Produced by Tiger Sniff Think Tank
Authors|Yang Jun, Yu Xiangnan
Editor|Yu Xiangnan, Ji Yujie
Header picture丨Visual China
The millennium-old liquor industry is in a cooling-off period.
According to the analysis of the China Liquor Industry Association, the liquor industry has obvious problems of overcapacity and imbalance between supply and demand, and is still in the destocking cycle. In the face of many confusions and uncertainties, the wine industry is currently ushering in a wave of digital transformation of channels.
More and more wine companies are aware of the importance of flattening, refinement and compound development of channels, so as to deepen the channel layout, accelerate the process of digital transformation of channels, and directly reach consumer terminals.
There is a typical enterprise in the liquor industry - Xiao Muduxian, which has revealed to the industry that it will achieve the goal of 10 billion yuan by 2027, has already rooted digitalization in the enterprise for 7 years, and has maintained performance growth in recent years, and compared with the beginning, the performance has increased more than five times.
What did the little foolish fairy do with digitalization? Is this the secret to its growth? With these questions, Tiger Sniff Think Tank had an in-depth dialogue with Yu Chenghui, CIO of Little Fool Fairy, and Mr. Yu Chenghui shared with us the experience of Little Fool Fairy's digital construction and talked about some thoughts on the current liquor industry.
1. Integrate best practices with the current situation of the enterprise, and strive to be "half a step ahead of the business"
Tiger Sniff Think Tank: Please summarize the core achievements and key nodes of Xiaomutuxian's digital construction in the past seven years.
Yu Chenghui: The digital construction of Xiaomutuxian began in September 2017, and the landmark action is to establish a digital center and start the digital transformation of enterprises in an all-round way.
From the perspective of business segments, it is divided into four parts: supply chain, functional governance, marketing and consumer, each part has its own construction plan and rhythm, and adjusts the digital transformation strategy and annual OGSM according to the urgency of the current problems faced by the enterprise.
After several years of development, the digital center is leading the standardization and growth of the overall business, and the company's revenue has increased by more than five times. In the whole enterprise, the collaboration between digitalization and business units is very close, the breadth of business architecture is based on the industry best practices introduced by digitalization, and the depth of business is mainly based on the co-creation of business departments and digitalization.
From 2018 to 2019, our initial goal was to solve the control of marketing market expenses, and we continued to launch orders, DMS, SFA, TPM and other systems to solve the problem of market cost control. In addition, in the consumer sector, the introduction of mini programs to do the extension of red envelope bottle opening, and gradually realize flexible marketing activities such as one policy for one place, one policy for one activity, one policy for one box, and bC linkage.
In the field of finance, the entire ERP system was replaced, and the ERP was cut into two sections according to the business carrying capacity of the enterprise at that time, the first section was the finance + marketing part, and the second section was the supply chain part. After opening up the core system of the supply chain in 2019, the detailed coverage of business areas was expanded, such as WMS, SRM, bidding, APS and other systems. As a whole, ERP is taken as the core, and professional systems are introduced in the professional field to carry out all-round integration and professional coverage of the breadth and depth of business.
Between 2021 and 2022, we deepened our digitalization in the consumer sector. However, it is a pity that due to the limitations of the internal organization and division of labor, the in-depth application of this strategy in the consumer field is still insufficient. Although the "1+N" architecture system has been built, it still needs to be promoted in close collaboration with business departments.
In terms of overall digital construction, in the past seven years, Xiaomutuxian has extensively absorbed the best practices of various industries, streamlined and adapted according to corporate strategies and actual needs, and ensured that digital applications are implemented in an orderly and effective manner within the company, and there are many highlights that can be used for reference in the liquor industry and even the consumer goods industry.
In general, we adopt a top-down planning strategy, integrate the best practices with the current situation of the enterprise, and integrate the construction strategy of horizontal breadth and vertical depth, and strive to achieve the traction advantage of "half a step ahead of the business", ensure the smooth transition and effective implementation of the change, and avoid the pressure of employees to digest the new management concept.
All along, Xiaomutuxian has continued to promote digital construction, leading the business to achieve continuous upgrading in the four major areas of supply chain, functional management, marketing and consumer experience.
Tiger Sniff Think Tank: How does Little Fool's digital strategy support the growth goals of the company's business?
