Kraft Wants to Solve Supply Chain Problems – Within the Metaverse

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 metaverse that allow the company to solve problems virtually. The tactic should help Kraft get its products to grocers faster and ensure factories run as efficiently as possible.

“We are truly committed to supporting our customers in … what we call the industrial metaverse,” said Lorraine Barden, CTO of Microsoft Industry Solutions. “This means Kraft Heinz can get its products … into the hands of consumers faster.”

Even if the real metaverse is a pie-in-the-sky virtual world not yet ready for prime time, “metaverse” has become a catch-all term for all things virtual, including logistics solutions companies such as Kraft Heinz and Microsoft Search.

The deal, which Kraft says is one of the biggest investments in technology, “increases our credibility,” said Carlos Abrams-Rivera, president of Kraft Heinz for North America, adding that it helps make sure we’re there when needed. you are us. .. whatever situation the world goes through. ”

Companies like Kraft saw their supply chains being tested at the start of the pandemic, when restaurants closed and consumers began to panic in supermarkets. In order to keep up with the surge in demand, they have to make a lot of changes, such as prioritizing popular products over niche products and some package sizes over others.

For Kraft-Heinz (KHC) this means, among other things, increasing the production of take-out ketchup packets. “We managed it well,” Abrams-Rivera said.

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

Kraft can predict that demand for ketchup packages will increase as it draws attention to international trends. But if demand suddenly changes in some towns or states because, for example, an increase in Covid cases that keep children home schooling, Kraft can’t respond immediately.

This is bad for customers, who may have encountered empty shelves, and it is not good for Kraft, because those customers may have resorted to a competitor.

New technology should help prevent shortages, Kraft believes.

In the right place at the right time

So how can automation and virtual manufacturing facilities help get products to the shelves?

Abrams-Rivera gives this example: A West Coast retailer decided to offer a Lunchables promotion, increasing demand for the product.

Often, this requires several employees to pull multiple levers. After the retailer places the order, a member of the Kraft team should see the need and alert the warehouses, and so on. But with the help of Microsoft (MSFT)Kraft can automate several steps to speed up the process.

And then there are digital twins. Virtual versions of Kraft’s manufacturing facilities will give the company’s management a better view of how they are operating and what needs to be repaired.

A Kraft plant can make a variety of things, such as ketchup, sauce and vinegar, Abrams-Rivera said. Digital mapping of these facilities will help Kraft better understand design flaws and increase efficiency.

Kraft doesn’t currently have “a system that allows us to map the entire plant to see the best flow,” Abrams-Rivera explains. Digital twins will change that.

The virtual option could also allow Kraft to detect errors in advance by allowing it to simulate production. “Usually you don’t know until you get 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 are back in the metaverse

As the idea of ​​the metaverse gained traction, many companies were looking for ways to connect with consumers.

Kraft, for its part, doesn’t just use technology for behind -the -scenes solutions to logistics challenges. It also announces to players. PepsiCo (DYNAMISM) and Coca-Cola, are also exploring ways to reach customers in new virtual arenas. For PepsiCo, that includes games. and Coca Cola (my) introduces a limited edition “Pixel” with a soda flavor in the Fortnite video game.

“I see the game as really the cornerstone of the new event we call the metaverse,” Adam Harter, senior vice president of media, sports and entertainment at PepsiCo, told CNN Business. “As people live their lives in the metaverse on a more daily basis over the next few years … it’s critical for brands like ours to make sure we’re where consumers are. living their lives. “

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