The hardest part of a successful digital transformation is creating a work culture that embraces change and innovation, and perhaps no company understands this better than Food and Drug Corporation (FDC).
Undertaking a root-and-branch digital overhaul, the fast-moving consumer goods (FMCG) and pharmaceutical importer, marketer and distributor has strived to meet customers’ demands, adapt to the latest international trends, and anticipate what lies ahead in the sector.
Headquartered in the Lebanese capital of Beirut, FDC’s digital transformation has been far-reaching, but before any technology could be implemented Head of IT, Bassam Baz, says that the company worked tirelessly to create a work culture which would foster innovation.
“Probably the most difficult conversation you have to have is with the shareholders because digital transformations can be expensive,” Baz says candidly.
“So, instead of saying ‘we’re going to have a digital transformation,’ I started to see the business’s needs. Then when I spoke to the shareholders and executives, I didn’t speak about technology, but I raised few questions such as 'what do the customers want from us?’, ‘how can we meet their demands?’, ‘how can we increase their satisfaction levels?’, and many other questions while putting the customer at the centre.
“Based on these needs, I put forward a business plan, supported by a digital transformation strategy, that shows the business value proposition and return on investment (ROI) out of each strategy and I explained why HR must start generating the right workplace and culture for change.
“One of our key roles as the IT department is to educate, reassure and include all employees as we embark on the transformation process,” he continues. “This ensures they are engaged and understand that digitalisation will not take over their position but will make their work easier and more productive. With this plan in place, we started seeing a cultural shift and a change in mindset throughout the company.”
Shaped by this forward-thinking culture, FDC has firmly cemented itself as one of the leading distribution companies in the country, boasting a turnover of almost $120mn dollars in the Lebanese market.
Present in three main categories – food and beverage, household and personal care, and healthcare – Baz says that the company’s core mission can be summarised by one simple statement: providing consumers with everyday quality brands.
“We act responsibly because we genuinely care about our consumers and our reputation for excellence. Therefore, we always go the extra mile to guarantee customer satisfaction at all times,” he says.
“On top of this, we have rich competencies. We have a country-wide presence, solid marketing know-how, a young, dynamic team, financial stability and uncompromising ethics. I think all of these competencies distinguish FDC from other competitors in the market today.”
In its latest effort to go the extra mile for its customers, FDC has undergone a mammoth digital transformation at all business levels. Baz believes this was needed to maintain FDC’s competitive position.
“Technology isn’t just transforming how we live and work. It’s also changing how every industry operates,” Baz observes. “We have to keep technology in mind because to compete in today’s market organisations we need to rapidly introduce new applications, optimise IT resources, control costs, and deliver the best possible customer experience.
“To be able to achieve this transformation successfully, we in IT need to start viewing ourselves as disruptors and innovators,” he continues. “At FDC, we believe we should start embracing change and taking advantage of new technologies so that we can be more proactive, flexible and remain competitive. This was the right time to take the next step and get ahead with digital disruption.”
Led by its team of 650 professionals and sustainable approach to growth, FDC has moved ahead with its forward-thinking technology strategy.
It has transformed its front-end communications and undertaken end-to-end digitisation, but one of FDC’s most cogent uses of technology has been the way it has adopted a mobile workplace approach.
Baz underlines how the firm has created a digital workplace to promote mobility which has become a common trend in the day-to-day work.
According to a survey by the Economist Intelligence Unit, respondents who described their company as a ‘pioneer’ in its use of mobile technology scored 16% better in terms of productivity than peers who described their firm’s use of mobile technology as ‘bad’.
Baz says mobility is an important facet of FDC’s sales department. Using 4G-connected commercial tablets, he noted that sales representatives can now receive real-time information to track customer financial situations, stock availability and promotions.
Additionally, these tablets are also helping to automate processes by offering a digital catalogue, appointment scheduling and analytical dashboard.
Keen to analyse and learn from its rich sales data, FDC has also explored the use of machine learning technologies.
“This has enabled the sales team to address sales trends, shortfalls, and opportunities for increased revenues, based on a predefined algorithm that looks at customers’ buying trends or last order, for example,” explains Baz. “Such smart indicators help our team to provide better recommendations to the customer, meet their needs and, most importantly, win at the shelf.”
“The Sales Force Automation (SFA) solution has also equipped the sales reps with a source of rich knowledge which has increased the customer satisfaction level, reduced the customer inquiries, created triangle of transparency between FDC and customers, accelerated the time to market, and last boosted moral by enabling the sales reps to pursue more opportunities,” he continues.
“On the other side, SFA has enabled sales supervisors to have up-to-the-minute information such as geo-tracking and productivity calls.”
Boasting a solid financial standing, it seems technology is also revolutionising all FDC functions.
“Digital transformation has changed the way employees engage with FDC through the HR self-service that enables employees to apply for leave from their mobiles, check their leave balance, examine pay slips and review performance results. This service had a realised cost savings while stepping towards an eco-friendly environment.”