Yu Chenghui: Our performance has increased many times compared with the beginning, and the support of digitalization is mainly in the standardization and process of internal governance of the enterprise, the reform of the operation mode of market expenses, and the enjoyment of the dividend of brand return. Especially after three years of the epidemic, many liquor companies have experienced a decline in sales, and our products in the channel are still at the same price and are increasing in price. However, when it grows to the scale in 2023, we feel that the next development stage can no longer be driven by the refined management of channels, and we must be consumer-centric, carry out consumer cultivation, service, and transformation actions in an all-round way, and realize the marketing transformation from "channel price competition" to "consumer value creation".
Based on this concept, Xiaomutuxian's digital strategy is also more focused on channel management and consumer cultivation this year. Through digital technical means of collaborative marketing to improve the intrinsic quality of its marketing plan, the cost of delivery is more accurate and real, and the market will react, for example, our banquet version 3.0 uses information such as GPS + number of bottles + terminal location to automatically judge whether the banquet is real. At the same time, for the new brand matrix and new sales matrix in the VUCA era, digitalization needs to introduce some new business models, business scenarios, and innovative ways to assist marketing growth.
Tiger Sniff Think Tank: We learned that Xiaomutuxian has greatly enhanced its market influence by innovating marketing models and deepening channel layout. Can you share some examples of how marketing and big data are combined?
Yu Chenghui: The liquor industry is basically a distributor.
In general, the current channel strategy of Xiaomutuxian is mainly based on dealers directly to the terminal, supplemented by the distribution model of local regions, and channel management through the price system + refined channel cost operation. In the core market, we work with the dealer team to carry out the integration of manufacturers, from the perspective of sales practice, not only to ensure that the products are delivered to the terminal efficiently, but also to help the terminal to do consumer sales, which improves the efficiency and effectiveness of the implementation of marketing policies and promotes sales growth.
Of course, it will also be adjusted according to different areas. For specific regions such as Lanzhou, in view of its vast territory and complex market characteristics, we focus more on evaluating and relying on the dealers' own capabilities and resources to develop the market in depth. These areas are still in the start-up stage of the market, so the focus is on recruiting the best business and supporting them to invest in management at a reasonable cost.
Since 2019, our business operation model has always adhered to the principle of online closed-loop control, and has built a closed-loop and efficient management system from budget formulation, plan application, plan implementation, indicator monitoring, plan write-off to the final formation of expense pools. This process ensures that every link can be effectively implemented and supervised, and compared with most consumer goods companies that focus on a single point, the management model we adopt has its historical precipitation and landing advantages.
During the implementation of SFA, we adopted a comprehensive coverage strategy and built a complete business architecture from the early stages of the project. At the beginning, in order to adapt to the business stage at that time, we designed 4 dedicated solutions and 1 general solution using the MVP method, which greatly simplified the write-off process by digitizing the execution process. With the expansion of business, we have turned a number of marketing expenses into projects, and the number of programs has increased to thirty or forty, ensuring that as long as the execution data is complete, automatic write-off can be realized, and in the context of continuous standardization of business, the system can directly support real-time write-off, and the speed can be shortened to ten days in the case of incomplete write-off data and information.
Since last year, we have made a major shift in our marketing strategy, shifting from a focus on channel management to a focus on consumer operations. We have introduced a reverse incentive mechanism, that is, to motivate customers on the link according to consumers' behaviors such as bottle opening and scene activities, which not only simplifies the verification process, but also eliminates the third-party review link in some scenarios, directly saving millions of costs.
In order to ensure the efficient operation and rapid iteration of the system, we work closely with our suppliers to jointly maintain the aPaas platform. Our team has dedicated personnel responsible for business requirements analysis, system design, and mission-critical system development, while the vendor is responsible for daily maintenance and other functional development, and both parties work together to ensure that the system can keep up with the pace of marketing policies and channel promotion.
In terms of channel management, in order to achieve the integrated information exchange of manufacturers, we have developed an exclusive applet for dealers to realize the real-time exchange of information. At the same time, the consumer applet and the terminal applet are connected to each other, and the consumer's signing, bottle opening and other behaviors can be fed back to the terminal in real time, promoting the smooth progress of the verification process. At present, I think there are more innovations that can be done in this field, especially this year's marketing transformation, we have adjusted the assessment indicators of the sales department to open the bottle growth as the main weight, rather than the sales amount, which puts forward more functions, better experience, more real-time, and faster requirements for digitalization, and we have been adjusting our posture on the run.
