When Chris Wright, the chief information officer at Nestlé, discusses the potential of artificial intelligence (AI) to enhance operational efficiency, he emphasizes that financial savings should not be the sole focus. “One of the big learnings we’ve had is don’t focus too much just on the efficiency,” Wright noted, pointing out that the most significant value often lies in improving procurement processes and reducing energy consumption in manufacturing rather than merely increasing human efficiency.
One notable initiative reflecting this approach is Nestlé’s pilot project utilizing a generative AI assistant designed to create fulfillment plans for distributors and retail clients. Historically, the company has aimed to standardize the order fulfillment process, especially for major clients like Walmart and Target, where automation plays a key role. However, the integration of AI enhances this system by not only accelerating the creation of fulfillment plans but also improving their quality. “That’s improving our customer order fulfillment, which can help us grow sales,” Wright explained.
This AI capability is particularly beneficial for smaller retail clients, who often lack the digital resources of larger retailers and typically place orders manually. AI is being deployed to evaluate Nestlé’s sales recommendations for these smaller customers, allowing human representatives to utilize saved time to explain the advantages of AI-generated plans. This additional guidance has shown to increase the likelihood of these clients placing orders based on Nestlé’s recommendations.
Wright, who has been with Nestlé for nearly three decades and has served as global CIO since 2021, oversees the digital transformation of the world’s largest food and beverage company, which ranks No. 97 on the Fortune Global 500. With a vast portfolio that includes over 2,000 brands and 337 factories operating in 185 countries, Nestlé’s operations are complex. Nevertheless, 90% of the company’s core processes are standardized on a global SAP template, facilitating the testing and scaling of technology solutions across different markets.
This centralized data foundation allows Nestlé to address challenging questions regarding energy efficiency in factories and the optimization of media spending by gleaning insights from a cohesive dataset. “What we’ve increasingly tried to do is piece all of that together in a data foundation that connects across the value chain,” Wright stated. As a result, the company is beginning to unlock significant value by rethinking end-to-end operations and decision-making processes.
The integration of a connected data ecosystem has made it simpler for Nestlé to implement generative AI tools from vendors like ServiceNow and Microsoft. The latter’s Copilot, for instance, is currently utilized by around 100,000 employees monthly. In addition to fulfillment planning, Nestlé has embraced AI for pricing analytics, moving away from siloed approaches to consider broader dynamics in pricing strategies. A pilot project in India and the U.S. has laid the groundwork for scaling this AI-powered pricing model globally.
Wright remarked, “Because we’ve got common systems, common data models, and common processes, if I can get this right in one country, there’s a very high likelihood we can get it right in most of our countries.” This scalability is a critical target for the company as it navigates the complexities of global markets.
Moreover, Nestlé is employing AI technology to streamline processes such as transportation auctions and machinery shutdowns on factory floors. The development of a virtual sales assistant is particularly noteworthy; this tool was created to alleviate time-consuming tasks such as collating sales data and product launch details. “My belief on this—I couldn’t tell you that we can measure this yet—is that actually it’s going to make them more effective in those meetings,” Wright said, suggesting a future revenue-generating potential.
In October, Nestlé achieved a significant IT milestone by completing its first major upgrade to SAP S/4HANA, which encompasses core functions like manufacturing, supply chain, and finance across 112 countries in Africa and Asia. This upgrade not only enhances operational capabilities but also paves the way for more use cases involving SAP’s generative AI copilot, Joule.
However, this technological advancement comes amid challenging circumstances. Nestlé announced plans to reduce its workforce by over 16,000 employees under new CEO Philipp Navratil, with a focus on “operational efficiency,” which will predominantly affect white-collar roles. While Wright acknowledges that AI is a contributing factor to these layoffs, he emphasizes that it is not the sole reason. He illustrated a scenario where a product manager traditionally supported by multiple project managers could now be augmented by AI tools to maximize productivity.
“We’re more heading towards the latter,” Wright explained. “Now, you still need expertise in these areas. It doesn’t drop to zero, but it fundamentally reshapes it.” He insists that employees remain central to Nestlé’s operations; over half of the workforce is engaged in physical manufacturing and sales roles. By investing more in data and analytics, the company aims to enhance both factory processes and employee effectiveness.
The potential benefits of AI are not solely about reducing headcount, as Wright posed the question, “Can we use that in order to visit more customers or spend more time with the important customers?” This illustrates the company’s strategy of reallocating time towards more value-added activities rather than merely eliminating positions. As Nestlé continues to navigate the complexities of AI integration and operational efficiency, the emphasis remains on leveraging technology to enhance productivity while maintaining a robust human workforce.
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