Changing global weather patterns, evolving consumer tastes, health and safety, and emerging opportunities in international markets have made the past 12 months a period of constant change for companies in the Australian food industry.
Many are realising that, to maintain profitability, existing product ranges and production techniques need to evolve. Approaches that might have worked well for years are now no longer as effective.
Shifts in broader society are also making a difference. Where and when people are eating is evolving along with the styles of foods they are consuming. Changes such as these have implications for everyone, from farmers and producers to retailers and fast-food companies.
Supply chains in the industry have grown increasingly complex, creating new challenges. Problems at any stage can make it impossible to ensure produce is delivered to end customers in a timely and cost-effective manner. It is therefore critical today to link everyone in the supply chains – from primary producers to processors, manufacturers, transportation and retailers.
As a result of these factors, the hunt is on for ways to improve current processes while at the same time keeping production expenses under control. Around the country, food producers are examining their internal operations in an effort to identify areas in which changes could deliver bottom-line benefits.
Reviewing the role of technology
It is no surprise that applying technology is a big part of that solution, not just to automate operations but to underpin the entire running of the business in order to better manage complex supply chains and associated risk. As a result, many food producers and distributors are looking to fully integrated Enterprise Resource Planning (ERP) software solutions to bring together not just every aspect of the supply chain but all associated areas of the business.
There are many areas where the latest in ERP technology will play a huge role in helping to revolutionise the food and beverage industry. Offering business intelligence as a support to human intelligence when and where they need it, in a manner they can best work with, increases in accuracy to perform functions like stock costing, automation
ERP software should also allow the automation of many tasks, such as payments, replenishment and attachment of health and safety documents that previously were handled manually and stored separately. Examples include the production of recurrent orders and invoices, the creation of month-end reports, and payroll runs. Not only is this more accurate and reduces human error, but it can slash the time it takes to deliver these highly repetitive tasks, not to mention the stacks of paperwork it saves.
In addition to managing processes, an ERP system provides insight into how your business is operating. It offers not just reporting but real business intelligence (BI) which forms the basis of strategic decision making and forward planning. To ensure success BI needs to be looked at in terms of the people who use it, such as key staff and managers, to deliver operational intelligence. If done correctly providing access to the best possible information, at the right time, will support employees in making strong business decisions and promote flexibility to potentially take advantage of the industry’s fast-moving taste changes and trends.
Enabling staff with the right tools can profoundly influence a firm for the better. ERP systems can equip staff with an easy-to-use dashboard, displaying accurate live information, such as stock levels or order status, so any changes in circumstances can be responded to in real time. Warehouse staff can also have full visibility into product expiry or best-before dates, allowing smart decisions to be made based on anticipated shelf life, thus minimising wastage costs. In other circumstances, ERP can furnish the ability to quickly identify and pick according to serial or lot numbers.
Business information not only needs to be responsive; it has to be accessible regardless of where in an organisation someone is working – from taking a customer order in the field, to picking it in the warehouse or managing procurement from head office. Everyone with a role at any stage of the supply chain requires the information in a form relevant to the job they’re doing. In fact this is true across the entire organisation. Sales managers need access to detailed sales data to highlight changes in customer demand. Operational managers on the other hand should be able to readily compile and access overview reports that show the state of the business, not just at a high level but with the ability to drill down to meaningful data that they can act on.
The majority of firms in this industry require a system capable of accurate stock costing, particularly when dealing with imported items, as no two shipments of the same item can be treated the same. Not only are you dealing with the vagaries of import or custom duties, but shifting exchange rates and freight costs also come into play. Documentation needs to be attached easily to each shipment, producing a line of transparency and accountability which can be tracked if needed.
All these factors have a profound impact from a financial perspective. A greater level of understanding helps you to better manage margins and cashflow, particularly if this is often tight. Good ERP software gathers data right across the organisation to help answer difficult questions such as what resources are required, what price margins should be set and where your profit is actually coming from. It is all part of the integrated engine needed to run a business today. Controlling customer payment cycles can make or break any distribution business and keeping your finger accurately on the business pulse is essential when you’re dealing with hundreds, if not thousands, of suppliers, customers and products.
Therefore combining all this automation with your existing capable human intelligence, ERP software can now provide a high degree of artificial intelligence that should help to ensure competitive advantage is maintained.
Matching technology to your business
Selecting the right technology is paramount for going forward to stabilise and achieve any company aims for growth. ERP software can be likened to the “engine room of business” and carries with it a great deal of influence on the success of your firm. Therefore extensive research is essential prior to the purchase and implementation of new hardware or software.
Once technology is selected and implemented a review process should be completed to determine with some certainty whether the original aims have been met. If not, a resolution path should be mapped. This step is arguably the most important area to ensure the success of your project through the cohesion of new technology, actual business requirements, and delivered benefits. Be mindful that a new software package might be a fantastic product, but if it doesn't meet the specific needs and aims of the business, any investment will be wasted so completing this analysis up-front will prevent that from being the case.
Just as any good restaurant should expect to be critically reviewed, so should a good software product. It should withstand scrutiny and be able to keep pace with market changes along the way, not just when it ‘opens its doors’. Good business software is to business what good food is to people – without it, they cannot thrive.
Anna Rizio is the Sales and Consulting Director at Endeavour Solutions.