THE DIGITAL LAB FOR CPG COMPANIES

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1 THE DIGITAL LAB FOR CPG COMPANIES IMPROVING OPERATIONAL EXCELLENCE, COLLABORATION AND TIME TO MARKET White Paper THE CHANGING ROLE OF INFORMATICS IN THE INNOVATIVE PRODUCT LIFECYCLE Many leading consumer packaged goods (CPG) companies have introduced innovation initiatives to launch new products faster in today s fiercely competitive and fast-paced CPG industry sector. Deploying digital lab solutions is one way they are transforming innovation and efficiency, especially as routine, paper-based data management becomes too costly and time-consuming for effective product development. As products move from discovery and development to manufacturing and commercial operations, CPG organizations are investing in the latest tools and technology to improve insight, accelerate innovation, reduce costs, and speed time to market. Faster innovation with digital solutions is a direct result of greater productivity in the lab, as formulators spend less time on documentation and leverage existing experimental data to make better decisions.

2 The drive to go paperless is a strategic initiative that offers demonstrable operational benefits along the entire research-development-manufacturing continuum. For example, detailed cataloging of formulation testing enables researchers to speed innovation by quickly moving away from ideas that have already been tested or found to be less feasible than others. While it seems logical to check previous work to see what has been tested and what has (or hasn t) worked, the reality is that CPG labs employing paper-based solutions spend an enormous amount of time searching paper notebooks for previous test results. In fact, scientists often repeat experiments unnecessarily rather than taking the time to find existing dark data within their organization. In fact, up to 90% of experiments are avoidable and 85% of experimental data is only used once. The wasted time and effort expended on repeated experiments can interfere with an organization s ability to explore and fully leverage the latest market research on consumer trends and preferences. While this example focuses on the early stages of product development, enterprise-wide data management and exchange is essential throughout the product lifecycle. Implementing an Electronic Lab Notebook (ELN) is the first step in deploying a digital lab for CPG manufacturers. However, the impact of today s digital environment goes well beyond the ELN. Digitalization improves Scientific Product Lifecycle Management by delivering a technology infrastructure capable of integrating and automating critical processes required to capture and share scientific information across the product lifecycle. This environment requires a scientifically-aware informatics foundation that harmonizes core capabilities with existing systems and information sources speeding innovation to market. By institutionalizing flexible, data-driven processes, the Digital Lab contributes to the overall business goals of a CPG organization, improving competitiveness and innovation while reducing time to market MARKETING R & D FORMULATION SCALE UP PRODUCTION Product Spec Technology Decisions about Process Implementation Raw materials The Role of Information in the Formulation Development Process Ingredient Levels Performance Existing Mixing Procedure Process Type Local Infrastrudture Appearance New Stabiliy Equipment Distribution Cost Robustness Capacity Suppliers Shelf Life Customer Support Dosage Regional Variants Energy Costs Sales Volume Regulatory Issues INDUSTRY CHALLENGES TODAY Today s science- and process-based CPG organizations need to improve product quality, productivity and compliance while at the same time speeding innovation, collaboration and decision making to shorten time to market. These challenges are compounded by rapidly changing consumer preferences, increased competitive response (discounting, or even product re-launches with new packaging), supply chain pricing volatility, raw material shortages, sustainability initiatives and increasingly complex regulatory requirements. Changing product features and consumption patterns in new, emerging markets further complicate the situation. With short product lifecycles and many new products failing to meet projected sales and market share goals, CPG organizations must accelerate the pace and quality of innovation for long-term success. As a result, they are re-evaluating the entire product lifecycle from research through development to manufacturing and are adopting advanced information technology (IT) systems capable of supporting today s dynamic business ecosystem.

