBM will also be at SAPPHIRE NOW and ASUG Annual SAP Conference this June 5–7 in Orlando. Visit IBM at booth #612 and talk to IBM-SAP experts, and check out our event Web site to see what we’re doing at the event.

Also, visit our website to learn more about how IBM can help accelerate your SAP S/4HANA migration.


Dane Poeske

About Dane Poeske

Dane Poeske, IBM global industry leader, works with Consumer Products Goods, Distribution, Agriculture, Fashion and Retail clients around the world. Poeske’s focus is on developing client solutions that include advanced analytics, AI, Blockchain, IoT, mobile and cloud technologies. You can reach him at dapoeske@us.ibm.com.