2023-09-23 07:00:49
Here are five ways FMCG companies can maximize sustainability benefits and forecast and optimize demand using artificial intelligence (AI).
Reducing costs through energy efficiency
Sustainable development practices are beneficial for the environment, but they also provide significant savings. By investing in energy efficiency measures, FMCG companies have a unique opportunity to save money. The International Energy Agency indicates that the implementation of such strategies can enable companies with more than 250 employees to achieve, depending on the nature of their activity, up to 30% savings. One way they can do this is by reducing waste and switching from inefficient energy sources to products like LED lights, which reduce energy consumption while still providing sufficient lighting. In addition, they increase their margins thanks to the savings made.
Artificial intelligence (AI) has also become a viable tool for optimizing inventory levels through demand forecasting, allowing businesses to reduce both their indirect costs and their carbon footprint. This is because overstocking in the supply chain can lead to excess warehouse storage and transportation space, and ultimately energy waste. Reducing excess inventory reduces warehouse storage space and therefore reduces energy costs. The benefits of sustainable development are therefore measured both in monetary gains and in ecological awareness.
Reduced supply chain costs
Adopting sustainable measures, such as reducing waste and sourcing from local suppliers, can improve supply chain efficiency while strengthening a brand’s reputation among environmentally conscious consumers.
AI-powered network design and optimization tools help identify, in a streamlined way, where cost reduction is possible. The implementation of sustainable solutions is favorable from an economic point of view, but it also allows companies to demonstrate their eco-responsible commitment.
Increased sales through sustainable marketing
By promoting the responsible quality of their products and packaging, consumer goods companies can attract consumers for whom eco-responsibility is a priority. With the help of AI-powered demand planning tools, personalization engines and promotion optimization, FMCG companies can identify the most effective markets for their messages to reach their audiences target. Sustainability can be a key differentiator for FMCG brands and, by using it as a marketing strategy, companies can increase sales, gain a competitive advantage and thus increase margins.
Gain efficiency with AI-driven demand forecasting
By using AI-powered demand forecasting strategies, FMCG companies can optimize their production processes while minimizing waste. This valuable tool predicts product demand accurately, and thus allows companies to fine-tune the production level and thus avoid overproduction. This sustainable strategy therefore helps reduce expenses and increase profitability for perishable food and beverage companies.
Smart ordering promise improves customer satisfaction
With Intelligent Order Promising (IOP), FMCG companies can optimize their market position by prioritizing, pledging and distributing their inventory across orders for all channels. sales, including direct-to-consumer sales, in an efficient manner, while reducing sub-optimal inventory levels in the supply chain. By improving occupancy rates and service levels, they can improve their reputation and build customer loyalty.
Sustainability is a critical strategy for the FMCG industry to succeed and increase margins. Using AI-powered tools, including demand forecasting and the promise of smart ordering, to adopt sustainable and efficient practices can result in impressive benefits: reducing costs, increasing turnover and improving brand reputation, as well as disruptive innovation that provides a strong competitive advantage in the long term.
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