Food and beverage businesses are well-positioned to take advantage of promising sector growth. But they must equip themselves with the right tech if they are to overcome a growing list of challenges, writes Mark Wilson, MD of Syspro.
While the rest of the country is preparing to batten down the hatches in the face of a tough economic outlook, the food and beverage (F&B) industry is poised for a promising period of growth.
In fact, it was one of the few segments within the local manufacturing industry to record positive results in 2017. According to the latest results from Statistics South Africa, the sector posted year-on-year growth of 3,5% in May last year.
And growth within the segment is expected to continue between 2017 and 2020, with property services company, JHI, predicting that sales will grow 5,6% over the coming period.
A growing list of challenges
But in order to take advantage of this growth, companies need to find ways of mitigating the increasing number of challenges facing the sector, ranging from the rapid introduction of new food product variations to growing consumer numbers, product traceability and compliance.
There is no off button
In the midst of this high-speed environment, food and beverage managers also face the relentless challenge of ensuring the constant flood of orders coming in and out are met without hitch. Missing a deadline can literally mean disaster – the kind of disaster that could result with the end customer in hospital.
It’s just one of the tough realities out of the myriad of daily challenges that SYSPRO uncovered in an F&B industry survey conducted alongside Demographica.
Indeed, F&B professionals are in a perpetual race against time. Because they work with perishables, products can easily expire, become damaged or contaminated. The importance of timing cannot be emphasised enough.
Customer demands are relentless
There is simply no room to get comfortable. Customers are demanding, and very often unforgiving, meaning managers constantly need to be innovating and bringing new ideas to the table in order to keep consumers excited about their products.
A case of constant crisis management
In fact, it quickly became clear, based on the findings from our survey, that the demands placed on food and beverage professionals are different to anyone else operating in the manufacturing industry.
Because managing food and drink products adds a much deeper layer of complexity throughout the entire supply chain process. When things happen, they happen in real time.
As one Application Manager who was surveyed pointed out, the job might as well be crisis management. And in order to ensure everything runs smoothly, F&B professionals rely heavily on their technology. Things are chaotic and managers simply can’t be at multiple distribution centres all at once, so they use technology to monitor the situation on the ground.
Tech will play an increasingly important role
In fact, increased focus on digitisation was identified as a key trend in a recent global survey of 120 F&B industry leaders.
The survey which was carried out by IT specialist, CSB-System, indicated that continued pressure on pricing across the globe would likely result in necessary cost reductions. And in order to reduce costs without compromising the quality of the product, digitisation would be looked to as the solution.
Not only did respondents see IT systems as critical to the reduction of costs, but also to the more effective management of complex operations.
This is particularly critical when it comes to optimisation of production capacity – especially considering that the utilisation of production capacity by large food product companies, showed a marginal decrease year-on-year and quarter to quarter, according to the most recent Economic Review of the Food and Beverages Industry in South Africa.
Specialised systems are key
But, one important point, which became evident through our research into the local F&B industry was that it’s important for IT systems to take into account the differing complexities of each sector and company.
ERP solutions should not be generalised according to the size of a company, but rather according to the complexity of the business in question and the nature of the industry in which it operates.
Because the future success of a food and beverage business is so closely linked to the success of the ERP system it uses, companies need to invest in holistic ERP solutions rather than packaged products.
This why Syspro has always placed such significant emphasis on where the future of ERP technology is headed and on developing its solutions accordingly.
It’s an important time for food and beverage companies, which are well-placed to take advantage of growth predictions. But, we know that in order for businesses to reach their goals, they need next-level tech solutions to help them succeed.