The Inside Track
we chatted with Enric de Francisco Arbeloa, of Equatorial Coca-Cola Bottling Company (ECCBC) about their connectivity program and the challenges they have seen deploying and executing it:
Enric, thank you very much for joining us today. We are going to talk about connectivity programs and the challenges you have seen in deploying and executing them.
First of all, to introduce yourself to our readers, can you just tell us a little bit about Equatorial the bottler and your own role within the company.
Yes, sure. Firstly, it’s a pleasure to talk to you Geoff and thank you for the opportunity to share our thoughts. In answer to your question ECCBC is a Coca-Cola bottler, based in Barcelona, that works within 13 countries in Africa. I am the Group Cold Drink Equipment (CDE) Manager, in charge of all the investment and processes related to managing our entire fleet of assets in all the markets.
Great, thanks Enric. Let’s start at the beginning of your connectivity journey. What is it that persuaded Equatorial to first begin investing in a connectivity program?
Within ECCBC we were clear that we wanted an excellent way of managing Cold Drink Equipment, which includes coolers but also different types of assets within the entire cold drink equipment range. Investing in these assets is key for us to enable our strategy in the market, with our customers and consumers. Thus, we set up the goal of achieving excellence in managing CDE to then be able to take out the most value out of these investments.
When we started this journey, we knew that achieving the goal would depend on three things: processes, people, and technology. So, we started by enhancing all our CDE processes while adjusting our structures and capabilities. Then, once we were in a good position on how to manage those assets within our organization, once mastering CDE management had been achieved, it was clear to us that it was time to evolve the plan and leverage the available technology. It was the right time to move, because we knew that this technology, smart coolers, would help us to maximize the value of the assets that we were managing and placing in the market. Not only in terms of ROI but also in terms of commercial execution, customer service, and further advantages that this new technology was offering us.
In summary, we moved into technology because we knew that it was the best lever to maximize the value of our assets once all the processes were in place.
You have mentioned working with a broad range of stakeholders. There are people who are responsible for people in the field, processes that need to be designed and executed, technology that needs to be managed etc. One of the things that we have seen, because the benefits and responsibilities are spread across multiple areas of a bottler’s operations, is that you need to put together quite a diverse team to manage this initiative. And yet, very often we see things put in the hands of just one person in one team.
How did ECCBC decide on the make-up of your team that would be responsible for getting the most out of connectivity?
It came about in a natural way within the organization, but with some specifications. There are four key departments responsible for mastering CDE processes: Commercial, Operations, Finance and IT.
We knew that we needed to build one team principally based on those four areas, but a team which worked in a different way. The technology challenged our way of working.
We decided to remove the boundaries between these teams and others, leaving us with a unique team that is responsible for everything whether it is commercial, operational, finance or IT related. It is a “business oriented” team that cares about all the different areas. Of course, this is still very challenging, because it requires different capabilities and skills, but this is what we decided we would need and what we are now deploying - a unique team for managing the entire initiative end-to-end.
We came to this decision during our initial tests of smart coolers. At that time, we were testing the technology and how it could be adapted for use in our business. Furthermore, we tested ourselves and our teams on how WE were adapting to this new tech. One of the key outcomes of that testing was that we needed to sort and better define the structure of the project team members. We realized we needed a team that was aligned regardless of whether you were from operations, or commercial or IT. Many challenges we faced required a common and unique answer that could not be defined from the perspective of each area’s “boundaries”. So, we understood that the project structure and its organization should also be in the same way.
This is what we created, one unique team developed from three key departments, all together working with full transparency and dedication to the same “business” outcomes.
That’s great, thanks Enric. I’d like to ask a question related to that answer. You’ve mentioned that you were building a unique team, something where the boundaries are completely erased. Having removed those boundaries, what has that team been able to do with the data it now has access to, via the technology, that it couldn’t do previously?
We are still not at that point of the journey, because we are still implementing the first stages. What I can tell you instead is the vision that we have. We are going to be able to access new information that we have never had before. So here the challenge is: How are we going to take advantage of that information? How are we going to manage it and call it into action in the best way? We believe that we have the answer, a clear use case defined, but we have to prove it on a daily basis in a real environment in order to ratify it.
First, we are using “basic” data. Once that data is ‘settled’ within our daily operations we will move to the next step - enlarging the range of the data available that we leverage. We believe this is a long journey so we can’t tackle all the benefits at once. Thus, we will primarily focus on two areas of direct improvement in field execution by leveraging this new data.
