A·LOUNGE CONSUMER GOODS/RETAIL & DATA/IT

How are data and AI based applications like ChatGPT changing the consumer goods and retail world?

A·lounge Digital on July 25, 2023

You missed the event?

Watch the video recording with the most important learnings:

j

Event

Digital

25 July, 2023 – 12:00 pm to 13:30 pm

Welcome and introduction of the speakers

Keynotes by Tobias Fausch (CIO BayWa), Matthias Drebes (Sales Director Consumer, Celonis), Oliver Miessner (CIO / CTO, Getränke Hoffmann)

Discussion and questions from the audience

l

Subject

With the advent of ChatGPT, artificial intelligence has taken the stage of many companies. Consumer goods and retail companies are facing the exciting challenge: How can processes be made more efficient? What innovative business models can be developed with the help of data and AI?

We would like to give you an insight into concrete “use cases” in which AI and data-driven applications are already being successfully applied.

k

AI in Consumer Goods

Leading companies through challenging times requires storm-proof professionals with power and instinct.

We support you with challenges in the area of consumer goods and retail as well as IT and data:

Solution Group consumer goods and retail

Atreus Kompetenz Digital und IT

.

Atreus A·lounge Digital

THE WORLD OF CONSUMER GOODS AND RETAIL IN TRANSITION THROUGH DATA & AI

With ChatGPT, artificial intelligence has arrived in the public consciousness – and is already changing companies and entire industries. Consumer goods and retail companies are facing exciting challenges: How can they make processes more efficient? What innovative business models can be developed with the help of data and AI?

In the event, hosted by Atreus Directors Michael Lichtinger and Franz Kubillum, experts from leading companies provided insights into concrete use cases for which AI and data-based applications are already being used successfully today.

A summary in 7 theses:

n

1. Artificial intelligence is much more than a useful chatbot

“ChatGPT has already reached 100 million users in the first two months,” says Atreus Director Michael Lichtinger. For the consumer goods and retail industry alone, the management consultancy McKinsey calculates an added value of up to 610 billion euros per year through generative AI. It is therefore “important to engage with the technology at an early stage and thus secure competitive advantages”, says Atreus Director Franz Kubillum. Generative AI is still mainly used in content creation and marketing, but the number of AI applications in business is already unmanageably large. Increasingly, ChatGPT functions as a language layer that enables the interaction of a user with an artificial intelligence, explains Matthias Drebes, Sales Director Consumer at the Munich-based software company Celonis.

o

2. Robots, drones and satellites supplemented by sensors: Prerequisite for AI use in agriculture

Tobias Fausch is CIO at Munich-based energy and agricultural group BayWa AG, which celebrates its 100th anniversary this year. BayWa uses artificial intelligence to achieve sustainability goals in agriculture, relying on robots, drones and satellites equipped with sensors to optimise the cultivation of fields in many ways. Robots are used to check plant health in a field, for example, or to weed or fertilise, but they are not suitable for every terrain. Drones are more flexible and provide real-time data at all times, but are dependent on wind and weather and are relatively expensive. Satellites can be used to monitor and predict plant growth, measure soil quality, make fertiliser recommendations or predict crop yields.

n

3. In agriculture, AI ensures sustainability and profitability at the same time

Fausch points to the many possible applications of AI in agriculture. “Using satellite images, it is possible, for example, to simulate for the whole of Europe how plants will develop on farmland or how fertiliser needs to be applied.” Using a highly efficient algorithm, BayWa has succeeded in removing clouds from satellite images of farmland by extrapolation: “In the process, the AI replaces the cloud with an estimate of how the plants have developed.” AI can also be used to calculate the optimal fertilisation of farmland or the establishment of insect or bee pastures to promote biodiversity. In this way, land management measures can be increasingly planned in advance. “Sustainability and economic efficiency are fortunately aiming in the same direction in agriculture,” says Fausch: “One saves costs, increases turnover and reduces the environmental impact at the same time.”

o

4. Business processes are like drummers – they are not in the foreground, but they determine the overall success

Celonis was founded in 2011 and supports companies from all industries in optimising their supply chains, customer or financial processes with the help of process mining. As Celonis Sales Director Matthias Drebes explains, processes in companies can be compared well with the drummers of well-known bands: they run in the background, but are very complex and have a great influence on the final result. Celonis links the crucial company data of its customers with each other in real time and thus makes it available to the employees. “In the second step, we use process intelligence to reconstruct processes, identify problem symptoms and prioritise them in terms of possible digitisation and automation.” When it comes to improving processes, there is often resistance among employees, Drebes knows: “It is often difficult to convince employees of a necessary change. With numbers, data and facts, it’s much easier to have a factual discussion and take the right steps.”

