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Ensuring digital transformation success

10 February 2020

Simon Noakes identifies five ways to use automation and artificial intelligence (AI) technologies to meet today’s challenges. 

Digital transformation doesn’t just mean food and beverage companies should acquire and deploy more and better technology. These companies can now aspire to run a digital, connected enterprise platform that links business groups, subsidiaries and the supply chain. Digitalisation can be used to enable these companies to improve consumer traceability and quality, increase recipe agility, and rebuild operations to deliver valuable innovation to customers. 

Food and beverage companies should first identify and prioritise areas of concern where they already own the data and provide insights into key performance indicators. AI tools can then be used to build the right system of engagement where customers, suppliers and employees will engage. 

Through digitalisation, enterprise systems can achieve the necessary scalability and flexibility to support growth, engage with customers throughout the product lifecycle and capitalise on new industry trends. Here are the five pain points that digital transformation will address.

1. Improved demand planning brings huge benefits to cash flow and understanding customer needs
Food manufacturers and other production companies share a common goal of needing to operate an agile demand planning function. 

The demand planning process is complex, but production companies can gain visibility into all the elements that could impact demand by consolidating and analysing vast amounts of data with new Enterprise Resource Planning (ERP) software that makes demand planning a simpler and more agile function. 

A modern ERP system, complemented by advanced analytics and data processing capabilities enable businesses to build such a platform in the cloud, and the cloud’s scalability can store endless volumes of data while allowing the platform to incorporate business activities and supply chain management. 
This greater visibility into the supply chain, managing inventory levels and accurate forecasting will not just help companies optimise cash flow but start to give companies greater understanding of customer needs – another benefit. 

2. Pricing and costing get a transformative lift into the future
Pricing and costing can also pose a challenge to food and beverage companies, but the right ERP system can help to anticipate and manage demand spikes through predictive analysis. This can also enable businesses to adjust procurements, production and distribution to meet the requirements of both retailers and customers, and ensures high product quality is maintained.

3. Don’t underestimate the value of customer satisfaction – here comes the ‘E’ word
Customers have more choice in today’s market so understanding their needs and expectations must be a high priority for food producers and distributors. So, how do you plan to keep them happy? Providing them with enhanced visibility of supplier capacity is one way. This makes it possible to centrally manage and track vendors and suppliers, their goods, locations, production conditions, and costs. Good ERP systems can now do this.

Embracing e-commerce is another effective way of improving the customer experience. A smart approach to e-commerce has the potential to accelerate efficiency throughout all business operations. Businesses need to align their internal processes to buyer demand in order to keep customers happy, and e-commerce provides the platform for this implementation. Another digital value-add that good ERP systems readily enable.

4. Ensure complete traceability – IoT is at the ready
Having complete traceability of all supplies, ingredients, materials and finished products throughout the supply chain is critical as increased responsibility is placed on food manufacturers. As a result, manufacturers require full visibility of the entire lifecycle of all products and product components, from their product production right through to the point of consumption.

Here developments in IoT cannot be overlooked. IoT helps avoid omissions and automates traceability by furnishing equipment vehicles, refrigerators and storage systems with connected sensors, and food distributors and producers are constantly on the lookout for the necessary capabilities to help businesses leverage this technology. Live data from IoT devices can be fed into the ERP system for real-time review and analysis. This data is then available in the cloud where companies can provide access to auditors, trading partners and customers with secure access to subsets of the information and reports.

5. Maintain high quality and ensure compliance
Maintaining quality and ensuring compliance is essential to build a competitive advantage and strengthen brand value. A digitally enabled ERP system offers an effective framework for tracking, changing regulations and managing compliance and quality on top of substantiating data and reports. It can also produce notifications when there’s deviation from an applicable standard compliance and provide the necessary corrective measures. These capabilities all help to provide visibility and enable companies to demonstrate they are compliant and in control of their quality management. 

When you have identified the pain points the next step should be to prepare a strategy. It is important
 to develop a timely, proactive communication strategy to support their digital transformation initiative – this should involve all company employees as well as the most important resellers and trading partners. Once digital transformation is underway, decision-makers must consider how they can ensure these initiatives remain effective and proactive. This may require companies to rebrand their business structure and implement new strategies to stay ahead of the digital transformation wave.

The optimal result for food and beverage companies is to transform into an effective, customer-focused company that achieves its business goals in the most seamless possible way. Finding the right industry expertise and resources will be crucial to ensure businesses plan digital transformation, implement it, and achieve long lasting results.

Simon Noakes is SMB Director at Columbus UK.

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