Osotspa: Practical Technology Implementation for Product, Operations and Customer

Guest: Pajaree Saengcum, Head of Supply Chain & Digital Technology, Osotspa

In this episode, Khun Pajaree Saengcum, Head of Supply Chain & Digital Technology at Osotspa, shares how the company is transforming into a future-ready organization on the AIBP ASEAN B2B Growth Podcast. With a rich history, Osotspa is leveraging digital transformation to enhance its supply chain and drive innovation in the FMCG sector. Key initiatives include AI-driven consumer insights, process automation, and boosting e-commerce capabilities across their countries of operation. Osotspa is balancing traditional strengths in energy drinks with diversification into new product categories, all while navigating challenges in technology adoption and supply chain optimization.

Established in 1891, Osotospa is Thai beverage producer, with brands such as M-150 and Shark Stimulation. Osotspa is listed on the stock exchange of Thailand with a market capitalization exceeding US$ 1.9 billion (THB 69.7 billion).

Transcript

0:02

The aibp ASEAN B to B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation. You Valerie, hello and welcome to the aibp ASEAN B to B book, growth podcast, where we sit down with individuals responsible for driving growth of their businesses here in Southeast Asia. My name is Valerie, and today we have with us. Kum pajari, Singh, head of supply chain and digital technology. Ozotspar. Ozot SPA was established in 1891 at the pharmacy offering products focused on the health of the Thai people. And over time, also, Spa has continued to grow and progress creating innovative products in a fast moving consumer goods sector. Otswa was recently a winner of the 2024 ASEAN enterprise innovation awards in Thailand under the open category with their his study on how ot spa is becoming a future ready organization through digital transformation. And today, we have with us Kun pajari, who is currently head of supply chain and digital technology at osotspa, overseeing digital strategy, software development, business process improvement at the organization. So before we begin, may I invite Kun pajari to introduce yourself and your background, share a little bit with us about your current role and responsibilities at osotspar, and provide us with maybe a brief overview of also spa history for our regional and international audience. Thank you so much for having me today. So my name is paduri. I have the background from the business consultants, the technologies providers and also the system integrators, until I draw is the corporation to help them do the digital transformation. So that's a brief background of my 20 plus year of experience. My current role in the organization is to lead the supply chain, which is the core operations for the the the FMCG industry. So my journey has been in broad of the operational side and also the the digital transformations for at also Japan, I oversee the integration of the technologies across the organizations. A different role is, like you know, to specifically transform the supply chain process from end to end. And also, like you know, we not only enhance the operation efficiency and also to come with the digital technology, we also trying to empower our people in the organizations to having the right tool and make the data different decisions in every day of their operations. So a lot of work involved in transformation of the traditional process aligning with the model digital solutions, which is for me, it's about it's about driving the sustainable change and the innovation within the organization. So I'm passionate in creating more of the connected, agile business, and especially as we face the future of our industry. So I think, as the Valerie mentioned earlier, so also spa, it's over 20 to 130 years old now. So they also expand their portfolio from the pharmaceutical into the beverage, personal care, healthcare and confectionery. So in Thailand, we are the leader in beverage. So we have, like the most famous energy brand called m1 50, and their functional drink seaweed. So the company went public into the stock exchange in 2018 so this is where we positioning ourselves as the key players in both domestic and international market. So the clearly, the products, our product is available in over 30 countries worldwide, the strategies of the business is where we are focusing on the sustainable growth, investing in innovations, expanding into premium segment, and leveraging the new technologies to enhance our operational efficiencies and product development. And to myself, like you know, what I love the most about the also spy is that we are committed to the innovations, even after we are more than, you know, as injuries years old, and we continue pushing the boundaries through the digital from to the digital transformations. And we hope that, you know, the technologies will help us, you know, create. Be meaningful and value and with the quality of the products to our customer and consumer in Thailand, you know, and to the world. Thank you. Thank you very much for sharing a brief overview of the very long history of also spa. I think you mentioned a little bit about continuous innovation at the organization. So maybe just a brief overview, you know, to start off our podcast today on some of your opinions, or even what also spa is approaching with regards to developments in the consumer goods sector globally. You know, especially with