The first area is commercial. We really believe that by having new information about the asset location and its productivity, we will be able to improve our market execution. We will have the capability to improve our performance by defining and executing specific action plans to improve our market execution. The second area of focus is operational, related to customer service and customer satisfaction. By having access to new information about the health of our assets, we can improve our service and therefore the satisfaction of our customers. We know how to do it in both areas and of course how to measure and track it.
By having access to this new data and using it for calling into action our commercial and operations department, we will improve their field performance.
Ok, I wonder if I can dig under part of that answer, without you having to reveal anything confidential. I’m really interested in what you are saying about the ability to improve market execution. We know the isolated data sets. We know about location and door openings and temperature and so on, but how do you stitch that together to improve market execution?
This is all part of our company’s digital transformation effort - the challenge is HOW are we going to use that information to call for actions and get the expected results! Because, remember that we are people within a culture, within a market, with a certain type of history and we are used to doing things in a certain way. What we are implementing now is something disruptive in that sense.
So, your question is linked to something we take very seriously – change management. The question is, how are we going to, within an organization, use this new information to do our job in a better way. How do we introduce this new information in a smooth, easy and natural way to our daily routines, our daily governance, our daily training, into our capabilities and processes? What do we need to change to make it happen?
Of course, it has to happen step-by-step and in an organized manner for ensuring a settled and sustainable future. We have to understand the priorities to begin with. This change on calling data into action requires a clear road map on how to implement it. It is our people who will do the market execution improvement. This new technology is meant for servicing our people. Thus, ensuring they are capable to make the most of it is a critical area to ensure the successful implementation of smart coolers project. We believe we will have succeeded when no-one realizes that this is already within our system.
For example, consider the sales force…when they have their morning meetings at their sales centres, when they start the day talking, reading, reporting, and designing plans about certain commercial actions. Today this governance is well settled and now the challenge is about introducing new information within these routines to support it and contribute to improving the action plans to execute in market. If we can achieve these improvements without the sales force feeling that this is unnecessarily different and also that this new information helps them to do their job, we believe that would be a good start!
To summarize - a successful change management process ensures that all this disruptive technology will not be noticed as disruptive and will be introduced into daily routines in an effective and efficient way.
Earlier you mention Covid-19. I’m sure as we run these interviews in the coming months, we are going to have to bring up the subject of Covid-19. You mentioned that it had delayed your plans, but I’m interested to understand what Covid-19 meant to your strategic need to implement this program. Did it push it to the back, or did it give it greater importance? What did it mean for your need to implement connectivity?
As with the whole industry, Covid-19 has shaken our initial plans from the top down. We had to understand and readjust to this new environment. In terms of this specific ‘smart cooler’ program, Covid-19 has highlighted even more the importance of this project within the digital transformation Journey and also pushed us to prove to ourselves that we are ready for these kind of projects as a group.
Before Covid-19, ECCBC was already taking digital transformation within the commercial areas very seriously, because we really believe that this is a key lever for a competitive advantage in-market in the near future. The appearance of Covid-19 made it even more clear how important this is and how we need to implement it even earlier and faster than initially planned.
At the same time, it has also presented new challenges. The market and the environment have changed; for instance our consumers are changing their behaviors, our customers have different schedules and different ways of doing business, so we have had to adjust our way of working, our plans for implementing this technology, our change management plans etc. which makes it more challenging, and in some aspects it took more time.
I know what you mean, I think that I would summarize what you are saying as this: It has emphasized that the operational need is there, but the goal posts keep moving!
Putting Covid-19 to one side, I don’t think I have ever spoken to anyone involved in connectivity programs that has said deploying the program was easy. These are not necessarily plug-and-play solutions, so from your own personal perspective, what type of deployment challenges did you face that you did not expect to have to deal with?!
Yes, ok, this is a very important question to answer, and an ‘open’ one for us. Let me do it in the simplest way I can. When we started the journey, something that we noticed right at the beginning was that the IoT technology and business practice in this niche of our sector was not yet properly standardized. Somehow, we felt It wasn’t mature enough, we were stepping into an early stage field, a fast-growing market that was still, let’s put it this way: “under construction”.
From this initial feeling it became clear that, as a non-standardized business, there were a lot of mis-aligned parts. For example, there were some smart hardware suppliers that were not aligned in the best way to the OEMs and software platforms. At the same time there were different software providers with different standards and few “successful stories” to share. And finally, we had different markets (bottlers) having a different business understanding of how IoT could play out within their business. All in all, it was then clear that this reality would made the smart coolers journey even more challenging.
