From "prairie cattle" to "digital cattle": Mengniu's digital transformation approach!

Introduction | In the era of industrial Internet, constantly upgrading technologies are changing more traditional industries. Relying on a variety of cutting-edge technologies, many retail and brand manufacturing companies have carried out profound explorations in digital transformation. This time, we invited Mr. Zhang Jue, CIO of Mengniu Group and Tencent Cloud TVP industry ambassador, to give us a keynote speech on "Technology Achieves Mengniu's Digital Transformation". She shared with us Mengniu's digital transformation from the perspective of business nature and business methods. Strategic thinking and practical experience of transformation.

About the Author

Zhang Jue, CIO of Mengniu Group, and Tencent Cloud TVP industry ambassador. Fully responsible for the digital construction of Mengniu Group. He graduated from University of International Business and Economics and Renmin University of China with a bachelor's degree in economics and a master's degree in business administration (MBA) respectively. He has served in COFCO Group, Reignwood Investment (China) Co., Ltd. and COFCO Information Technology Co., Ltd., and has rich experience in the field of information technology management. After joining Mengniu Group, he vigorously promoted the digital transformation of Mengniu Group, and proposed the digital construction blueprint of online channel, online consumer, online supply chain and online management. In the past two years, he has won honors such as IDC Digital Transformation Leader of the Year and WeChat WeBuild Digital Pioneer.

Since ancient times, the development of the retail industry has always been in the process of continuous innovation. After entering the digital age, the retail industry has entered a new stage of development. This sharing will analyze the following three aspects: First, explore whether and what changes have occurred in the nature of business and business methods. Second, interpret Mengniu Group's thinking and implementation measures on the strategic level of digital transformation. Finally, analyze the technological breakthrough to achieve Mengniu's business transformation path.

1. Change and Unchange: The Nature of Business and the Way of Business

First of all, let's think about a common question: when we talk about digital transformation, has the essence of the business behind it changed?

In fact, from the perspective of Mengniu Group, the essence of business has not changed, and it still hopes to sell more and sell more profitably.

The five words digital transformation cannot be called digital transformation if it is only digital construction and is promoted by a single IT department. Digital transformation must be the use of digital means and technologies to support business transformation. In the process of promoting digital transformation of Mengniu Group, the senior management team and business backbones have participated in the top-level design, and found that the essence of business has not changed, but the way of business has changed. Because of technological breakthroughs, consumer habits and the way companies reach consumers have changed.

In fact, the digital age is a consumption age without time lag. In the time dimension, consumers can access commercial services all the time; in the spatial dimension, not only physical stores, e-commerce websites, but also various channel spaces can enjoy a consistent shopping experience; in the mental dimension, not only can they meet their daily needs. , and can also meet the customized needs of special groups.

Against such a background, how to meet the time-lag-free consumption demands of consumers is a major challenge for enterprises in the digital age. Using the classic AIPL model, analyze from multiple dimensions such as knowing and understanding conversion (purchase, repurchase, sharing, retention). For example, on the public domain content platforms represented by Douyin and Xiaohongshu, the consumption of products is unknowingly placed by KOCs and KOLs in order to place an order by “growing grass” in short videos. Another example is WeChat, which uses small programs to transform into the cloud while knowing and understanding. Only by incorporating some new business actions into the touchpoints that consumers can reach can changes in business methods promote the expansion and upgrade of consumption. .

It is worth mentioning that how to build a model of "all-dimensional insight around people, goods, and markets, data-driven, and full-link empowerment" is the key to the digital transformation of enterprises. When doing brand analysis, we must analyze the demand points of different circles for different products based on people and fields in the analysis of goods, and then empower them through data insight and interpretation. HEYTEA is undoubtedly a typical representative in this regard.

2. Strategic thinking on Mengniu’s digital transformation

Although the nature of business has not changed, the way of business has changed. We have more new ways and data insight capabilities, so our business model must be transformed.