3 THE DATA DIVIDE IN CPG The first step in transforming the product lifecycle process is harmonizing the many disconnected data streams flowing through R&D networks, especially within Formulations Development. This first step needs to leverage data from departments across the product value chain: performance specifications and cost requirements from Marketing, new technologies from Research, process types and capacities from Manufacturing, and supply chain and distribution methods from Operations. Keeping track of all this information overwhelms traditional manual and paper-based processes, negatively impacting the productivity of Formulations teams. Faced with this data overload, many Formulations teams have taken an empirical approach to research that relies heavily on the experience of senior staff. However, when this internal knowledge is captured in a paper-based environment, the knowledge and expertise disappears when senior staff retires. The complexities of Formulations Development further compound the inefficiencies within many CPG R&D organizations. Consider the design of a recipe for a new mayonnaise with many regional variants (e.g., spicy vs. mild, egg-based vs. vegan or spreadable vs. squeezable). Since the new product will be manufactured and distributed across a range of geographies with different manufacturing capabilities and numerous local suppliers, the Formulations team will need to develop multiple related recipes. The current state of data management in CPG will require this Formulations team to design multiple products from scratch instead of efficiently building off the work of others in a collaborative, innovation-driven environment. ENABLING SCIENTIFIC PRODUCT LIFECYCLE MANAGEMENT A unified scientific informatics environment facilitates and optimizes data management throughout the Product Lifecycle Management process from R&D through manufacturing to commercialization. Many companies patch together disparate IT systems to satisfy this requirement, but this scatter-shot approach usually results in interminable custom-coding, high total cost of ownership and numerous validation/compliance shortcomings. Replacing legacy point solutions with a unified environment for scientific information management allows organizations to capture, manage and share R&D, chemistry, manufacturing and quality data in an all-electronic environment. This unified informatics approach to Scientific Product Lifecycle Management significantly advances operational excellence across global business networks. THE DIGITAL LAB Over the last few decades, the need for precise control of production processes and cost savings has driven many automation initiatives in the CPG industry. Typical Supervisory Control and Data Acquisition (SCADA) and Manufacturing Execution System (MES) implementations are examples of such automation. The development and early manufacturing stages of new products also offer opportunities to reduce costs and improve efficiency. Digital Lab initiatives involve many criticalpath issues that, when resolved, can yield significant operational improvements. As scientific documentation moves from research through development to commercialization, the fundamental informatics requirements change dramatically evolving from a free-form, open structure during initial product ideation, through a more structured (but flexible) experimental set for optimization, to a rigid SOP-based method execution platform for quality control in manufacturing. In this lifecycle, there is a need to rapidly acquire and share scientific insights across the continuum from lab to manufacturing. With a view to positively impacting productivity, collaboration and time-to-market, ELN capabilities in documenting the execution of lab processes enable the Digital Lab to significantly improve several key capabilities including: Executing and documenting experiments, methods, procedures and tasks Storing, sharing and protecting lab data and results Managing chemicals, materials, equipment, personnel and related processes Developing, adapting and managing recipes generated throughout the product lifecycle

4 SCIENTIFIC DATA-DRIVEN DECISION MAKING Product research, development and manufacturing organizations need to manage lab data effectively if scientists are to extract full value for decision-making and innovation. This applies to operational reporting and release processes as well as data mining, trending and feedback into product development processes and initiatives. A common technology and informatics environment streamlines data access and reporting across the enterprise by providing a unified view of underlying data and a standard process for extracting, transforming and loading data using a common data structure and format. Querying and reporting components can be exposed as web services, enabling multiple applications and mobile devices to access and display information in a manner most appropriate for various corporate stakeholders. Business rules and quality checks can be built into re-usable components to ensure that data complies with necessary standards as it moves through the organization. This single environment is essential for interrelated data mining and query activities extending from upstream R&D to downstream regulatory submissions. The ELN-based Digital Lab is especially beneficial for formulators. Capturing experiments and data within a unified ELN provides access to historical data, allowing scientists to build on their colleagues work and expertise by easily searching for prior experiments and data to supplement their own experiments. As a result, teams can leverage common recipes and make incremental changes to optimize variations based on changing specifications, regional suppliers and manufacturing capabilities as opposed to designing each recipe from scratch. At the manager level, the ELN makes it possible to quickly review the division of labor in collaborative experiments and assign new tasks based on a clear understanding of lab priorities and utilization. Additionally, standardized experimental processes and data entry gives scientists a common language for communicating and interpreting data from across the organization. This unified environment minimizes unused dark data and needlessly repeated experiments, streamlining the R&D network so that scientists can develop new products faster than ever before. Digital Lab capabilities extend to other corners of the lab as well. For example, a chemical inventory management system allows scientists to see what materials are available and request them as needed from within their ELN. Likewise, stockroom managers can simplify inventory management with real-time updates on stored substances including amounts, expiration dates, locations and changes in safety data. They can order new materials only when needed reducing inventory, lowering costs and creating a safer and more sustainable enterprise overall. The Digital Lab does much more than just digitalize existing workflows; it can be a powerful force for transformation within CPG R&D. Capturing scientific data within a common technology framework makes it easier to apply cutting-edge technologies like 3D modeling/simulation and predictive analytics. Teams can virtually design products and optimize formulations by screening for the best combinations, fostering a culture of iterative innovation that reduces development costs and shortens time to market.