the rise of direct to consumer brands and increasing focus on customer engagement. You know, how is Thailand, or even the region, different from, say, the rest of the world? And you know what, some of the strategies that are being employed? Yeah, so I think for the D to C, it's, it's a global trend, of course, especially when it's come to the online businesses. So the every businesses can, you know, go direct consumers. It's much more easy comparing to the past, where we have to go to all the traditional channels, where you know you're putting your products to the wholesalers and retailers, until your product is greetings to the consumers. You know, with the the internet eras and the E commerce and social media, so that direct to consumer, it's very favorable to the small brand. But for, I think, for especially the the market that we are in, it's, it's the favorite business. So I'm, we see a lot of like, you know, the slowly growth in the in our industry, because the beverage in Southeast Asia, it's more on the impulsive marketing between like, you know, you get your drink when you are thirsty, and you know, you see a cold drink in the refrigerator. That is where, you know, you started to acquire the drink for yourself. But when you are at home, like, you know, taking yourself, so we are not drinking as much as when we are out of home. So what is slowly, what is trying to what I'm trying to say is that the direct to consumer, it's more on the in home consumption, where the beverage i because my personal belief is in Thailand and Southeast Asia, will be more on the out of home consumptions. And I think in that case, then we are still relying a lot on the in the trade network, whether you are delivering and distribute your products to the traditional trade or modern trade, that is still necessary, on the other hand, in our categories, like home and personal care. So we see that the direct consumer, it plays a very strong emphasis on in the market terms of innovation and digital transformation initiatives. What is being done to, you know, consolidate some of these different networks, as well as to streamline your operations across the organization at osospha, okay, so for also spa, we are embarrassed by using the data, event, customer engagement strategies to our loyalty program and the digital platform, as I mentioned, our product itself, and distribute to our traditional trade network. So we sell to the wholesalers, and then the wholesaler will be, you know, lease to their to their underlying network, until it leads to the mom and pop shop, to the fridge, until the customer will get, like, you know, all the green from from the refrigerators at the mom and pop shop. So for us to, you know, getting all those data and understand how our product, it's velocities until they reach to the consumer that is very important. So we be able to collect those data to the loyalty platform to understand, you know, where and when it's our product. It's consumed, it's purchased and consumed by the today, by the end consumer, and from which from which store. So that helped me improve a lot of the consumer experience in in the locations, and also we, once we have success this in Thailand, we also expand the same business model for us to drive sales and understand the customer and consumer better in the international business as well. And that will be the key how we going to, you know, expand to the new market, saying in the new countries that we are going because we be able to collect those inside and be able to understand where we going to put the product, what is the product we should put and. So what are the price and promotions that will helping us drive ourselves in each of the locations? Okay, so interestingly, just last month, right? Also spa hosted your AI day 2024, on the world of tomorrow with AI. And you know, in line with that, maybe you can share a little bit and discuss the company's approach to, say, data analytics, and even up to AI adoption, you know, in terms of, what are some of the AIC working groups or even functions within the organization? You know, what are some of the projects that we didn't also inspire you are focusing on for for the organization, sure, so the we see the AI and data analytics is not only, you know, transforming the data different decision for the for everyone in the organization, but we think that is going to transform the way we are operate, and how we're going to make it more efficient, productive and innovative. So during the our AI day in 2024 we highlighted that the we are using AI not only to understand the customer and consumer better, as I mentioned earlier, we also focusing on using it to streamline our internal process and accelerate our product development. First, we are liberating AI to power data analytics so we gain the real time data inside to put our product and delivering our product at the right time, the right place and the right price to our customer and also consumers, based on their behavioral preference and our recent AI model that we Are showcases in our AI days, also talking about the AI model of the marketing mix model that allow us to allocate the right marketing expense and resources to drive what is, what are the most impactful driver that will be helping us increase our sales and market share. So in marketing mix. Then you can spend money on, you know, on the product pride place and promotions. And then in, I think, in FMCG business, then the last part, apart from the