ED 39 - Frito-lay : The snack giants digital transformation

Dear Digital Transformation Enthusiasts,

Welcome to the 39th edition of Unveil: Digital Transformation. Get ready to sink your teeth into a delicious case study – Frito-Lay 's remarkable digital transformation journey fueled by the expertise of IBM Garage. This story transcends optimizing chip distribution; it's a masterclass in user-centric innovation that yielded impressive results and a blueprint for success.

The Challenge: Feeding a Snacking Empire

Imagine the logistical complexity behind delivering your favorite Frito-Lay products to millions of stores – that's the reality Frito-Lay faces. Here are some staggering numbers to consider:

• Annual Potato Power: Frito-Lay uses enough potatoes annually to reach the moon and back – twice!
• Massive Workforce: They boast a 69,000-person workforce, with a frontline sales team of 25,000 servicing over 300,000 retail stores weekly.
• Ever-Evolving Consumer Demands: Keeping up with a customer base craving both classic favorites and innovative new flavors requires constant agility.

The Solution: User-Centric Transformation with IBM Garage

Frito-Lay partnered with IBM Consulting and its Salesforce practice. Leveraging the renowned IBM Garage methodology, a user-centric approach, the team embarked on a transformative quest

• Understanding the Ecosystem: IBM iX , the user research arm of IBM Garage, conducted a massive research effort, clocking nearly 1,500 hours and creating 40 user personas. They shadowed frontline employees, interviewed managers, and documented pain points across the entire value chain.
• Data-Driven Prioritization: By ranking pain points based on user and business value, the team ensured their transformation efforts addressed the most critical needs. They even went a step further, calculating the financial impact of solving each pain point to prioritize development.

The Results: A Snacking Revolution

"Snacks to You": This innovative B2B e-commerce platform empowers small businesses like bodegas and food trucks with a streamlined online ordering and delivery process. Here's what makes it special:

• AI-Powered Insights: Integrated with Frito-Lay's proprietary snacking insight AI engine, "Snacks to You" uses data-driven suggestions to recommend products based on seasonality, regional trends, and even events like the Super Bowl.
• Predictive Inventory Management: The platform predicts when retailers' inventory is running low and suggests curated assortments, minimizing stockouts and maximizing sales opportunities.
• Data-Driven Customer Dashboard: A comprehensive dashboard displays historical sales data, predictive analytics, and a "snack score" indicating a customer's potential product preferences.
• 30,000 Active Users and Growing: The platform's success speaks volumes, with 30,000 active users and continuous growth. This translates to: Reduced Out-of-Stock Scenarios: Retailers experience fewer stockouts, minimizing lost sales opportunities. More Efficient Ordering: Ordering becomes faster and more convenient, eliminating the need for expensive rush shipments. Enhanced Product Discovery: Retailers can discover and incorporate new Frito-Lay products into their offerings, catering to evolving customer preferences.

"Sales Hub": Powered by Salesforce Service Cloud, "Sales Hub" streamlines frontline employee workflows and empowers them with a user-friendly mobile app

• Optimized Delivery Routes: Salesforce Field Service Lightning streamlines delivery routes, ensuring efficient product distribution.
• Real-Time Communication: A seamless communication channel ensures smooth collaboration between dispatch, drivers, and merchandisers.
• Geotagging and Data-Driven Insights: Automatic check-in and check-out at stores via geotagging allows for mileage calculations and optimized route recommendations.
• Reduced Downtime: Delivery status tracking identifies potential delays, allowing for proactive adjustments and minimizing downtime.
• Improved In-Store Operations: Helpful stocking instructions and planograms within the app empower employees to make real-time adjustments to product inventory based on demand.
• Streamlined Workforce Management: Managers and employees can access timesheets, make vacation requests, and adjust schedules directly within the app, fostering greater efficiency.

Critical Analysis: Lessons for Your Digital Transformation Journey

Frito-Lay's success story offers valuable insights for organizations

• The Power of User-Centric Design: Putting user needs, both internal and external, at the forefront is paramount. By deeply understanding the challenges faced by employees and retailers, Frito-Lay and IBM could craft solutions that deliver tangible value across the value chain.
• Data-Driven Decision Making: Leveraging data to prioritize pain points and measure the financial impact of potential solutions ensures focus on areas with the greatest potential return on investment.
• The Importance of User Research: Investing in user research like Frito-Lay did, with extensive interviews, persona development, and shadowing, provides invaluable insights that guide the development process.
• The Synergy of Innovation and Transformation: Frito-Lay's approach, combining separate tracks for innovation and transformation, allowed them to explore new ideas while streamlining existing workflows.
• The Value of a Robust Platform: The Salesforce platform provided a scalable foundation for building these innovative solutions, facilitating integration with existing systems and ensuring future flexibility.
• Embrace Continuous Improvement: Digital transformation is a journey, not a destination. Frito-Lay's ongoing commitment to innovation, expanding the IBM Garage methodology across the organization, ensures they can adapt and evolve to meet future challenges.

Beyond Frito-Lay: Industry Trends

Frito-Lay's digital transformation journey reflects broader trends shaping the snacking industry and beyond:

• The Rise of E-commerce: B2B e-commerce is booming, with a projected reach of $8.6 trillion by 2027 according to a Shopify Plus report [Source: Shopify Plus report, not accessible via link]. "Snacks to You" positions Frito-Lay to capitalize on this trend by simplifying e-commerce for small businesses.
• The Power of AI: The integration of AI in "Snacks to You" showcases its potential to revolutionize B2B interactions by personalizing recommendations and optimizing inventory management.
• The Evolving Customer: Consumers today expect convenient, data-driven experiences. Frito-Lay's focus on user experience throughout the transformation process aligns perfectly with this trend.

Conclusion: A Recipe for Success

Frito-Lay's digital transformation journey serves as a masterclass in leveraging user-centric design, data-driven decision making, and cutting-edge technology to achieve remarkable results. By prioritizing user needs, embracing innovation, and partnering with the right expertise, Frito-Lay secured a competitive edge in the ever-evolving snacking landscape.

Let's continue the conversation!

Share your thoughts and experiences with digital transformation in the comments below. Until next time, happy snacking – and innovating!

Stay connected for forthcoming editions where we try to understand more of these industry veterans who have successfully adapted digital transformation.

To successful transformations!