3 Key Success Factors for The Food Manufacturer of The Future
We depend on the Food and Beverage Manufacturing industry to give us choice and bring to our plates innovative, quality and safe products.
The industry has seen steady growth yet is still at the mercy of rapidly increasing input costs (and higher Canadian dollar), government regulation, and cost-related tension in the supply chain. The successful food and beverage manufacturer of the future will have to focus on production efficiency, managing its supply chain, and adapting to new and changing government regulations.
A Focus on Production Efficiency
The food and beverage manufacturing industry is known for its high volume/low margin characteristics which doesn’t fit too well with rapidly increasing input costs. These manufacturers, going forward, need to revitalize processing productivity by focusing on managing input, inventory control, and decreasing waste.
Control over these cost pushers will help companies deal with consumer expectations of competitive prices, and free up funds for new products to meet their varying needs. Information systems with capabilities that deliver optimization calculations of product mix, tracking of inventory levels & cost and automated quality controls will enable companies to control costs and increase profit margins, improving production efficiency.
An Entire Supply Chain Management Approach
In the future, food and beverage manufacturers that succeed in Canada and the United States will be the ones that effectively manage relationships with both consumers and suppliers. Information sharing and systems integration with suppliers will be key, as cooperation should drive the industry forward. Business management software, like Enterprise Resource Planning (ERP), that provides controlled information access to supply chain partners can automate routine tasks, providing up-to-the-minute figures, purchasing requests, and budget control tools. These systems are designed to go beyond task automation, accumulating analytical information with every transaction that increases the potential for opportunities to find efficiencies in the supply chain.
Working closely and managing the entire supply chain will give manufacturers some wiggling room should rising costs continue to be a problem. You can’t control the world economy, but you can definitely control the value of your relationships. However, it shouldn’t stop there as the future success of the industry will depend on its ability to lead the world in supply chain innovation. While the innovation drive can largely be accomplished by investing in new technologies, it also starts from working together in a mutually beneficial partnership with suppliers. Business management software can facilitate this, but it is essential that this become part of the purchasing culture of a manufacturer.
Being Ahead of the Curve When Adapting to Government Regulation
Government regulations are a constant and critical concern for successful food manufacturers. Recent regulations like the Safe Food for Canadians Act are signalling a shift in focus on food safety from the regulatory realm to the marketplace, and it will be up to food and beverage manufacturers to ensure they are compliant and ready in case of any emergencies. Although essential for customer safety, regulations can slow down the introduction of new products and have a negative effect on the manufacturing of existing ones.
The food and beverage manufacturer of the future will have to be fast and flexible to incorporate new regulation once it comes into play. There is no substitute for keeping a close eye on regulatory developments, as these tend to signal future trends. These regulations affect all companies in the industry, leading to a small but substantial window of opportunity to adapt faster than competitors. Since the burden falls on manufacturers to ensure quality and safety, highly advanced enterprise information systems can integrate new regulations with existing business processes ensuring compliance in food processing along with managing performance and tracking inputs.
Going forward, innovations in this industry will drive the progress of societies striving to be healthy and sustainable and will play a key role in determining regional economic success, especially for top manufacturing countries like Canada and the United States.
More than ever, companies will have to be proactive in organizing and managing operations, taking advantage of all tools available to decrease the impact that external factors can have on performance. It’s an exciting time to be a part of the industry, where new technology solutions will help solve business problems and improve our society as a whole.
Speak to one of our experts to find out how we can help you propel your business forward.