5 BENEFITS OF THE DIGITAL LAB The Digital Lab for CPG eliminates paper processes within research, development, analytical and quality labs, while also streamlining end-to-end analytical and process workflows. The Digital Lab supports: Collaborative and innovative research Early and agile development Optimization and validation of analytical methods High-throughput, compliant execution of sample analysis in regulated and non-regulated labs Common standards between systems ensure rapid transfer of data, information and parameters and provide new opportunities for data mining, analytics and visualization. A common foundation based on these standards assists scientists in designing, developing, deploying and delivering critical tasks from upstream R&D to downstream quality and manufacturing operations. CLOSING THE GAP BETWEEN INNOVATION AND COMMERCIALIZATION Faced with revenue erosion resulting from increased competition and shorter product lifetimes, CPG organizations are looking for new ways to drive innovation, improve operational excellence and control costs. For decades, most data has been paper-based, requiring numerous non-valueadded checks to ensure end-to-end data integrity and quality from product development through commercialization. These legacy paper-based systems are becoming even more difficult to manage as CPG companies expand their global reach. Today s technology can replace paper systems with efficient electronic environments supporting innovation to market. The Digital Lab s informatics environment supports quick technology transfer of robust, automated test methods to quality operations and process parameters to manufacturing facilities. When a product goes into full commercial production, the Digital Lab also enables recursive data access supporting continuous product/process improvements. With the Digital Lab, companies can adopt an informatics approach that effectively connects innovation and commercialization cycles with high-fidelity data that retains contextual information as projects move from R&D to manufacturing. Scientific Product Lifecycle Management supports this approach with a comprehensive, scientifically-aware informatics environment that captures and harmonizes data along the end-to-end product lifecycle. By bridging the innovation and productivity gaps in research, development, manufacturing and quality, and enabling successful technology transfer across new product development and production operations, the Digital Lab supports: Enhanced productivity through integration and streamlined workflows Better collaboration within globalized R&D and across dispersed teams through easy data access and standardization Informed decisions through optimized experimentation and sample processing with realtime results Faster time to market through shorter cycle times and reduced latencies between cycles Improved compliance through automated data transfer and support of process execution and reporting

6 CURRENT STATE - PAPER LAB Slow pace of innovation Lab work too slow and projects are difficult to track FUTURE STATE - DIGITAL LAB Faster innovation and time to market Shorter project completion times Repeat experiments due to lost data and inconsistent test procedures Slow, manual documentation Data trapped in notebooks and difficult to share WHY MOVE TO A DIGITAL LAB? In summary, paper-based CPG labs are inefficient because data is siloed on bookshelves, experiments are needlessly repeated and information cannot be shared. As a result, innovation slows to a crawl. The digital CPG lab accelerates innovation by reducing unnecessary task, improving data access and facilitating collaborative data sharing. CPG organizations have reported qualifying breakthrough innovations in half the time, with improved metrics in many underlying tasks supporting faster innovation and productivity including: As much as 25% faster project completion Up to 40% reduction in time spent recording information Up to 95% faster data aggregation A 20% improvement in formulations innovation Over 20% reduction in raw material usage Reusable data Less time on documentation Easily collaborate and share across sites and locations Our 3DEXPERIENCE platform powers our brand applications, serving 12 industries, and provides a rich portfolio of industry solution experiences. Dassault Systèmes, the 3DEXPERIENCE Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 190,000 customers of all sizes in all industries in more than 140 countries. For more information, visit Dassault Systèmes. All rights reserved. 3DEXPERIENCE, the Compass icon and the 3DS logo, CATIA, SOLIDWORKS, ENOVIA, DELMIA, SIMULIA, GEOVIA, EXALEAD, 3D VIA, 3DSWYM, BIOVIA, NETVIBES, and 3DEXCITE are commercial trademarks or registered trademarks of Dassault Systèmes or its subsidiaries in the U.S. and/or other countries. All other trademarks are owned by their respective owners. Use of any Dassault Systèmes or its subsidiaries trademarks is subject to their express written approval. Dassault Systèmes Corporate Dassault Systèmes 175 Wyman Street Waltham, Massachusetts USA BIOVIA Corporate Americas BIOVIA 5005 Wateridge Vista Drive, San Diego, CA USA BIOVIA Corporate Europe BIOVIA 334 Cambridge Science Park, Cambridge CB4 0WN England WP