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Luiz Boucas, Global Logistics Director at Kraft Heinz, shares his vision for supply chain efficiency.
Written by Anna McMahon • Produced by Jennifer Davies
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Working out of Kraft Heinz’s global centre of excellence in Amsterdam, Luiz Boucas has been Global Logistics Director at the company for the last four years. 4
his role has changed dramatically, covering a broad range of business areas, as Luiz explains, “I covered many different topics within logistics, ranging from strategic planning and network design, to defining the global management model and logistics structure. Over the last two years, I have been highly focused on the digital
logistics space, where there is value to be aligned. Companies using AI in supply chain and manufacturing operations increased their value significantly, so it has been a big focus for me.” Alongside AI, Luiz and his team are leveraging a number of tools in order to create a more efficient supply chain at Kraft Heinz. Luiz
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says, “The tools are important because they enable us to leapfrog our processes and results. But, if I had to call out what really drives efficiency in supply chain, it is most certainly related to our people and values. Out of the values, there are two highly connected to driving efficiency.
“The advancements done in digital technologies, such as 5G, IoT and quantum computing, will enable supply chains to be truly synchronised” The first is ‘we own it’. The fact that we are accountable for our deliverables and treat the business as our own puts us in a different position when we look at our performance and results. The second is that we ‘dare to do better every day’. This reflects our continuous improvement journey and 6
our constant push towards challenging the status quo. Those values are at the very core of how we operate and are the driving forces behind super-efficiency.” Digital technology came to disrupt Kraft Heinz’s way of doing things, prompting the company to rethink or transform the core business. Luiz adds, “Digital technology will continue to disrupt things in the future. The advancements done in digital technologies, such as 5G, IoT and quantum computing, will enable supply chains to be truly synchronised. They will give us the ability to better understand what is happening across the entire chain, identifying where there is likely to be an impact so corrective actions can be applied. On the other hand, advancements in robotics and automation are also disrupting the way we do things physically.” Luiz makes the distinction between what some of the largest online retailers are doing with autonomous vehicles, drones and robotic warehouses, and more traditional ways of working. He explains, “Human drivers, 7
Seeing the future with the
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The pressure on supply chains today is massive. Consumers are demanding the best product selection at the most competitive prices. They want rapid delivery and the option to customize. At the same time, the world is more volatile than ever. So how do you plan with so much uncertainty?
The good news is that for many businesses, artificial intelligence and machine learning are new approaches that are proving very powerful. By leveraging multiple demand drivers and not only past sales, the new AI/ML forecasting models can much more accurately predict future demand — and also do it at a much more detailed level of granularity. This was certainly a challenge for Kraft Heinz. This leader in food and beverage industry focuses on long-term value creation and world class brands - including Heinz Ketchup. However, internally, greater forecast accuracy could create a series of positive impacts on its supply chain.
native platform—uses artificial intelligence and machine learning to drive better data-driven decisions for businesses. build market knowledge models of Kraft Heinz, consumers, retailers and distributors. These, combined with further demand drivers, from trade promotions to weather data, allowed Kraft Heinz to better predict future customer demand, faster and at a higher level of detail. With this clearer, more precise vision of the future, Kraft Heinz now has a clear competitive market advantage.
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human pickers and human packers increase cost and risk. The differences between traditional businesses and those using digital technologies are immeasurable. They are not playing the same game.” Is the long-term vision for Kraft Heinz’s supply chain therefore to exploit more advanced digital solutions? Luiz answers, “I believe the future will be a place where technology will complement the
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human decision-making process. If you think about Gartner’s analytics maturity model, it takes time to move from the basic stage to the transformational stage. You have to make big steps to evolve. Technology gives us the ability to move through the stages much faster.” However, Luiz does not see human beings being replaced by technology in the short term. He says, “Technology only complements our
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ability to make decisions. It can help us to make better decisions than we otherwise would have done, but we still need the human component to make sure we are not driving any bias within the algorithms and AI engines.” As supply chains are now operating under greater market pressure, having a resilient supply is key. Luiz explains, “You need to be in the right place at the right time to service your customers. If you do not have the right network with the right design, chances are that you will struggle to fulfil your customers’ needs within the expected time. We are always looking for ways to better service our customers,
“If you take people with you on the journey, it will be a much easier road to take. Failure to do so will only lead to a struggle” 12
Confidence in uncertain times with Machine learning forecasting
:o9
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Forecasting is the critical function that predicts future customer demand, and therefore triggers many of the decisions that companies make in the area of supply chain and beyond. With the increased volatility of demand, forecasting has become much more difficult. This comes in addition to the increasing number of products that companies offer — the result of expansion strategies and the attempt to serve more and more market niches.
Another major trend is impacting the consumer products industry — and even other industries as well: The shift towards new, digital channels. E-commerce was never more widely embraced than in 2020. As physical retailers opened and closed their doors in sync with infection rates, consumers increasingly turned into online shoppers looking for competitive pricing and convenient delivery options. This made forecasting using historical data, the way many companies are still forecasting, very unreliable and unable to predict the rapid demand shifts. For many companies still using traditional forecasting methods, the result was missed sales opportunities or worse, poor customer satisfaction, excess inventory, and a greater risk of obsolescence or perished products — a considerable risk in the fast moving consumer goods industry. With all the uncertainty, complexity, and volatility described above, innovative companies are turning to nextgeneration digital platforms such as :o9’s Digital Brain. This integrated, cloud-native platform uses artificial intelligence and machine learning to drive collaborative, data-driven decisions. By bringing together siloed and external market data, the :o9 digital brain allows companies to gain real-time insights, helping them plan better, make better decisions. For more information on how next generation technologies such as machine learning, artificial intelligence, and :o9’s Digital Brain can significantly increase the accuracy of a business’ forecast, download our whitepaper now.
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by constantly revaluating our network and partnering with the best logistics service providers to fulfil that need.” Kraft Heinz prides itself on partnering with companies that are constantly looking for new opportunities. One such company is O9 Solutions. Luiz continues, “O9 Solutions are fundamentally changing the way we look at demand planning. Instead of relying on historical patterns, O9 brings a variety of internal and external drivers to come up with the most probable forecast. With that mentality, you can understand relations and make better forecasts to service your customers.” For Luiz’s supply chain vision to come to fruition, he says it must be viewed as a journey, as opposed to a sprint. He explains, “It can take years to accomplish your vision. Algorithms are 10 per cent, technology is 20 per cent, and change management is 70 per cent of the problem, so the focus should be on the latter when setting out your visual roadmap. Be clear on what you want to achieve in defining your data strategy. Having IT by your side is crucial.
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“embrace uncertaint and enjoy the LEARNIN process. You are not to have all the answ to your questions, so take a stepping stone approach”
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“My last point would be to embrace uncertainty and enjoy the learning process. You are not going to have all the answers to your questions, so take a stepping stone approach. There is no such thing as a static strategy. Things are moving at such a fast pace that you have to constantly revisit it, bringing in new trends and any changes in the industry and pair it to your strategy.” Going back to the subject of change management, Luiz argues that you need to get people on board for any strategy to be successful. He says, “Not everyone knows what digital is, the benefits and value it brings, and what is required from them to make it work. If you take people with you on the journey, it will be a much easier road to take. Failure to do so will only lead to a struggle.” As for the foreseeable future, Luiz tells us he will be focusing on maturing the projects he has in place, as well as fulfilling the commitments he has made for the rest of the year. For further information on Kraft Heinz, visit www.kraftheinzcompany.com 15
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