Consumers are more conscious than ever of where their food comes from, how it was produced and how it’s been handled throughout its journey from farm to table. Today’s consumers are also growing more and more conscious of how their own decisions – including which brands they support – are impacting the environment. Because of this, transparency and sustainability in the food chain is adopting increasing importance for consumers.
Transparency in the food and beverage supply chain promotes accountability, trust, and sustainability. To meet those demands for transparency, food and beverage manufacturers must use technology to track where their ingredients come from, and the processes used, to build trust with both customers and consumers.
It all starts with the farmer. There is incredible potential for farmers to collect more data and then to leverage this information to improve everything from the amount of water they use to irrigate their crops to how much they charge for their products when they sell them on down the supply chain. Digital agriculture can optimise complex farming operations with data-led insights, and ERP solutions can provide insights into how to differentiate products and distribution to meet market requirements while providing traceability and transparency around food and beverage origins. Without a level of transparency right at the start, the transparency of the entire supply chain falters.
Sustainability is top of mind for consumers
The origins of the raw materials for the food and beverage industry matter because although sustainability has been at the forefront of consumers’ minds for some time, this trend is set to continue to evolve as a top priority.
In fact, according to a Nielsen Food Industry report, 65% of shoppers say they would switch from a brand they usually buy to another brand that is more transparent about its products’ origins and supply chain, including values-based information such as animal welfare and fair trade. Equally, in a recent IDC industry survey, nearly 30% of food and beverage decision-makers considered customer demand for eco-friendly products and offerings as the top factor motivating organisational change toward greater sustainability. Manufacturers are alert to the need to show where and how their goods are produced, and to share that information with their customers and stakeholders.
Technology is an enabler for the food & beverage industry
For those in the food and beverage industry, technology is the most powerful way to gain a competitive advantage. For example, automation and robotics can help improve productivity, particularly for food manufacturing businesses. Sensors and predictive analytics can improve competitiveness by reducing water and energy consumption, as well as minimising equipment downtime for manufacturers.
Manufacturers can track and trace the origins of goods in the supply chain using cloud-based services and technologies such as AI, blockchain and Industrial Internet of Things (IIoT) devices. Tools such as barcodes, QR codes, and RFID tags also play a part in providing unique identifiers for products and can be scanned at each stage of the supply chain, providing real-time information about the origin, manufacturing and handling of the products.
Food safety is also top of mind, for both consumers and food manufacturers – we’ve all seen the headlines when a food manufacturer has fallen short on food safety standards, with disastrous effects on the manufacturer’s corporate reputation and bottom line. Manufacturers can deploy IIot devices and sensors throughout the supply chain, and use the data collected from these devices to monitor and maintain the quality, safety and freshness of their products, with an ERP system providing alerts if certain safety parameters, such as temperature deviations, are breached.
Technology and digital platforms also help manufacturers communicate more effectively with the disparate elements of their supply chain. Enabling real-time sharing of information through cloud-based platforms encourages accountability and promotes collaboration across the supply chain. All these digital elements help businesses manage data in real time, increase traceability of materials, and improve compliance.
Analytics support manufacturers’ operations
With increasing numbers of IIoT devices throughout the supply chain generating massive amounts of data, manufacturers must analyze this data to derive value. By evaluating this data, patterns and trends can be identified, allowing manufacturers to respond with proactive decision-making and risk management.
Data analytics can help manufacturers identify inefficiencies, reduce waste and optimize their inventory management to maximize productivity. Improving forecasting accuracy using data analytics is another way for manufacturers to ensure that their products are responding to market needs.
Using ERP software throughout the supply chain can help manufacturers provide transparency, build more sustainable practices into the supply chain, facilitate efficient tracking and planning, and reduce food manufacturing’s carbon footprint. This enables food and beverage manufacturers to respond better to market demands while meeting the needs for traceability, with the added benefit of providing reporting tools for compliance and ESG reporting. With the right ERP solution in place, manufacturers can optimize their processes and set themselves up for successful growth and profitability.
By Mark Wilson, CEO, SYSPRO EMEA & APAC