In addition, we also use data-driven precision marketing to collect consumer behavior data, such as the GPS address at the time of bottle opening, through red envelopes and bottle opening, to generate heat maps to assist in the formulation of marketing strategies. This year, we will implement targeted media placement based on these data to achieve accurate reach and efficient communication of brand information, and further promote sales growth and brand influence.
At present, we have built a marketing index system, I take the indicators to the market repeated practice, modification, so far, I can from the indicator system, look at the region, look at the dealer, look at the terminal, look at the double K, look at the salesman, both look at the result indicators, and look at the process of implementation indicators, but also look at the quality indicators, so as to build the root cause analysis system of the entire marketing indicators, in the latest business analysis meeting, we with the help of this set of data, opened a high-quality meeting that is completely different from the previous "know it but do not know why it is". Next, we will empower this analysis system to regions, dealers, terminals, and teams.
Tiger Sniff Think Tank: In terms of supply chain optimization, are there some digital means to deal with the fluctuation of raw materials or changes in market demand?
Yu Chenghui: In terms of market demand, since we are in the MTS model, we will apply algorithms to predict sales demand, combine inventory, RCCP and completeness, and decide on the production volume of N+1 month and the amount of packaging material preparation in N+3 months through S&OP meetings, and then carry out production scheduling. In the first stage, we focus on demand forecasting and planning, supply planning, production planning, material planning, equipment maintenance planning, production scheduling, and personnel planning, and the second stage is being designed, considering adding MRP and RCCP to finally realize the agile collaboration of supply chain planning.
In terms of raw materials, our SRM system covers the business of supplier VMI, transfer plan, purchase order, receiving, warehousing, settlement, and reconciliation, but the raw material fluctuation you mentioned, in our industry, is realized through the supplier agreement material preparation, and the system is not the core means to solve this problem. If we were in the feed industry, I would use the system to connect futures data and manage hedging strategies.
Digital construction requires multi-faceted business thinking
Tiger Sniff Think Tank: As a traditional wine manufacturing enterprise, what impact changes does digitalization bring to the organizational structure and culture of the enterprise?
Yu Chenghui: Let's talk about the cultural impact first. First of all, in many enterprises, we can often see the situation of decision support data, avoid bad data, amplify good data, and create a jubilant atmosphere, but the data is cold, and the meaning behind the indicator combination is the real state. Secondly, digitalization is essentially a carrier of standardization, process and model innovation, and in the process of promoting digital construction, "learning and growth" is a requirement for all employees of the enterprise, and the enterprise is ultimately the survival of the fittest and active evolution.
Let's talk about the changes in the organizational structure of enterprises. Strictly speaking, digitalization is not a major factor in organizational structure. Mission and vision is the source, culture is the soil, strategy is the direction, organization is the support, all the organizational structure should be adjusted for the realization of the strategy, I am also the person in charge of the strategic operation center, I can't manage the operation without data, I am like a blind man, digital is very important, but in case the organizational structure can not match the strategy, then no matter how close the digital strategy is to the enterprise strategy, you can not find internal customers who match the strategy, and can only contribute to the enterprise in the field of digitalization. Therefore, the impact of digitalization on the organization is the result, and the root cause is strategy, just like a fresh food company, which seems to be doing traditional business, but in essence, its strategic design is a technology company.
Tiger Sniff Think Tank: If you were to summarize three points, what are the biggest challenges encountered in digital construction?
Yu Chenghui: First, how to stuff ideas into other people's brains, because all processes are designed and executed by people. We control the entire business architecture, data architecture, application architecture, and technical architecture, the latter two are not understood by others, and the optimization of business operations is not for everyone to keep an open mind.
Second, the depth of application of digital governance enterprises. Many enterprises rely on feelings for governance and management, and many companies say that they use data well, but in fact, what is the definition of "good"? Dashboards, BI, and Report tools are displayed "lifelike", but they have no soul, they are just tools for visiting and displaying, if this is a "digital governance enterprise", I think this requirement is too simple. The stage of "digital governance" has at least gone through several steps of system construction, data governance, data processing, KimBall construction, self-service analysis, and indexed operation, of course, this is also from the field of in-depth distribution, and we should also learn how the fresh food industry can use data to help enterprises in terminal site selection, central kitchen, cold chain distribution, and C2M efficient response of excellent empowerment cases.