conceptual, it's also, it's on the marketing expense. So we have to spend that marketing expand resources intelligently in order to make the impact. And what are the crucial for for us, and definitely it's a sales and market share and for us, AI might not be just the tool, but it's also the game changers that we are putting the boundary of what is possible, allowing us to innovate faster and engage deeper, more on the consumer. So that one is the how we apply AI for in our marketing, for supply chain, is the major improvement where we are integrated our ERP system and the order to cash and process. So this one is helping us, you know, steam line, or the the product promotions until the inventory management, because we be able to understand the demand predicted the forecast, so we'll be able to lower our inventory effectively. And this one is also, you know, helping us understand the order from the customers. And we put the AI recommendation base to help our sales agents to offer what is the product mix, and also what is the recommend promotions, and also the volume, how they should, how they should use the transport vehicle to lower their transportation cost effectively. So that's in the pack of how we integrated all the supply chains and put it in our AI recommendation system for ourselves to propose to our customers for finance and accounting. We are using the AI to automate, you know, all their routine tasks. For example, like, you know, every month then our financial analyst is spending a lot of times in order to, you know, collect the data, and also, like you know, to quantify the data into the format where we are putting it in the financial reporting for our management. And they need to do a lot of the analytics in order to translate, what are the number, what are the impact, to our management, and they're taking them like, you know, very long time. But if we look at this activity, you can see that, you know, all the data are in ERP, okay, so they have their blue teams, and also the logic to conditions, the numbers and. You know, the threshold five minus five, or you know, past 5% in order to make the report, you know, and present it to the management so that that things can be done by, you know, the AI model, and with the LLM model, we also helping them during the abnormary detections, and also provide a transcript hit of if this number the driver from this lower of sale under this product. So we put all the data together and let the LLM put the humanized language to explain it to management, so that also, you know, reduce a lot of the tasks for the our financial analyst. So that might be some of the example that we are showcases in our AI, 2024 the improvements that you look at is there a time frame that you typically look at, or, you know, in terms of how fast you expect these results to come, or does it depend on the type of technology that's being employed, we have to period like, let's say, in every years, like I mentioned that we are in the process of doing Annual Plan for 2025 definitely, we have the budget, right. So in that business target of how much that net sale we wanted this year, how much growth that is alive with, the long term time we have to make this year, and also the net profit that we are expecting next year. So that was the business target that will be driving the budget, the overall, how the organization is going to spend in 2025 so that is one thing. So we have to be able to prioritize. What are the digital transformation initiative that will be helping us? You know, achieving this target number at the same time, we can manage it within the limited resource that we have been getting from, you know, annual plan. That is for the, you know, short term next year, but for the for the longer term that we need to achieve. It's more or less on the infrastructure and foundations like, you know, because we are going to adopt a lot of the AI in the near future. So the infrastructure, in terms of the data, in terms of the applications that has to be that has to be transformed in order to be able to, you know, integrate it with AI and helping us doing, do the operation better with the aisss, for example. So those infrastructure will be put it as the long term investment that will be aligned with the strategic growth. And those will be measures for taking into separate measurements. For example, you know, do we are in the milestone of adopting AI, for example, that will be measured in that area, any challenges that you face when you've come to implement new technologies, and you know, what are some areas or examples of how you've overcome some of these challenges? Okay, I think the so let's talk about, like, you know, the new, recent technologies that everyone is talking about, definitely, AI, right? So many when it comes to implementing AI, it's taking a lot of the educations to the businesses users and to understand, like, you know, what is actually what AI can do, for example, and then let them started to realize, what are the what are the problem statement? You know, if you come from the startup world, the most important is like, you know, what is your one you what is your million dollar patients? You know, if you can find what are the matter problem statement that you wanted to solve, that might be the challenges for the business user, because, for they are very probably occupied by the operations. So every day, they are facing the day to day operations in their in their day to day life. So for them to, you