Based on this kind of thinking, Mengniu Group has formulated a digital transformation strategy in 2021. By building a new digital and intelligent infrastructure for Mengniu, it will help Mengniu change its role from traditional fast-moving consumer goods to technological fast-moving consumer goods, and realize the strategy of "rebuilding a new Mengniu". Use digitalization to lead business development, and transform from a traditional fast-moving consumer goods company to a technology fast-moving consumer goods company.

Under such a new strategy, the existing business model will be completely innovated. In terms of top-level design, it can be summarized into the following three focus directions: global consumer operations, accurate user insights and differentiated automatic marketing. and services, in-depth user operations, agile demand response and other actions. Omni-channel sales/performance capabilities, to achieve channel management transparency, BC integration, online and offline inventory. Smart supply and production require intelligent factories, end-to-end supply chain visualization, and intelligent collaboration between upstream and downstream of the supply chain.

At the same time of business transformation, it is necessary to achieve data empowerment of the entire value chain, realize the precipitation of integrated reusable capabilities, and do a good job in key nodes such as collaborative organization and cooperation. Because Mengniu has multiple SKUs such as normal temperature, low temperature, fresh milk, ice cream, cheese, etc. In the process of transformation of these businesses, it is necessary to reuse IT capabilities as much as possible, and finally achieve coordinated organizational cooperation.

Specifically, at the technical level, a key action in Mengniu's digital transformation is to create a three-in-one micro-service architecture collaboration platform for Mengniu. Through the organic combination of dealer trading platform, channel operation platform, and boundless performance platform, the productivity of the business can be maximized and data-driven and empowered business development can be realized.

In addition, we also need to take corresponding measures in key directions such as supply chain business transformation, digital transformation, and manufacturing business transformation. For Mengniu, the success of the supply chain is the success of Mengniu. We need to improve the space of the supply chain through digital means. A very perfect supply chain starts with sales forecasting. Only with accurate sales forecasts can we achieve cost reduction and efficiency enhancement from raw material procurement, production scheduling, logistics scheduling to the final warehouse and factory layout.

In terms of digital transformation and manufacturing business transformation, we need to first ensure the security of digitalization; secondly, make business data online in real time to realize the onlineization of comprehensive business data; and carry out informatization construction to realize informatization system management. Finally, there is a more critical point, which is the application of data innovation and the introduction of algorithms. To sum up, data decision-making is the core competitiveness of Mengniu as a FMCG company in the future. To this end, Mengniu Group will escort the realization of data decision-making with four major measures: data innovation and application, data governance, data operation organization and data middle platform.

3. Technological breakthroughs achieve business transformation of Mengniu

What is the difference between informatization and digitization? Can't help but think again. In fact, informatization is only a support. Initially, some integrated displays were done with numbers, which gradually played a role in reducing costs and increasing efficiency. The current digitalization is a higher-dimensional existence, which itself can help the business to generate revenue.

After moving from informatization to digitization, the functions of enterprise IT have also changed and evolved into the current dual-mode IT form. As shown in the figure below: in mode 1, do predictable work that improves and transform known areas; in mode 2, do adaptive, experimental work to solve new problems, and this is the enterprise winning digitalization The key to transformation.

For this reason, Mengniu Group changed the Information Technology Department into the Digital Science and Technology Innovation Department. The Digital Technology DT team is equivalent to a middle-office team. The core role is to accumulate more composable, reusable and iteratively upgradeable PBCs (business capabilities). Bag). In this process, the biggest role of the IT team is to sort out and decouple all business requirements to the extent that they can be assembled and combined, support the “intelligent collaboration and value co-creation” platform of assembled enterprises, and finally realize the rapid realization and maximum A degree of reuse and LEGO-style plug-and-play flexibility.

Finally, to sum up, the core equation of Mengniu's digital transformation: exponential growth high-dimensional business model = (talent density × innovation breadth × technology intensity) ^ the dimension of the business model.

For an enterprise, or for Mengniu, the key to moving from "prairie cattle" to "digital cattle" is to coordinate the above points in order to achieve success in the era of digital transformation.