Pepsi turns over forecast accuracy to AI

This is in tune with the increase in the digital disruption in the FMCG industry

In tune with the increase in the digital disruption in the fast-moving consumer goods (FMCG) industry, PepsiCo India has said that it has stopped conducting forecast accuracy by humans and has assigned the job to machines.

The company has a machine that uses artificial intelligence for all stock keeping units (SKUs) which are two years old for forecast accuracy. Two months ago, the company recognised that the forecast accuracy from sales, unit managers and unit planners was 67 per cent for the top 15 SKUs, while the machine it was predicting 72 per cent.

“For the last two months, we stopped forecast accuracy with humans. It is completely machine run. It is only for new innovation and new products that the marketing team predicts something,” said D Shivakumar, chairman and CEO, India Region, PepsiCo India Holdings.

He was speaking on how digitisation was disrupting the FMCG industry at the first regional management conclave organised by the All-India Management Association and Madras Management Association. This month, the forecast accuracy from the machine is 75 per cent, which nobody would ever think possible. The distributor claims are settled in three hours.

“Every aspect of the balance sheet is being disrupted,” Shivakumar added.

Earlier, PepsiCo used celebrities to promote brands based on their recent successes, now the criterion is to look at the social media following of these celebrities.