Mobility in Consumer Products
I D C MA NUF ACT UR I NG I N S I GHT S OP I NI ON The consumer products industry is undergoing significant change, with "empowered" consumers putting pressure on manufacturers and retailers for greater selection and speed. Traditional forms of consumer outreach are quickly being augmented and, in some cases, replaced by these new ways of communicating, reporting, and promoting. Demand is becoming more volatile, requiring consumer products companies to have greater levels of visibility than ever before and the ability to make better decisions more quickly. The deployment of mobility offers the consumer products manufacturer a set of technologies that can help bridge visibility gaps and allow remote employees to be more efficient and effective. While the adoption of mobility tools by the consumer products industry has been and will continue to be driven by the use cases that generate value to the organization, there seems little question that for distributed functions such as sales and supply chain, mobility can be a transformative technology: ? Sales has tended to lead in terms of consumer-grade mobility implementations based on both intracompany and intercompany interactions, whereas the supply chain has led in terms of implementations based on purpose-built, ruggedized tools. ? The integration of mobility into the business has tended to be "evolutionary" rather than "revolutionary"; companies are looking at mobile tools as a way to improve the existing process, but not necessarily as a way to change the process - at least not yet. It is important to make a distinction between the adoption of consumer-grade smartphones and the mobile devices that are designed both for a specific function and to withstand the environment in which they are expected to operate. Indeed, where we have seen companies looking at consumer-grade smartphones as a presumed cost-effective replacement for purpose-built devices, the failure rate is so high as to more than offset any initial purchase price advantages. Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.988.7900 F.508.988.7881 www.idc-mi.com Page 2 #MI235807 ©2012 IDC Manufacturing Insights S I T UA TI ON OVE R VI E W Consumer products manufacturers continue to be affected by both internal choices and external forces, and IDC Manufacturing Insights expects a number of major industry trends to impact both the behavior of these companies and their IT investment priorities over the next few years: 1. The "empowered" consumer uses ubiquitous access to information to make more informed decisions and product purchases. Mobility and social business connectivity are transforming the way that people interact with each other and with consumers, customers, and manufacturers. Traditional forms of outreach are quickly being augmented and, in some cases, replaced by these new ways of communicating, reporting, and promoting. Further, consumers are increasingly intolerant of latency; once they decide to make a purchase, they "want it now." 2. Complex and extended global supply networks are a consequence of globalization and the chase for "low cost" manufacturing. The reality is that many manufacturers now experience significantly longer product lead times than ever before, driving a level of complexity in the supply chain that can prove problematic, particularly if agility and responsiveness are required. 3. Volatile demand is the new norm, with consumers who are less brand loyal and far more selective than ever before - and, frankly, are willing to "leave their wallet at home" if the value they require in a purchase is not apparent. Peer reviews and recommendations are driving brand switching, and private label alternatives are becoming more popular. All these factors conspire to drive forecast accuracy down and demand volatility up, requiring greater supply chain agility if service performance is not to suffer. 4. Growing regulation, particularly in the area of traceability, is certainly worrisome to consumer products manufacturers, many of which prefer to be proactive rather than reactive. Traceability has reinvigorated efforts to improve visibility and supply chain responsiveness, particularly for consumer products companies that market food and beverage products with short shelf lives, and puts an emphasis on reliable and accurate data. 5. Compressed order lead times are putting pressure on manufacturers to be more agile and run the clock speed of their business more quickly. In the past couple of years, many companies have found themselves facing sub-48-hour order lead times, often with poor supporting capabilities
