Technology has never failed to surprise us – not when first computers simplified complex computing many folds, not when World Wide Web fever caught the world and shrunk the distances, and not even now when every possible device around is likely to be connected in next few years. Gartner, a leading technology analyst firm, has already predicted 25 billion devices to be connected by end of this decade, and this will double by 2050. Research work from a leading service provider in India indicates that companies who have already started taking advantage of Internet of Things (IoT) have witnessed an average increase of 16 percent in revenues last few years.
Consumer packaged goods (CPG) companies are drawing benefits of this revolutionary technology to not just improve their profits but also bring down costs, increase efficiencies, and reduce theft and waste. One such revolution case is clearly seen in the beverage industry – both alcoholic and non-alcoholic. Consider this, as per statistica.com, world over beverage companies sell up to 15 percent of their volumes through breweries/dispensing machines which constitutes a large chunk of this industry that totals than $1 trillion annually. Traditionally, as per Quora.com, they had been grappling with following fundamental challenges:
- Waste/Theft – approximately $7 billion of beverage is wasted through over-pouring, after-hours consumptions, and sanitation waste. Visi-coolers theft and impurity is another big concern, which accounts for 10 to 15 percent of the loss.
- Suboptimal stock – Out of stock instances lead to a loss of approximately $2 billion in sales.
- Happy hours not so happy – Lack of real-time visibility to brand-wise sales lead to sub-optimal return on promotional events/happy-hours, and inefficient promotions cost companies approximately $2 billion.
- Dissatisfied customers – Beverage not served at optimal temperature or through uncleansed dispenser leads to 20 percent of customers who are not satisfied.
IoT has now come to the rescue and here’s how. A sensory tag that connects directly to the dispenser provides accurate sell-out volume, quality metrics like temperature of the drink served or bottles in the visi-cooler, out of stock alerts, and more. Some of the ways big data analytics executed on these IoT solutions help beverage companies transform their businesses include:
- Waste/theft management: Real time monitoring of what flows out of dispensers and how much can shrink waste by up to 50 percent and increase profit margins.
- Supply chain analytics: By combining point-of-sale (POS) data with draught consumption, order management is much more effective, and automation can help prevent out-of-stock occurrences by 60 percent.
- Promotion analytics: Best promotion ideas are identified using the real-time consumption patterns during happy hours or otherwise to push sales and grow business by over 30 percent.
- Quality analytics: Automatically tracking the beer line cleaning activities and temperature of drinks served helps companies improve beer quality score by 20 percent. Tracking the temperature for visi-cooler, especially in tropical countries, also help beverage companies monitor the quality of their bottles for immediate consumption.
While the technology itself is evolving, and use of same is changing even at a faster pace, a lot needs to be explored continually. IoT’s full potential is still getting unlocked at every time stamp. Yet it is clear that the great efficiencies and better performance achieved by connecting machines, processes, and operations through new digital solutions and smart analytic tools, means IoT has the potential to have immense impact and fuel the next evolution of technology.