know, setback, and think about, you know, what is really matter, if I can solve this problem, then it will be returning, you know, with, with a better order game changer, that that challenges remain the I think the second thing is, like, you know, for the. The organizations to having the new hypothesis. Hypothesis means to me like, you know, you haven't done this kind of process before you happen. You have the you have the problem. You have used this approach to solve the problem for many years. The hypothesis is where, why don't we be able to solve it in the new method or new way, for example, so they can not think about that? I mean, those are the challenge I have encounters. And many times it's like, you know, with the propaganda of the generative AI, then we basically think that, you know, the generative AI is going to help them with every work. But as I mentioned, is it come with the expense. If the problem statement and your hypothesis is not value enough, putting the new technology in, the organization will be more burdens to in terms of the finance, more than, you know, contributing the value. So I guess that is the that is the challenges we face today in terms of, say, the technology itself, when it comes to, say, implementing, say, for example, consumer goods, you have a lot of legacy technology as well. When it comes to implementing new technology to older or existing technology. Is that an area where you face challenges, or is that easily overcome by, you know, technology tools out there for legacy system? I think it depends on each organization approach for us. Then we, we plan. I mean, we, we have a three board approach to adopt AI. One is the AI will enhance the using the apply the AI to enhance the existing applications. Second is to having the AI to power our business users, or we call it AI power agents, and third is the AI to power the operating systems. So for the question you ask is about the legacy system that we have, because when it's when the AI comes, then we also can use it as the external brain, or, you know, logic, and integrated back to the existing applications and transform it. But if we are talking about like, you know, the process to integrate with AI, I think the way we are develop the software application from now on, will be, will be changing the way we are designing the application. So I see it like, you know, in that way. Thank you very much. So it's adapting to existing ones, and then see what your existing technology needs. Then you apply the new technology to that. And with regards to some of the digital technologies that you've mentioned, right in terms of, say, earlier you mentioned, there are multiple different channels that also spa is engaged in for your consumer business as well, when it comes to implementing technology for say e commerce capabilities, or even direct to consumer channels. Is that something that is done within the organization itself, or do you partner with say your distributors for that kind of say development in consumer preferences? I put it this way, so when we are having the initiative says, Okay, we wanted to try, you know, building the E commerce capabilities, or direct to consumer, or maybe traditional trade transformation, for example. You know, we have the hypothesis, and we wanted to make sure that we be able to prove it fast. In that case, then we will see, see for the partners to come and help us. Or maybe we are. We will start off with the SAS, maybe many SAS applications. Then we are integrated them together to prove our new operating model. Whether you know this one will differentiate our E commerce or the way we are engaging with consumer differently, so that one is the tryout period. So sometimes we also build the applications with the local no code platform in order for the business user to try out the application more quickly and prove the benefit as soon as possible, and see whether, like, you know, we are on the right track meeting or the goal or not, that one also part of the the tryout, I would say, approval concept period. Once we ensure that okay, we. Already come up, or maybe matures, we have to measure process with, you know, some certain number that we can prove that we are on the right track, then we will be starting developing our own internal software, you know, because this is aligned with the key capabilities that we are identify as the digital capabilities that also Japan will be using it as their competitive advantage. What are the types of, say, maybe, data that are usually most used or most applicable to this sense, or, you know, even, what are some of the use cases that you've come across, I think, for, you know, I put it in the countries where we are expand and we are successfully apply the business there, in Southeast Asia, we see that, you know, also, Japan has very strong product qualities. Second is, like, you know, the how we are managing our sales and distributions, and also, like, you know, the way we be able to efficient our supply chain process, from, you know, planning warehouse and transportations and also manufacturing. So these three are the combination of how we are competing internationally as well. First, we have a very good product, and, you know, we can manage the cost effectively, and also, we be able to sales and distributions our product to reach to the consumer efficiently and effectively? Do you see the most practical implementation of technology, or type of technology that will be applicable or helpful