Food and beverage processors are facing enormous industry disruptions. New products and markets, new and innovative distribution channels, segmented consumers and a changing regulatory environment all work to disrupt today’s processor.
Companies trying to respond to these disruptions with outdated technology, manual work-arounds, and siloed solutions will be hard pressed to compete and succeed.
Ultra Consultants recently co-hosted a Food and Beverage Industry Outlook webinar on these very issues, joined by Food Processing Magazine editor Dave Fusaro, and Infor’s F&B technical expert Mike Edgett.
5 Webinar Takeaways
Five key takeaways emerged from the webinar:
- The effects of disruptive external trends and market forces
- The Amazon effect
- Process challenges
- Technology best practices
- Required ERP functions
1- Disruptive External Trends and Market Forces
Food and beverage processors are facing significant market forces and external trends including:
- Trust and transparency
- Big Food in search of growth
- Rise of entrepreneurial companies
- New ways of selling, new retailers
- GMO labeling
Product development issues and trends also have an impact on food and beverage processors. They are challenged to promote health and wellness via transparency of ingredients, while working with the new nutrition facts labelling. As the marketplace looks for non-GMO products, more plant-based proteins and fewer added sugars, for example, the industry must respond to these challenges.
Regulatory and compliance issues further impact food processors including new FSMA deadlines, intensified FDA investigations of manufacturing facilities or “swab-a-thons” and the impact of the Safe Food for Canadians Act.
2- The Amazon Effect
Amazon continues to shake up the world of commerce and food. In August 2017, Amazon acquired Whole Foods and it recently opened its first Amazon Go store in Seattle with its unique lack of cashiers. As they state on their website “We created the world’s most advanced shopping technology so you never have to wait in line.”
Amazon is evolving its on-line vision into one that embraces any technology that improves the ease, speed and enjoyment of commerce. How will this affect processors?
3- Process Challenges
Today’s food and beverage processor must operate cost effectively when it comes to production, compliance, food safety, product development and more. When existing technology is outdated –– with multiple standalone systems, siloed solutions with no integration, duplicate data entry processes (often manual) and obsolete reporting – processors find it hard to compete. Food and beverage industry teams need to streamline lot trace management, recipe management, document control and other mission-critical functions.
4- Technology best practices
Food and beverage companies must operate with an integrated toolset which streamlines recipe management, quality, lot track-and-trace, document control and other key functions.
We’ve found that the most successful approach is to go beyond technology selection to focus on business process improvement. Purpose-built solutions address industry-specific processes and business requirements.
5- Required ERP Functions
A few of the main functional areas that ERP solutions for food and beverage processors need to address are compliance, planning and scheduling, and forecasting.
The regulatory environment is always changing. Food and beverage companies must implement the appropriate processes and systems to not only manage recalls, but also offer the flexibility to adjust to and accommodate changing regulations and reporting requirements.
To meet strict food safety mandates, the ERP system must enable lot control and traceability, both forwards and backwards, all the way down to a container level. Food safety mandates also require advanced First Expiration, First Out (FEFO) inventory management.
Planning and Scheduling
Food and beverage manufacturers must consider multiple tasks when planning and scheduling manufacturing runs. They need to manage runs based on such constraints as allergens and coordinate production change-overs that have unique requirements (e.g., sanitizing equipment). An enterprise solution must be nimble enough to accommodate these requirements.
Food and beverage manufacturers need to integrate and automate forecasting for accurate production planning, budgeting, and the ability to meet customer demand.
Food and beverage ERP solutions must take these food/beverage related issues into consideration:
- Seasonality – The demand for certain products changes with the seasons.
- Customer forecasts – Manufacturers need to be aware of the forecast cycles of their customers to know how much of their product to produce.
Food Processing Magazine’s 17th Annual Manufacturing Outlook Survey
According to Food Processing Magazine’s 17th annual Manufacturing Outlook Survey, food processors are optimistic. The survey found 84 percent of respondents have increased production and 63 percent expect to increase capital spending.
At Ultra Consultants, our goal, for every project, is to help organizations not just select technology, but to truly transform, through optimal business performance and process improvements resulting from today’s digital technologies and platforms.
Looking for more information? Access the webinar recording.