Multiyear cloud and AI agreement will focus on joint innovations across Kraft Heinz operations and product portfolio, representing one of the company’s largest technology investments to date
On Thursday, The Kraft Heinz Company (“Kraft Heinz” or the “company”) and Microsoft Corp. announced they are joining forces to develop solutions designed to accelerate the consumer goods giant’s transformation and enable a more resilient supply chain. The initiative is one of Kraft Heinz’s largest technology investments to date and a key driver of the company’s ambitious AGILE@SCALE approach.
With Microsoft Azure as its preferred cloud platform, Kraft Heinz will migrate the majority of its global datacenter assets to Azure and its enterprise resource planning (ERP) software to SAP on Azure. Through this transformation, Kraft Heinz expects to reimagine its day-to-day operations, create a more collaborative supply chain, and enhance consumer experiences by using real-time predictive analytics to improve inventory transparency and anticipate consumer and channel demand. At the same time, the efficiencies created through the adoption of digital tools from Microsoft are expected to allow the food and beverage leader to continually reinvest into its business.
Extreme pressures on end-to-end supply chains during the past two years have exposed the need for more connected and collaborative networks between suppliers, buyers, retailers and other parties along the value chain. As part of its desire to better address supply chain disruptions, Kraft Heinz is leaning heavily into a digitized approach to shift the company to a more predictive strategy and rapid response model.
“As part of our AGILE@SCALE transformation, we are building a leading tech ecosystem to benefit the entire value chain,” said Carlos Abrams-Rivera, executive vice president and president, North America, Kraft Heinz. “Our collaboration with Microsoft is a critical piece of our transformation strategy, providing us with the machine learning and advanced analytics to drive innovation and efficiencies across the supply chain so we can get products into the market faster, better serve our customers and, ultimately, deliver on the sustained and growing consumer demand our iconic brands continue to experience.”
“The past two years have highlighted the urgent need for digital-first supply chain solutions across every industry,” said Judson Althoff, executive vice president and chief commercial officer, Microsoft. “Through this collaboration, we’re working shoulder to shoulder with Kraft Heinz, applying the power of Azure, data analytics and the industrial metaverse to co-innovate and create hybrid experiences that will ultimately put goods in the hands of retailers and consumers when they need and want them.”
A primary example of how the companies will collaborate is the creation of a “Supply Chain Control Tower” for Kraft Heinz. By serving as air traffic control across the company’s full product portfolio, the Control Tower will provide real-time visibility into plant operations and automation of its supply chain distribution across Kraft Heinz’s 85 product categories. This innovation — powered by Azure’s AI, IoT and data analytics capabilities — enables the company to get its products in the hands of its more than 2,500 U.S. retailer and food service customers and millions of consumers as fast and cost-effective as possible.
Furthermore, Kraft Heinz will create “digital twins” for its 34 owned manufacturing facilities in North America to help test and perfect solutions and processes before applying them on the plant floor. For example, the technology, fueled by Azure Digital Twins, will help predict outcomes that identify optimal product capacity and reduce mechanical interruptions by proactively addressing issues before they occur, with the goal of ensuring the products that reach retail shelves and consumer hands are the highest possible quality.
Finally, as part of the collaboration, Kraft Heinz and Microsoft will create a joint Digital Innovation Office to co-engineer new solutions that will help the company reimagine digital manufacturing and drive efficiencies with the help of hybrid experiences powered by Microsoft AI, machine learning and IoT.