Kraft wants to solve its supply chain problems – inside Metaverset

Last month, the company announced an agreement with Microsoft to help secure its supply chain by using, among other things, automation to speed up operations and replicate the company’s facilities online.

Kraft has created “digital twins” in the meta-verse that enable the company to solve problems virtually. The tactic is to help Kraft get its products to merchants faster and ensure that the factories run as efficiently as possible.

“We’re really committed to supporting our customers in … what we call the industrial metavers,” said Lorraine Barden, CTO of Microsoft Industry Solutions. “That means Kraft Heinz will be able to get its products … faster into the hands of consumers.”

Although the real metaverse is a virtual world that is not quite ready for prime time, “metaverse” has become a collective term for everything virtual, including the logistics solutions that companies like Kraft Heinz and Microsoft are looking for.

The deal, which Kraft says is one of its biggest technology investments, “increases our reliability,” said Carlos Abrams-Rivera, Kraft Heinz president of North America, adding that it should help ensure we are there whenever any time you need us. .. no matter what situation the world goes through. ”

Companies like Kraft saw their supply chains tested in the early pandemic when restaurants closed and consumers began to panic in supermarkets. To keep pace with the increase in demand, they had to make several rapid changes, such as prioritizing popular products over niche products and certain package sizes over others.

To Kraft-Heinz (KHC) this meant, among other things, increasing the production of take-out ketchup packages. “We handled it pretty well,” Abrams-Rivera said.

But there were other areas where “inventory [was] trapped in the system, ”he said.

Kraft could predict that demand for ketchup packages would increase because it was aware of international trends. But when demand suddenly changed in certain cities or states because, for example, an increase in Covid cases kept school-age children at home, Kraft was unable to respond so quickly.

It’s bad for customers who may have come across empty shelves, and it’s bad for Kraft, because those customers may have turned to a competitor instead.

The new technology must help prevent shortages, Kraft believes.

In the right place at the right time

So how can automation and virtual production facilities help get the products on the shelves?

Abrams-Rivera gave this example: A West Coast retailer decides to offer a promotion on Lunchables, which increases the demand for that product.

Typically, this requires many employees to pull on many handles. After the dealer places the order, a member of the Kraft team must see the demand and warn the department stores and so on. But using Microsoft (MSFT)Power can automate several of these steps to speed up the process.

And then there are the digital twins. Virtual versions of Kraft’s production facilities can give the company’s management a better overview of how they work and what needs to be improved.

A single Kraft plant can make different things, like ketchup, sauces and vinegar, Abrams-Rivera said. Digital mapping of these facilities helps Kraft better understand design flaws and increase efficiency.

Kraft does not currently have “a system that allows us to map the entire plant to see the best flow,” Abrams-Rivera explained. Digital twins will change that.

The virtual option could also allow Kraft to detect errors in advance by letting it simulate production. “Normally you would not know it until you got the product running on the line,” Abrams-Rivera said. Online testing can help speed up the process of bringing a new product to market.

Companies turn to the metaverse

As the idea of ​​metaverse gaining ground, more companies are looking for ways to connect with consumers virtually.

Power, on the other hand, not only uses technology for behind-the-scenes solutions to logistical challenges. It also announces more to players. PepsiCo (DYNAMISM) and Coca-Cola, also explores ways to reach customers in new virtual arenas. For PepsiCo, that includes games. And Coca Cola (COW) introduces a limited edition “Pixel” soda to the Fortnite video game.

“I see gaming as really a springboard to this new phenomenon, which we call the meta-verse,” Adam Harter, senior vice president of media, sports and entertainment at PepsiCo, told CNN Business. “When people live their lives in the metaverse on a more daily basis over the next few years … it’s crucial for brands like ours to make sure we’re where these consumers live their lives.”

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