6 Ways Food & Beverage Companies Are Winning With Digital Transformation
Updated: Apr 20, 2020
The end game for Food and Beverage producers and packagers is to optimize their manufacturing ops to strengthen their business models. More F&B creators are tailoring their products to demands directly from the consumer. As a result, they have newer channels to distribute their growing product lines to reach the foodie.
While traditional channels of distribution have still maintained a significant place in the consumption market: the direct-to-consumer distribution channel has seen a great resurgence in the recent years. In order to keep that demand organized and informing other channels of your F&B business, you cannot rely simply on low-tech solutions anymore. The speed at which people want things is changing: the way you produce should allow you to change with it.
Companies that show high YoY growth have consistently increased the amount they invest in their factories. Top priorities include connecting the factories, using data analytics, and using smarter tools to plan their capacity.
The point of doing so is ultimately increasing your savings, and the perceived value of your products to your customers. Does this help in also predicting greater year-over-year success?
But before you make up your mind, let's cover how digital transformation has made a huge impact in this industry. Now, we haven't covered every single win you can get by using smarter tools, and if you're interested in seeing if your goals can be achieved, drop us a quick message and we'd be happy to talk further.
Smarter QA Checks
Maintaining quality of products at any stage of the process helps guarantee a better quality final product and a better consumer experience. But having a human physically monitor a growing volume of products adds risk. Companies are using sensors, machines, and tech-based methods to sort, inspect, and reject unsavory products even before a human can see it. With Sensors, comes data, and with data comes the need to analyze that data to inform yourself better.
Connecting all the Hardware in all the Sites with Software
Factories have traditionally been 90% hardware. But today, factories are leveraging software to connect all their hardware to a single, central system. And this isn't just limited to sensors: companies aware of the Industry 4.0 initiative are investing in applications that allow them to do things like scheduling, and manufacturing planning. Software allows companies to connect and analyze points of data from their operations and verify the health of their systems and processes along with the value of their products.
Optimized Inventory of Perishable Goods
Cash on the shelf doesn't benefit you, your suppliers, your managers, or your consumers. Perishable inventory keeps Production Planners up at night as one of the highest and riskiest costs in Food & Beverage production. But managing inventory as a ledger of shelved-stock that isn't tied to changing demands is literally leaving money on the table... or shelf. Inventory optimization using existing and future demand is changing the way companies go about how and how much they procure and store.
Minimized Data Entry Errors
As per the 1-10-100 rule, it takes ten times the money to correct data errors later rather than earlier. That's why companies are relying on smarter tools that work across the production chain to improve the quality of their BOM, schedule, and inventory data. The problem doesn't occur when entering data for the first time, but when one set of values have to be re-entered into excel, ERP, MES, or Project Management Systems, you're introducing new sources of errors. Companies are getting rid of that risk by using platforms that are able to integrate with all these systems or are capable of doing ERP/MES/ Project Management directly.
Reducing Wasted Time & Efforts
Anything you do that doesn't directly add value or revenue to your company is a waste. These type of activities can be anything from correcting data-entry errors, time wasted in waiting for approvals or dealing with unscheduled down-time. If you collect the right kind of data, you can reduce any kinds of waste. Companies are making this their prime focus and any time spent in learning about where your company is wasting resources and time, increases your odds of reducing waste.
Check out our free E-Book on Reducing Non-Value Added Activities.
Integrating multiple points of data into single source of truth.
Instead of relying on ten different systems to do ten different things, companies are switching to solutions that are able to integrate all their sources of data, be it schedules, inventory, BOMs, or demand, into one platform. This helps reduce data entry errors, wasted time and efforts, and helps connect your factory into a singular source of truth.
I know what you're thinking; what are my gains? What does all this automation, intelligence, and data analytics get me at the end of the day?
Consumers know quality, and once they find something they like and can rely on, they don't switch. When you invest to make your factories work more intelligently, you are able to monitor the quality of your products and invest in better techniques. Companies are able to invest in more sophisticated processing techniques like High-Pressure Cold Processing among others with the goal of increasing safety, preserving nutritional value, and extending shelf-life. In the end, the consumer saves time, feels valued, and derives greater value from your products.
As I mentioned, more companies are experimenting with direct-to-customer shipping of their products and doing so while also being able to fulfill orders from distributors, restaurants, and stores extends the avenues in which you can reach your customers. Being smart about your factory allows you to be sharp about your business.
Talking gains before pains is always a bad recipe, so before we discuss gains, give us a call and talk about where in your production system you're facing the biggest problem.