So, we realized rapidly also that there were no clear guidelines or an easy-to-understand way of progressing, because there was nothing written down. No ‘white books’ were available! We had to truly challenge ourselves and truly understand what our needs were and how to make them happen. How to move from designing and planning to implementing and making it happen!
The implementation process, as you know, is difficult and very demanding, and we expected to put the focus in here. However, we realized other areas were demanding our efforts and attention to ensure successful implementation. Then, to overcome this situation, we decided to take the responsibility and leadership to try to contribute to the business standardization with our partners. We shared diagnostics and we were aligned in this purpose.
This “unexpected reality” had indeed direct implications in our project in terms of effort, efficacy, and efficiency. So, we are committed in standardizing our way of doing things, strongly believing and hoping that this “ECCBC way of doing things” will contribute to the standardization of the IoT Business industry in FMCG. We’ll see how that goes!
I think you believe strongly, as do we, that there needs to be a more centralized approach, less technology silos with everybody doing their own thing. There needs to be some common standards for everyone to adhere to and then for everyone to compete using those standards.
Yes, standardization is an important point, but not the only point. I would put it in a different way, perhaps because I am less technically minded. I would say instead that what is missing somehow is connecting the dots. For instance, hardware vendors should be connected somehow with the software suppliers that manage data in all the different platforms. Because, for instance, if the hardware and software suppliers are not truly agnostic and aligned, then it’s going to be very difficult to customers, Coca-Cola bottlers in this case, to get the most out of the smart technology.
Also, I believe we need to remember that today’s reality is not going to be the same as the reality in two or three years’ time. We need to be “connected” with all IoT business stakeholders (hardware, software, OEM’s, consultancies and end users/bottlers), not just in terms of technology, but also in terms of business requirements, customized needs, etc. so it will be easier to standardize the business and unleash all the potential benefits for customers available with this new technology.
It is very clear to me that we need to make an effort, all together, all the players in this field, to make sure it becomes a field capable of rapid growth in a sustainable manner. I would suggest to all of us that we make that opportunity real by connecting the dots, by working together, by understanding each other – together we can make it happen.
You’ve mentioned about joining the dots across multiple players… you face your own particular challenge at ECCBC as you have 13 different markets. Some of those markets represent very challenging trading conditions. How will you, at a high level, meet the challenge of establishing best practice across all those different markets?
What you are saying is not only a challenge with the smart coolers project, it’s our daily reality!
Once you have a group with different countries, different realities, different markets, different cultures, very little is the same and this is one of the challenges to manage…how as group we evolve and grow, and how it takes synergies between all of us, because we work as a group and not as isolated operations.
One of the answers to these questions is very important for this smart cooler project - again, it’s ‘standardization’…we need to create standards. Thus, we are creating frameworks and ways of working that work across markets and apply to all operations within the Group. These ways of working, this type of standardization, help us to build a clear framework and models and policies on how things need to be done. Then of course, when this framework is implemented it can be adjusted as per the realities of each market at each moment.
This is how we believe a project like smart coolers can successfully be implemented in our territories.
Ok, understood. Final question then… and this encompasses everything that we have spoken about. In every enterprise you need to balance the need for innovation, whilst at the same time dealing with the day-to-day core business and in a big organization like ECCBC you have financial needs, cultural needs, governance needs. It’s a big question, I appreciate, but how do you balance those when deciding on your connectivity strategy, how much of that do you take into account when you are thinking about the best way to do this?
You touch again on another important point and, again, this is not only about this connectivity project, it is also about our business reality. In fact, what is underpinning your question, and correct me if I am wrong, is how we balance the short-term with the mid to long-term needs.
This is the trade off, how do we manage that? In that sense I am going to say how WE have done it in this project, but at the same time I believe that is the right way of doing it. One of the key factors has been the sponsorship from the senior management within the organization, and at those levels they have a clear understanding of how to precisely balance the short vs mid to long-term initiatives, and their strategies and resources. Where to speed up, where to slow down. ECCBC takes these digital transformation initiatives very seriously, particularly with the smart cooler program which is one of our fundamental projects. So, sponsorship is a key element for ensuring this balance you are asking about.
There is another important balance to manage when we consider the smart coolers project… We are now focused on implementing the plan that was defined some time ago. Executing and implementing requires huge focus and effort. However, at the same time, we are also thinking about and designing our next steps. We must look forward to what the business will require in the mid-term and start setting up what is required to keep delivering happiness in our countries by that time! Balancing both aspects is a “secret formula” for ensuring success and sustainability of the smart cooler initiative.
Thank you very much for your time Enric. There are a lot of interesting answers in there that I know people are going to be fascinated to read.