The world’s largest food and beverage company is growing its coffee business, and not just through its recent $7.15 billion licensing deal with Starbucks. Nestlé is also brewing up digital initiatives to transform its entire business from bean to cup, starting with sourcing and warehousing, right up to point of sales.
Digital transformation is in full swing in many areas of life and Gartner analysts expect to see 20 billion Internet-connected things by 2020. That’s almost three times the current worldwide population of 7.6 billion, to highlight the density of such devices.
No surprise that the F&B giant is using connected things, or the Internet of Things (IoT), to increase operational efficiency, create better experiences and deliver personalized marketing, revealed Arti Buxi, Global Implementation Leader, Connected Solutions, Nestlé. Buxi was speaking at a conference on “The Future of Digital Transformation” organized by Women in Digital in Geneva, Switzerland.
What’s a connected thing? Take a bulb that gives light. Wire it with mobile and video devices. Now it takes on a surveillance or caregiving function, perhaps monitoring patients in a hospital.
In another application, Bigbelly outfitted its trash bins with sensors to guide pickup routes ad predict waste levels. Instead of running its fixed routes, this differentiated approach, backed with connected devices, enabled Bigbelly to reduce its trash collection efforts by 80% and to provide essential services at a lower cost.
Digital transformation for Nestlé means moving from coffee producer to total solutions provider. Nestlé is making its coffee machines smarter and using connected services to drive business, as Buxi showed in her talk.
Smart coffee machines can tell you lots of things: if they are dispensing or not and what, any errors, location. An informed business is a better business. Smart machines can feed back detailed breakdowns of sales: cups sold, machine output, beverage type (cappuccino or latte macchiato), sales by day of the week.
Connected services, and the data they collect, are unlocking valuable insights to drive sales. They can also maximize the effectiveness of promotions. In short, connected services are transforming Nestlé’s business: by increasing operational efficiency, driving cup volume and value, and providing better customer experiences.
Digital transformation is never plain sailing. As Gartner noted, 75% of IoT projects take up to twice as long as planned.
Having to deal with diverse vendors, Buxi confirmed that there are no drag-and-drop, plug-and-play solutions. Integrations and customizations are often complex and resource-intensive.
Her advice for businesses eyeing IoT and connected services as part of their digital transformation strategy:
Get your business objectives right.
Create buy-in throughout the company.
Have the right tools and continually train and educate the hands that will use them.