Aforza boosts digital twins for consumer packaged goods with $20M raise

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Aforza, a digital twin platform for orchestrating consumer packaged goods sales, has landed $22 million in series A funding. The investment will help grow employees and create a new U.S. headquarters. Investors included DN Capital, Bonfire Ventures, Daher Capital, and Next47.

Consumer packaged goods (CPG) include food and beverage, alcohol, beers and spirits, consumer health care, household products, tobacco, pet care, and consumer electronics. The company was founded by former Salesforce execs involved in CPG efforts.

The cloud service sits on top of Salesforce and Google Cloud platforms and helps connect the dots across key processes required to sell consumer goods. This includes commercial planning, field sales to retail channels, coordinating promotions, orchestrating distribution, and tracking the impact of promotional experiments. This allows teams to iteratively experiment with ideas across different markets and scale up the successful ones.

Growing in a slow growth market

The company plays in the $14.5 billion consumer packaged goods (CPG) software market led by SAP, Microsoft, Adobe, and Salesforce, according to Apps Run the World.  As a whole, this category of tools is only growing at 1.5%.

However, Aforza believes its strategy focused on building digital twins to enhance workflows gives it a competitive edge. Research from Oliver Wyman found that companies using legacy CPG platforms lost at least 5% of sales because of lack of availability. And Progressive Grocer found that 70% of the money invested into trade promotion programs was unprofitable.

“We see an inherent disconnect across the industry in the way commercial planning and field sales teams are working together. This is both in the way they communicate with each other and the systems they use,” Aforza CEO and cofounder Dominic Dinardo told VentureBeat.

Vendors are exploring ways to create digital twins for more ephemeral things like digital twins of the organization and supply chains. Aforza is arguably creating something similar for product distribution.

For example, there are hiccups between the applications used for finance, trade planning, sales, and marketing. Even when these systems are integrated together, the data flow only provides historical context. As a result, finance needs to wait to see the impact investments, trade planners have trouble tracking execution, and sales teams have difficulty tracking which stores faithfully carry out the promotions.

Aforza believes that a digital twin of the sales and distribution system helps to align these efforts and provides real-time data exchanges across different workflows such as:

  • Launching highly targeted promotions, measuring results, and then simulating different scenarios to estimate budget impact.
  • Connecting new plans to the retail auditing process to see which stores comply with promotion agreements and correlate these efforts with sales, pricing information, and competitive product strategies.
  • Capturing the financial progress and ROI of a new promotion in real time so that teams can launch multiple experiments across various markets and then pivot to the most successful ones.

Digitizing ephemeral things

Digital twins are typically associated with concrete physical things like cars, airplanes, or buildings. Supply chains and distribution channels are a bit more ephemeral, which can make it difficult for everyone to see the outlines and mechanics of how it works, how it breaks, and what strategies bring the most success.

Aforza’s tools provide a digital twin of a company’s route-to-market and distribution channel. This approach has strong parallels with supply chain digital twins because it provides a real-time closed loop of information across multiple parties.

In other industries, the digital supply chain twin is a digital copy of a company’s actual supply chain, with inputs fed into the model in real time. Aforza does something similar for trade promotion ROI and optimization.

The CPG industry is starting to adopt the term “trade promotion execution” (TPX) to describe the lifecycle of experimenting with new marketing and promotion ideas. This helps companies close the loop between trade promotion planning and retail execution. They can plan, execute, and improve promotions in real time.

One thing companies need to keep an eye on is compliance. Just because a larger retailer has taken your money to launch a new promotion does not mean that every branch will faithfully hang the new signs, which some managers may find disagreeable or too much effort. This may hurt sales, but also planning teams cannot properly correlate sales changes with what is happening in the stores.

Another key element of building a digital twin is understanding how outside events like the weather and the competition affect sales efforts. For example, an ice cream company may want to experiment with promotions across several outlets by the beach. Meanwhile, a competitor has just launched a series of competitive campaigns that are hitting sales. The first field team picks up on this, which is immediately shared with the digital twin. This input is fed into an AI model, which automatically optimizes the targeting, suggests a set of new promotions for the sales team to run, and predicts the impact of various strategies for outmaneuvering the competition.

Dinardo maintains the Aforza approach is part of a much larger trend driving digital transformation across various industries.

“The digital twin concept is all about moving away from using historical data and outdated analytical models to inform your decision-making process, towards a real-time, closed-loop way of working,” he said.

He points to the success of other leaders such as Veeva Systems in the life sciences industry and Vlocity (Salesforce Industries) across the communications, energy & utilities, and health care sectors.

