Rahul Shinde, CIO and Director Digital Transformation, Duy Tan Plastics Corporation
What is your opinion on digital transformation? How is the entire industry changing?
Today, technological innovations and the hyper connected world have significantly influenced consumer behavior and expectations. 60 percent of Vietnam's population is active internet users and 30 percent of them are millennial and they expect more informed about companies, their products, and businesses.
This, in turn, necessitates businesses - especially like ours in consumer goods sector to adapt and change from traditional "transaction-driven" business model to more "as a service" business model which is "technology-driven & data driven".
As plastics industry has relatively low entry barrier, the large and well-established company like ours is facing headwinds from both global players with superior products and large budgets as well as local smaller players who offer products at much lower prices.
Hence, there are clear value drivers for digital transformation – Ability to produce and sell goods better tailored to customer demand through actionable data and insights, increasing agility (enhance time to market), improved efficiencies and at the same time bring down costs. Consumer goods sector has started leveraging digital through, e-commerce, e-stores, and mobile for accelerating sales and marketing as well as revolutionizing in store execution in traditional General and Modern Trade channels through Sales force automation, digital merchandising, smart shelves and smart kiosks, trade promotions management tools, digital signage so on so forth. Bigger companies are taking a step further to mesh distributor and retailers ecosystem into overall digital strategy and collaborating to gain valuable insights about customers. Analytics is driving pricing decisions, predict promotion performance and demand forecasting. On a supply chain side, few Vietnamese companies have started taking baby steps for their journey to Industry 4.0, they are accelerating digital supply chain initiatives to optimize, modernize and automate their warehousing, production and logistics operations.
What are the new technologies coming up in this industry?
The plastics industry, being a traditional manufacturing industry, has been slow to adopt digital, however, the leading companies are fast adopting digital supply chain practices to improve efficiency and time to market. Demand sensing technologies are improving the demand forecasting accuracies, especially during the busy lunar new year demand peaks. Then is a key role that IOT is playing in tracking valuable assets such as molds, measure machine OEE, logistics, and fuel cost savings through telematics, predictive maintenance. Increasingly manufacturers are using robotics in injection molding to improve efficiency and reduce quality defects.
Machine learning, digital twins, PLM, AI, and 3D printing are reducing the product development lifecycle to a great extent.
Adoption of CRM, Salesforce automation and Distributor management systems, strategic sourcing tools and self-service BI tools, has helped facilitate more effective collaboration up- and downstream with retailers, distributors, and suppliers.
With connected partner ecosystems on the ERP digital core, armed with in-memory analytics will improve sales feedback and ability to forecast demand better thereby improving efficiency.
Gamification, augmented reality and social commerce through mobile are reshaping buying behavior through better engagement, education, and loyalty to differentiate products in a crowded plastic wares market.
How has digitization affected Gamification and the technology behind it?
Gamification, in recent years, has gained new relevance in non-gaming corporate context as an effective digital tool in customer and employee engagement, e-learning and driving performance. We used gamification extensively in E-learning but we are also raising the bar by experimenting with gamification to drive customer/retailer loyalty programs on a mobile app to reward badges and offer promotions for mom and pop stores. Gamification platform to drive online promotions, cross-selling, and communicating new product launches are helping to deliver better ROI on trade spends. It's a great tool to drive performance and motivate salesmen through gamified sales warrior campaigns and training the field forces.
Augmented reality mobile apps such as gamified treasure hunts have already been successful use cases for branding and will be an integral part of online marketing strategies for CPG companies.
In future, Gamification integrated with telematics and wearables will transform the product design and maintenance operations. Gamification is an ideal platform be to generate ideas and foster innovation making work more fun.
As Gartner put it, 50 percent of corporate innovations will be gamified.
We will see more and more of cross-industry collaboration on customer insights using gamification as a platform. We are already seeing some example of how Fitbit generated data is helping insurance companies to calculate premiums of people based on their overall health. Gamification will become "as-a-service" offering from cloud providers, just like machine learning in recent future.
What challenges does the industry face when adopting new technologies?
Even though many technology options available and they all seem viable, technology itself doesn't solve the business problems. Changing the organizational culture, that is avert to risk-taking to the digital friendly culture which is willing to experiment, innovate, and challenge the status quo, requires sponsorship from the top and collaboration across functions. We need to prioritize and chose technologies wisely for solving most important business problems, often times ignoring the marketing tactics and noise from the providers.
In developing markets like ours, companies moving to the cloud are facing reliability and availability challenges due to infrequent internet access and non-availability of data centers of reputed cloud providers in Vietnam. Hence, one needs to work within those constraints while moving applications to the cloud. Also, with connected machines, external customer insights, and IoT generating a huge amount of data, companies have to tackle challenge related to storage. While IAAS (infrastructure as a service) costs are going down, the storage costs are going up, offsetting the savings generated by moving to the cloud. With a lot of sensitive organization data being exposed to the internet, data privacy and security is another challenge for digital ecosystem. And lastly, availability of new age digital skills in areas such as data analytics, IOT, cloud etc, especially in developing markets. We have to spend considerable effort and budget in reskilling existing employees with these new skills.