5. PROCESS MINING WITH AI: NOT ONLY FINDING PROBLEMS, BUT ALSO SOLVING THEM (AUTOMATICALLY)

“Behind the start of a process mining project there are usually either strategic goals or major pain points as the starting point for the desire for change,” says Drebes. From the strategic goals (e.g.: improving order management) – KPIs can be derived (e.g.: perfect order rate), which can be broken down to the level of the individual process to identify and solve process problems. IKEA’s parent company INGKA, for example, uses Celonis to optimise its order management process. A country comparison revealed that the pick-up rate for store collection in the UK was significantly lower than elsewhere. Together with the process mining experts from Celonis, the company found the cause: In the UK, significantly more generous time windows were granted for pick-up, which in turn suggested a certain lack of commitment to the customers. As a result, many did not ultimately pick up their order. When INGKA shortened the time windows based on the analysis, the cancellation rate dropped by 43 per cent within a very short time.m 43 Prozent.

u

6. Data quality is the mandatory prerequisite for the successful use of AI

Oliver Mießner is CIO/CTO at the beverage specialist chain Getränke Hoffmann Group, which has been active in the market for more than 55 years. Mießner is driving the evolution of IT into a business driver there: “I want to transform Getränke Hoffmann into a data-driven company.” To this end, numerous projects are underway in the group of companies. Among other things, Mießner has established a Smart Data Platform that draws its data not from the ERP system but from the tills. “Because that’s where the truth lies – and in real time,” he says. Mießner and his team have also connected a master data system to the platform: “I can’t stress enough how important quality-assured master data is.” As Celonis managing director Drebes says, process mining can be used to identify relatively quickly where issues with the master data lie. Celonis works with large consulting firms in the areas of compliance and audit, for example. BayWa CIO Fausch also says: “Data exchange is the key.”

k

7. AI must not be misunderstood as hype

“ChatGPT is of course a hype term,” says BayWa CIO Fausch. “We all still have to learn how and where we can use AI sensibly and tailor it to our own use cases.” Oliver Mießner also warns against one-size-fits-all fantasies: “Companies should ask themselves: Is this really a use case for AI or is there a simpler variant?” Because there is still a lot of uncertainty. Many Atreus customers are currently wondering how they should use AI so as not to miss the boat. “Sometimes it’s not as complex as you think,” says Atreus Director Franz Kubillum, “it doesn’t always have to be AI that completely replaces you.” Michael Lichtinger also recommends that companies start quickly now and, if in doubt, try out AI in small teams or projects first.

Our Keynote Speaker

Tobias Fausch has been working for the BayWa AG since 2017, in the role of CIO since 2019 and also as Managing Director of FarmFacts GmbH since 2021. In addition to the classic CIO tasks, digitalization in agriculture with satellite data-based plant growth and water models is a focus.

Prior to that, he spent 18 years at BSH in various management positions in IT, controlling, organization and processes, and internal audit, including two years in Singapore for the Asia Pacific region. Mr. Fausch studied physics at Johannes Gutenberg University and graduated from Ludwig Maximilians University in 1991.

With his team, he serves the fast-growing market for process mining and execution management for the largest retailers, logistics providers, transport and consumer goods manufacturers in Germany and Austria.

After graduating from high school, Matthias studied Retail Management at the Duale Hochschule Mannheim and worked in Purchasing/Category Management at MediaMarktSaturn in Ingolstadt. Afterwards, he changed sides of the negotiating table from purchasing to sales and came to Celonis as one of the first hundred employees in Munich via stations at IBM in Dublin, and AppDynamics in London.

Oliver Mießner is CIO/CTO and a member of the management team at Germany’s leading specialty beverage retailer, the Getränke Hoffmann Group. In this role, he is responsible for the comprehensive realignment of information technology.

Oliver Mießner and his team focus on the digital and data-driven orientation of the Getränke Hoffmann Group as an integral part of its IT strategy. Over a period of 20 years, he has held various management positions and successfully supported well-known German companies in the development and implementation of future-oriented data strategies