for the consumer goods producing companies? I think the first definitely to me, it's manufacturing, whatever we are putting the technologies in a manufacturing process, it definitely will reflect and be able to quantify easily, because you will be increasing, for example. So whenever you are using the sensors, and you'll be able to, you know, reduce your waste scrap, for example, or increasing your production productivity. Then that that part is like, you know, for me, it's a very practical things to do, because at the end of the day, your manufacturing cost, which is the cotton Bucha, so will be the last part of the FMCG product. Then the second car would be the the warehouse and transportation, because we are selling water beverage, it's very heavy, right? So it's travel from, let's say, central locations, and, you know, expanded to, you know, the local locate in the destination location, it's required the transportations a lot so for us to manage the transportation costs effectively, and you know, warehouse management effectively, that require a very, very crucial planning Okay, so to do so then we talking about the information excellent, you know, before we are talking about the operation excellence. But for you to lift up the operation excellent to the next level, you need a lot of information still helping you planning your operations efficiently. So this is, this is the most practical things to do, because, you know, with all the data, then you can see, you can simulate, you know, if you are doing this, are you going to shortage, are your raw material is going to shortched for this, you know, demand, for example, so you'll be able to know it beforehand, and you'll be able to manage it better with the simulation on information. So I guess that is very practical of how the any FMCG can live up their operation excellence into the information excellence. Understand. Thank you very much. And I think coming to a close before we end on, end off, we'll look to look at looking forward in the next three to five years. You know, what technologies are you looking forward to implementing and testing, or you have high expectations of? I guess maybe it's it definitely is the the AI it, it doesn't mean that, you know, because the AI is recent technologies that, having, you know, a very started to pick up their advancement and applications into the organizations. But digital transformation has been talking, you know, in the in the world. Or, you know, in everywhere for almost, like, you know, 1020, years at least. So I guess more or less every organization is already started to, you know, digitize their courses and also digitalize their operating module. And that is, come, you know, where you get a lot of data into their organizations, and before data analytics is leaching, you know, very I mean, you have to spend a lot of money in order to get an advanced analytics for your companies to do better comparing to others, right? But today, the AI technology. It's a lot cheaper and a lot easier from the past. So I guess this is something that you can every organization can access to, this AI technologies to to shift their operations to the next level. So I guess maybe in the next three to five years, so we will see the way that every organization are going to do the work differently by adopting AI in every in every way. Dustin, thank you very much. And I think with that, I've come to the end, would you like to leave a last statement or word of advice for our peers out there who are looking at practical technology implementation, you know, especially in the consumer goods sector or even the manufacturing sector. Oh, I when we are talking about, like, you know, all the advanced technologies like AI and, you know, the automations in manufacturing or even warehousing, I also would like everyone to look back into their call processes. So many times the call processes, it's underlying in ERP. Okay, so what I see the trend so far, and looking at it, is that, like, you know, many times the ERP has been customized a lot. And when we talk about customized, it's been like, you know, all the data are scattered into different database, okay? And for AI to work out, then I guess maybe we should looking at our core processes within our ERP, trying to stand up guys as much as possible to have clean processes, and having, you know the data of your ERP into one system. Because what happens is, you know, every ERP technology provider is going to integrate the AI for you, and you will be able to use that AI application instantly from your own ERP. And you know, if we are not looking at it today, I think maybe you better starting looking at it, and the model will not be on premise. It's going to be on cloud. So if they are not started today, for them to chip or the ERP to cloud will be very challenging, and they will be losing their opportunities to you know, enjoy the AI capabilities that you know come with the platform. Thank you very much for this very nice closing and a piece of, I would say, advice. Kun pajari, with that, we've come to the end of our podcast today, it's very nice to hear from you, and we look forward to hearing more of the digital transformation initiatives that you are driving, as well as what also spa will be doing in the coming years. Thank you very much. Thank you. We hope you've enjoyed the episode. For more information about business growth in the ASEAN region. Please visit our website, www, dot IoT business, hyphen platform.com, you.