Overcoming 4 Key Food Sector Challenges with IT Innovations
How can you respond to these challenges and remain competitive?
The food sector includes a wide range of companies. However, what they all have in common is that they are very dependent on external factors, such as legislation, but also on changing consumer requirements. Flexibility is essential. By anticipating the four major challenges within the sector and deploying IT innovation, companies can remain competitive and profitable.
The unique processes within the food sector are often complex and are not easily supported in standard applications. This invariably leads to an increase in of Excel sheets and other shadow IT applications. The use of these peripheral applications leads to the creation of informational silos, increases the chance of errors, making it difficult to make the right decisions.
Frank Wester, IT manager at Koninklijke Vezet, the specialist in convenience vegetables, recognizes this: “We were faced with a fragmented application landscape with a lot of old software and legacy, in combination with shadow-IT applications and Excel sheets. This led to problems with inefficient processes, double data entry and a lack of good control information for the company.”
The four most important challenges that we often encounter within the food industry, emphasize the need for an up-to-date IT infrastructure. This infrastructure is essential to keep the chain sustainable, remain competitive and meet the continuously evolving market requirements. These are challenges in relation to traceability, production, article and inventory control and planning.
1. Traceability
Accurate food traceability is extremely important and necessary, for quality control, satisfying legislation and meeting consumer expectations. As a result of stricter regulations and liability, the requirements for products are becoming increasingly stringent. Good traceability is therefore essential. On the one hand because it must be possible to recall a product if something has gone wrong, and on the other hand to prevent more batches being recalled than is necessary. This also contributes to the optimization of the supply chain, raises the level of service and reduces costs related to guarantee processes.
2. Production
Productivity is key in the food sector. Good planning and streamlined processes are essential to be able to optimize capacity and restrict wastage to a minimum. But how do you keep control of all the various activities? Optimizing each step in the production process is a key factor.
Additionally, a correct production planning can prevent cross contamination, for example where products without allergens are produced before products with the most allergens. It also helps when producing forecasts for maximum efficiency.
3. Article and inventory control
Since the food sector works with raw materials and delivers finished goods, inventory information must be efficiently recorded. Optimizing inventory levels and rotation helps reduce wastage and improve delivery reliability.
If, for example, there is no insight into which raw materials are running low, then this can have major consequences. It is also important at the article level to have digital functionality, for example, to be able to define batches in detail when screening for allergens and guaranteeing end-to-end traceability.
4. Planning
A good planning is also essential. For purchasing, to ensure that raw materials are delivered correctly and on time so that production can run smoothly, and for sales to correctly forecast market demand. This minimizes product loss and maximizes inventory level efficiency. An effective resource planning also ensures that orders are completed on-time and a good production planning provides customers with accurate delivery times.
Accurate planning helps in anticipating changing circumstances and leads to significant savings. This especially applies to manufacturers of foodstuffs with a short shelf life, such as meat, bread, vegetables, fruit and dairy products. Your competitive position is vastly improved by ensuring that there is a well-organized and efficient planning.
Process optimization
Without one all-embracing system that can deliver the required data to evaluate performance in all operational areas, it can be difficult to clearly identify what must be adjusted or dealt with to improve operating profits. This can be achieved with an up-to-date and scalable IT system.
The effective integration of data from various sources in one system enables better decision-making, from production through to distribution. This provides insight and helps when taking action to optimize a production process or to remove a bottleneck in the warehouse. In addition, adopting innovative technologies, such as Machine Learning and Artificial Intelligence (AI) helps to increase efficiency and achieve a competitive advantage.
Aartsen, the largest international gateway for fruit and vegetables opted for Thinkwise to optimize its process. Mathijs Buzeijn, project manager for the project, says: “The implementation has enabled us to make significant improvements in efficiency. We have much more customized functionality and the new core application provides possibilities to plan ahead. Employees can now see everything in real time in the system, without interruptions. It is now also visible where the best opportunities lie. Everything is now much more focused, resulting in less waste. In the office we have a far better insight into how everything is operating from purchasing through to the settlement to the supplier. In addition, we can monitor the processes much better and answer any questions that arise from the system ourselves.”
This covers everything from increased process efficiency to improved cooperation between departments and from cost savings to scalability and a better customer experience. Opting for IT innovation impacts the entire business in respect to both the operational result and your market reputation.