Third, make it clear where the benefits of digitalization lie. I think there are different positions in different enterprises and different fields, and I am positioned in the supply chain to reduce costs and increase efficiency, but when the breadth of the core system is covered, it is not a question of how much money is saved and how much efficiency is improved, and it is impossible to explain how much the benefits of the integration of industry and finance are. In channel management, it should be positioned on the efficient coordination and authenticity of the value chain, while at the level of consumer operation, every innovation must be tied to relevant business indicators. But even so, it is still a calculation to explain where the benefits are, and no one will calculate the true cumulative benefits in five years, so solving business pain points and managing expectations is the key.
AI and digitalization are the growth drivers of the liquor industry
Tiger Sniff Think Tank: What are the applications of AI large models in the company?
Yu Chenghui: First of all, about the more popular large model, we have been testing the 6B model before, and have calculated that if it is to be put into actual scene application, the cost and benefit are not very matched, I think the commercial application is a combination of public model + private data model, which has the ability to read multiple rounds of dialogue of the public model, and can read our vector database according to permission, so as to achieve controlled output of content, some manufacturers say that it can be realized, but I think that at present, in the field of referencing semantic large models, it is still on the sidelines and pay attention. I am also very much looking forward to a more mature model in the future.
Secondly, it is the ability to embed applications, such as through AI voice translation, automatically identify and judge whether the salesman transmits the correct policy information when he visits the terminal, automatically extract the terminal store owner's appeal to our company, and automatically refine the key points for everyone, and summarize the day's visit summary.
Third, data mining, we will not be called AI models, neural networks, we call algorithms, we hope to use algorithms to solve the problem of data fitting, through a large number of data fitting, add parameter adjustment, so that the so-called remote goods channeling indicators have a more reasonable range due to people and places, as well as the inventory prediction of the deep distribution system, etc.
Fourth, other applications, such as image recognition, at present, the company will also have some image recognition applications, such as the monitoring of some major assets, and we have implemented a set of video face recognition applications. In this way, real-time monitoring is carried out on the specific division of major assets, face recognition is carried out in the video surveillance, and 10 seconds of video before and after interception and long-term storage are intercepted and stored for a long time, and early warning information is generated and pushed to the enterprise WeChat, so as to achieve the monitoring effect that no one can do. There are also small applications like SFA's store sign recognition and image anomaly recognition.
Tiger Sniff Think Tank: How do you see the trend of digital and intelligent transformation of the liquor industry in the future?
Yu Chenghui: There are a lot of exchanges between the liquor industry, in the past two years, we have been increasing capital investment in digital transformation, learning from excellent FMCG companies, I think the digital level of some liquor companies is remarkable, the future of mutual learning will improve the digital level of the entire liquor industry, I believe that the digital promotion speed of the liquor industry will be greatly improved in the next few years, because in fact, there are many successful cases to refer to.
First, at the supply chain level, in terms of intelligent construction in packaging, whether it is an automated production line or a black light factory, I don't think it is a difficult point in the liquor industry. The digital department should consider the current scale and development stage of the enterprise, and introduce intelligent equipment with the production department to improve production efficiency at the appropriate time for the purpose of reducing costs and increasing efficiency. Focusing on the upstream and downstream business of production, digitalization needs to be continuously deepened, and then based on the root cause analysis system of business indicators, data applications such as performance analysis, process monitoring, risk control, and comprehensive cost analysis of the supply chain are formed.
Second, at the level of channel management, the cost structure and in-depth distribution system of the liquor industry determine that the market cost is the core of construction, and it must be under a relatively stable business structure, closely follow the adjustment of business policies and continue to iterate, so as to achieve the fast, convenient and monitorable cost of the whole life cycle, and build an indexed operation system on this basis, look at the results, look at the action, look at the quality, do the year-on-year, do the comparison, compare with the industry, according to the configuration of the rule engine, find the anomaly in a large amount of data, I think the difficulty is not in the process of constructionIn order to be "half a step ahead", CIOs must be proficient in business architecture and business analysis capabilities, and lead the team to help enterprises establish an indicator analysis system.
Third, at the level of consumer operation, the profit structure of the liquor industry determines that a lot of articles can be done in the consumption scene, especially in the opening bottle red envelope to do a lot of derivative business superposition, which is indeed advantageous compared to the beverage industry, most of the industry innovation cases we refer to are focused on social products with high gross margins, and take it to tailor-made, and derive infinite creativity in new products, new channels, and new models.
In addition to reducing costs and increasing efficiency through system construction and achieving marketing growth through technological innovation, the key is to output the value of data assets through business architecture, BPR, and indexed operations, generate data in the process, refine indicators in the data, find growth points and improvement points in the indicators, help business growth, and help decision-makers to see through business and make decisions.
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