The Inside Track
we chatted with Anna Tsogka, of Coca-Cola European Partners (CCEP) about its connectivity program and the challenges she has seen deploying and executing it:
Anna, thank you so much for giving up your time today. Firstly, for our readers please just introduce yourself by telling us a little about CCEP the bottler and about your own role within it.
Of course, let me first start with CCEP. CCEP is the largest Coca-Cola bottler by revenue. It’s a modern company, active in 13 markets across Western Europe, with 23,000 employees. We are proud to say we serve one million outlets with 300 million consumers. CCEP has 47 manufacturing sites in Western Europe and produces 14.2 billion litres per annum. We have a variety of products, continuous innovation, it is a really modern company with excellent processes and takes good care of its employees.
I am very happy to be with CCEP, I have now been with the company for three and a half years. I hold a central position within the engineering department, that is under ‘Supply Chain’ in the organization. I am responsible for cold, and now hot drinks equipment, in terms of technology and innovation. The pillars that are under my responsibility, cover portfolio management, innovation for the equipment across the territory, compliance of the equipment and of course the big topic of sustainability, since equipment is a big contributor to the carbon footprint of the company.
Thank you, Anna, and yes we’ve been reading about those sustainability goals very recently and the targets for 2040, very impressive!
Let’s then start with our topic of connectivity. What persuaded CCEP to first begin investing in a connectivity program? What were the strategic imperatives?
CCEP first of all started the journey of business transformation, and the Internet of Things (IoT) is a very important cornerstone of that. So, it is within the strategy of CCEP to drive transformation across all areas and connectivity of assets is part of this digital transformation. Of course, the aim here is to make CCEP better, faster and far more efficient than it is today. So, for us, talking very specifically about the connected assets program, it was obvious from the very beginning that with obtaining the knowledge of what is happening with our equipment, we can really act upon and drastically improve our business in terms of moving our assets in such a way that we increase sales.
So, considering that point and also that we now know exactly where our assets are, without having the need to deploy people to get that information, there were two main conclusions that made it obvious that this program is a successful one and can bring substantial benefits. That was the trigger point for the company to agree to develop and run this program and invest further in connected assets. It is now CCEP’s strategy to eventually connect all of our assets. We started with the coolers and vending machines, but we would like all new assets that we put in the market to be connected.
That will mean a very far-reaching program of course, with lots of areas of impact. We’re talking about benefits which are important to many areas of the organization. So, notwithstanding your own role, how has CCEP built the team it needs?
Actually, that started from the very beginning of the program. As you may understand, this program affects all the areas of the organization, so we created a team with eight different work streams.
The first workstream’s aim was to update the commercial agreements. So, before we even deployed the first units into the market, we had to have clarity on the agreements that should be in place to ensure awareness and consensus of the customers. That was one aspect. Of course, there were the big planning activities, how we are going to connect suppliers with our Business Units to enable a smooth roll-out. Then in terms of identification of correct use cases there were streams covering assets’ movement and tracking…what we are doing if that happens, from a commercial point of view. Marketing is also involved, because within the functionalities we have the possibility for consumer engagement so how we are using the data in terms of creating the correct promotions is important. Another stream focuses on the remote diagnostics.
I have mentioned six different streams: the next concerns the commercial use cases and the identification of the right KPIs. There is a final work stream on security and technical agreements that covers the protection of our data, and the necessary integrations that we need to do in the systems covering also all the necessary security under the framework of IT.
So, as you now understand, there are many subject matter experts involved in the whole process and also representatives from all the countries that we operate in, because different rules might be applicable in different markets. In summary, the structure and the governance that we put in place was a core team responsible for coordinating several works streams where people across all the countries were involved.
That is a very comprehensive answer, thank you. And a very comprehensive operation by the way, there is clearly an awful lot of thought that has gone into setting up that structure. With such a structure, I wonder if there were any skill sets or resources you needed to leverage those improvements that weren’t previously part of your organization? I’m trying to get a flavour for how the make-up of the company changes with the opportunity afforded to it by connectivity.