“I am a great admirer of what they have done and how they have connected planning to execution in real time using the cloud,” Dinardo said.


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Google’s Visual Inspection AI spots defects in manufactured goods

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Google today announced the launch of Visual Inspection AI, a new Google Cloud Platform (GCP) solution designed to help manufacturers, consumer packaged goods companies, and other businesses reduce defects during the manufacturing and inspection process. Google says it’s the first dedicated GCP service for manufacturers, representing a doubling down on the vertical.

It’s estimated that defects cost manufacturers billions of dollars every year — in fact, quality-related costs can consume 15% to 20% of sales revenue. Twenty-three percent of all unplanned downtime in manufacturing is the result of human error compared with rates as low as 9 percent in other sectors, according to a Vanson Bourne study. The $327.6 million Mars Climate Orbiter spacecraft was destroyed because of a failure to properly convert between units of measurement, and one pharma company reported a misunderstanding that resulted in an alert ticket being overridden, which cost four days on the production line at £200,000 ($253,946) per day.

Powered by GCP’s computer vision technology, Visual Inspection AI aims to automate quality assurance workflows, enabling companies to identify and correct defects before products are shipped. By identifying defects early in the manufacturing process, Visual Inspection AI can improve production throughput, increase yields, reduce rework, and slash return and repair costs, Google boldly claims.

AI-powered inspection

As Dominik Wee, GCP’s managing director of manufacturing and industrial, explains, Visual Inspection AI specifically addresses two high-level use cases in manufacturing: cosmetic defection detection and assembly inspection. Once the service is fine-tuned on images of a business’ products, it can spot potential issues in real time, optionally operating on an on-premises server while leveraging the power of the cloud for additional processing.

Visual Inspection AI competes with Amazon’s Lookout for Vision, a cloud service that analyzes images using computer vision to spot product or process defects and anomalies in manufactured goods. Announced in preview at the company’s virtual re:Invent conference in December 2020 and launched in general availability in February, Amazon claims that Lookout for Vision’s computer vision algorithms can learn to detect manufacturing and production defects including cracks, dents, incorrect colors, and irregular shapes from as few as 30 baseline images.

But while Lookout for Vision counts GE Healthcare, Basler, and Sweden-based Dafgards among its users, Google says that Renault, Foxconn, and Kyocera have chosen Visual Inspection AI to augment their quality assurance testing. Wee says that with the Visual Inspection AI, Renault is automatically identifying defects in paint finish in real time.

Moreover, Google claims that Visual Inspection AI can build models with up to 300 times fewer human-labeled images than general-purpose machine learning platforms — as few as 10. Accuracy automatically increases over time as the service is exposed to new products.

“The benefit of a dedicated solution [like Visual Inspection AI] is that it basically gives you ease of deployment and the peace of mind of being able to run it on the shop floor. It doesn’t have to run the cloud,” Wee said. “At the same time, it gives you the power of Google’s AI and analytics. What we’re basically trying to do is get the capability of AI at scale into the hands of manufacturers.”

Trend toward automation

Manufacturing is undergoing a resurgence as business owners look to modernize their factories and speed up operations. According to ABI Research, more than 4 million commercial robots will be installed in over 50,000 warehouses around the world by 2025, up from under 4,000 warehouses as of 2018. Oxford Economics anticipates 12.5 million manufacturing jobs will be automated in China, while McKinsey projects machines will take upwards of 30% of these jobs in the U.S.

Indeed, 76% of respondents to a GCP and The Harris Poll survey said that they’ve turned to “disruptive technologies” like AI, data analytics, and the cloud to help navigate the pandemic. Manufacturers told surveyors that they’ve tapped AI to optimize their supply chains including in the management, risk management, and inventory management domains. Even among firms that currently don’t use AI in their day-to-day operations, about a third believe it would make employees more efficient and be helpful for employees overall, according to GCP.

“We’re seeing a lot of more demand, and I think it’s because we’re getting to a point where AI is becoming really widespread,” Wee said. “Our fundamental strategy is to make Google’s horizontal AI capabilities and integrate them into the capabilities of the existing technology providers.”

According to a 2020 PricewaterhouseCoopers survey, companies in manufacturing expect efficiency gains over the next five years attributable to digital transformations. McKinsey’s research with the World Economic Forum puts the value creation potential of manufacturers implementing “Industry 4.0” — the automation of traditional industrial practices — at $3.7 trillion in 2025.