Zeroing in on its operational expenditure (OPEX) rather than its capital expenditure (CAPEX), FDC also introduced standard, intuitive and sometimes off-the-shelf mobile solutions, to become more agile and reactive.
With this in mind, FDC launched a cloud software as a service (SaaS) solution for its merchandising team which empowered merchandisers to have automated processes such as planogram checking, image capturing and shelf share. Besides this, it has also enabled FDC to have online visibility in promotion execution, with an on-the-fly notification system that allows the back-office team to act rapidly if products are close to expiration or unavailable.
“Another SaaS solution we introduced is called TreasuryXpress which gives us access to a powerful and effective treasury management solution,” Baz notes. “It enables stakeholders to make critical business decisions and improve long and short-term financial operations,” he added.
Mobile technologies have proven to be an effective driver of efficiency, collaboration, flexibility and productivity.
“In our effort to empower a modern workplace, we enabled virtual meetings through Skype for Business,” Baz notes. “This meant people could join meetings from their laptops and mobile devices. This encourages collaboration across the company and reduces the cost of traditional communication tools.
“FDC also introduced OneDrive for Business which provided a place in the cloud where each employee can store and share work files, and even work on documents with others anywhere at the same time.
“We have also implemented a social network called Yammer, which we are using to share information, announcements, achievements, activities and success stories amongst FDC employees,” Baz adds. “This tool enables us to have greater interaction with our employees.”
To support this sweeping digital transformation, FDC created what Baz describes as the “one of the most powerful and scalable data centres in the Lebanese FMCG distribution industry today.
“From a technology point of view, it’s a tier 3 converged data centre which supports provisioning on demand, virtualisation, environmental management system and guarantees 99.7% of data availability,” he explains.
“On top of this, it has also enabled a fully wireless solution across FDC which allows employees to stay connected on mobile, tablet, laptop, wherever they are.”
Combining a progressive work culture with its new digital strategy, FDC has grown to become a more digitally-enabled company. However, it hasn’t lost sight of one of the key drivers of its success – it’s team.
With this in mind, Baz says that the Lebanese firm has worked diligently to attract and retain a skilled team.
“We always enrol the IT team in an annual development programme,” Baz says. “This encourages them to be more intuitive, to get more familiar with new technological tools, and remain up-to-date with the latest trends.
“We set KPIs for each team member. This practice supports employees and prepares them for succession planning.”
“The IT team also participates in the annual excellence awards to demonstrate their work and achievements,” he continues. “For example, in 2017, the IT team won the outstanding achievement award for the mobility solutions that we implemented.
“As part of our work culture, we strive to be a model employer of choice by truly caring for our employees, opening the doors to new possibilities, increasing involvement across functions and strengthening leadership capabilities by sponsoring executive education.”
With a reach extending to more than 7,000 outlets across Lebanon, FDC strives to deliver quality everyday products to its consumers, by carefully selecting its brands, rapidly adapting to trends and now undertaking a mammoth digital transformation, the company has firmly established itself as one of the nation’s leading FMCG and pharmaceutical distributors. But what lies on the road ahead?
In the short term, different technology trends will soon take over the FMCG sector. Therefore, FDC says it may explore new cutting-edge solutions like artificial intelligence, robotics and machine learning.
For example, Baz believes that artificial intelligent chatbots may be used to respond to customer questions.
In the long term, other technologies like the Internet of Things (IoT) will also be of vital value for distributor companies, offering ‘Smart Warehousing’ solutions, sensors and radio-frequency identification (RFID) tags which will enable warehouse managers to know the exact location and progress of any product at any time.
Baz says that investing in IoT technology could also increase speed and shipping accuracy and will also profoundly change logistics management. Meanwhile, blockchain technology could also evolve the supply chain operation.
Needing to be more customer-centric by retaining trust and enhancing the user experience, FMCG companies face continuous challenges today.
One important challenge arising on digitisation level is the issue of cybersecurity.
Today, the threat landscape is evolving rapidly and consequently, FDC introduced a Managed Security Service with its strategic partner Crystal Network to recognise and mitigate cyber threats through its Security Operations Centre (SOC) service.
Through this partnership, Baz says FDC also gained a seamless methodology to guarantee multi-layer security strategy, catch and repair vulnerabilities, organise staff awareness training and adopt the latest security technology whilst maintaining the optimal ROI.
Most importantly, this solution has also prepared the ground for FDC to comply with the new General Data Protection Regulation (GDPR) that is now being requested by its stakeholder partners located in Europe.
But, regardless of what is implemented, it seems FDC will remain focused on one core goal – to enhance the experience of both FDC users and its customers alike.
“At the end of the day, this digitisation strategy is to help who?” reflects Baz. “To help FDC users as well as our customers.
“Therefore, our digitisation plan has two angles. This transformation has the ability to break down functional silos and to make the company more productive, but it is also changing the way we interact with our customers and meet their demands.”