I would like to put it under two different areas. One area is related to the fact that there is constant change in the electronics world, and this changes the skills that our technical people need to have. Then, on the business side of course, we are talking about the management of data, data processing and data analytics to give you the correct trends, and to analyse and give you more insights that we could potentially see when looking at the data. So, in both areas there are skills that are potentially new or not fully present within our organization and additional actions are needed to secure the adequate number of experts within our team.
Understood. You brought up a subject which is, I think quite topical…the new skills required to deploy the electronics versus the previous skills in the organization. I’m curious as to the type of deployment challenges that you faced, perhaps that you didn’t expect to? Things that you would advise others to look out for and avoid?
I don’t want to exaggerate the level of difficulty, but there were challenges of course. However, with the correct processes in place we managed to overcome them. At the very beginning of the deployment, with just a few units in place, we initially faced challenges in terms of selecting the correct technology to get what we wanted. For example, we deploy our equipment inside buildings, so a lot of the geolocation technologies giving the accuracy that we wanted didn’t work in those contexts. So, there was some back and forth in order to identify the correct technology to locate our equipment, depending also on their placement.
Another area of due diligence is to make sure that the correct communication and agreements are in place before any deployment and that may be different from country to country, so the necessary resources have to be engaged.
Another challenge, which we are still dealing with, is of course the integration of the systems. What we have requires a lot of work to ensure that the correct automation is in place. You don’t want people to stay be forever processing data, so this is a challenge that is ongoing, since it is only human nature to always want ‘something more’.
These are the three areas that I would mention as steps that you need to tackle in any deployment, in order to have the level of efficiency that you expect.
Great, thank you. One of the things that you mentioned there, the integration of systems… I’ve had conversations with some bottlers where we have talked about a wider issue with IoT solutions. Some IoT solutions are quite siloed, whereas obviously in a very large organization such as CCEP you may well benefit from a more centralized approach. You have an initial solution which puts all the data in one place, but you need that data to flow through the organization. How have you tackled that challenge?
I agree that a more centralized approach may be needed here rather than local solutions that can work in one place, but not in another. This is an area where we have not come to a final conclusion and we are in the process of identifying the best way.
If you remember the organizational structure I talked about earlier, we first took the input of all the countries in our specification before set-up. All this input had to then be considered by a central team in order to develop the dashboards and reporting systems that make sense for everybody. Then you have the continuous fine-tuning based on experience, findings and usefulness of key performance indicators.
In summary… you try to combine the expertise at a local level that also highlights particulars of the respective business unit. You try to integrate that expertise within the overarching aim of the project, delivering something that needs ongoing finetuning depending on the targets and the priorities of the business.
That’s really clear, thank you. I just have one final question for you which is around the overall business strategy. How do you balance the need to drive innovation whilst at the same time driving core business? Is that a challenge, or is there a framework within CCEP that makes that easier for you?
(laughing) Nothing is easy! However, you face that challenge with the correct culture and processes. I need to say that innovation in CCEP exists in whatever we do, and it is a way of life within the organization. There is a continuous challenging of the status quo and this is embedded in our culture. So as an employee, what I continuously see is that from one side there is a continuous motivation for the employees, customers and consumers to bring new ideas for innovation. On the other side there are very well thought out processes to capture these ideas. And then in terms of where CCEP invests, there is always investment in innovation.
So, it is within the culture of the company and its people to challenge everything and to bring new ways of thinking and doing to how we do things. This is well captured, so that the entire organization is aware of all the innovative ideas and there are always trials of new things. Of course, there is a process of making sure that a good part of the annual investments covers innovation. It’s a well thought-out and structured process to ensure that innovation is at the forefront of whatever we do.
Ok, it’s in the organization’s DNA essentially!
Well Anna, I’m going to bring this interview to a close here. Thank you again for your time, I think many of our readers will find this absolutely inspirational!