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Fortnite Bargain Bin discounts island goods in last week to spend bars

There’s only one week left in Fortnite Chapter 2 – Season 6 — and as with the previous season, Epic has warned that you need to spend your gold bars because balances will be reset to zero starting with the next season. Here to encourage that spending and give players some exotics to finish their challenges is Fortnite Bargain Bin, a week of discounts that’ll be found at island vendors across the map.

Epic refers to this as an in-game clearance event, though keep in mind that it doesn’t apply to the Item Shop. Rather, Bargain Bin week brings bar discounts to the island vendors (bots) who offer weapon upgrades, Exotic weapons, and other things that give you an edge during gameplay.

With the vendors discounted, you can get these upgrades and Exotics at lower rates, helping you spend the bars and squeeze in a few more victory royales. Some examples of the discounts include the opportunity to get the Exotic Grappler Bow, Exotic Marksman Six Shooter, and Bushranger’s proper disguise service at half off the usual bar cost.

The gold bar discounts will be available through June 7, the last day of the current season. Epic plans to launch Fortnite Chapter 2 – Season 7 on June 8, at which point your bar balance will be reset to zero and you’ll have to start collecting the gold again through gameplay and harvesting.

It’s unclear whether this season will bring a big event like past seasons, though that’s likely to be the case. Aliens have started abducting players on the battle royale island and an alien invasion is expected to be the big Season 7 theme, though Epic hasn’t provided any details yet.

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Trump tariffs on Chinese goods could cost you $120 more for notebook PCs, say Dell, HP and CTA

Dell, HP, Intel, and Microsoft warned that Trump Administration tariffs levied on Chinese imports would raise laptop prices by as much as 19 percent or $120, no matter which manufacturer made them. 

In a public comment attached to the proposed action filed Wednesday, the four companies cited a Consumer Technology Association report issued this week that said the tariffs would add about $120 to the average price of a laptop, beginning in the popular back-to-school and holiday seasons. Laptops purchased from Chinese manufacturers like Lenovo would cost 21 percent more, the CTA found. 

Apple wrote its own letter protesting the tariffs, too. 

“A price increase of that magnitude may even put laptop devices entirely out of reach for our most cost-conscious consumers,” the four companies said in the joint statement. “At best, these consumers would continue using older models that do not enable the latest security features. At worst, a price increase would force some consumers to go without laptops altogether.”

The Trump tariffs would not be paid by China or the Chinese manufacturers themselves. Instead, if U.S. consumers wanted to buy a laptop that used Chinese components—any laptop, in other words—the price of the finished product would be higher, with the resulting costs passed along to consumers.

The tariffs would likely cause consumers and small businesses to hold onto their existing laptops for even longer, impeding sales from U.S. PC makers like Dell and HP. In particular, those companies derive most of their sales from the U.S. market—30 and 32 percent from Dell and HP, respectively. Apple, which didn’t sign the letter, receives 40 percent of its revenue from U.S. customers.

Acer and Lenovo receive just 20 and 15 percent of their sales, respectively, from the U.S., the companies wrote, meaning that they would face less negative impace than their U.S. competitors.

Microsoft, Intel, and the two PC companies wrote that transitioning to alternative sources of supply weren’t possible to avoid the tariffs. In particular, the three hardware companies use equipment that is made in China, they said.

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Tech News

Google cuts fees for digital goods and services

Google revealed a new initiative this week to boost the growth power of the everyday average app developer. Starting on July 1, 2021, Google’s cutting service fees for Google Play. The Google Play fees for sales of digital goods or services will be cut to 15% for the first $1M (USD) of revenue every developer earns each year. That change will take effect starting on July 1, 2021.

Per Google’s Sameer Samat, VP, Product Management, this change will deliver a 50% reduction in fees for 99% of developers globally that sell digital goods and services with Google Play. This reduction in fees will be available to every Google Play developer “regardless of size.” No matter the dev size, the first $1M of total revenue earned each year will have its service fee set at 15%.

Given the changes in the latest Android update, previewed in the Android 12 Developer Preview, the future of android app development should be marginally better through the future. That, and the recent fervor on app store fees for app stores like Google Play and the Apple App Store should prove significant for developers of all sorts in the coming years.

It’ll be interesting to see if this change has any affect on the way Apple, Epic Games, and other app stores and developers do business. Given the rise of streaming platforms for games, will it become common business for each developer to run with whatever platform gives them the best app fee cut? Will streaming platforms allow any device to run any app, making app stores obsolete?

Take a peek at the timeline below to learn more about the recent app store wars and the way in which our collective future will unfold. Gather your strength, developers, the future will be even more strange than the past!

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