A paradox in the food processing industry

People 2020 030

In recent years, the implementation of mainstream enterprise resource planning (ERP) systems across the food industry has gained momentum with significant capital being invested in it. This shows the strong need for ERP systems within the industry to gain better control over financial and operational aspects of the business.

What often strikes me as interesting is how the industry acknowledges that investments in ERP bring value to the business, but there is still so much reluctance towards investing and implementing plant-wide manufacturing execution system (MES) solutions to control the shop floor. This reluctance extends all the way from the front to the backend of the business.  

In a fast moving industry that runs on tight margins, the need for fast and reliable information is of great importance. When you consider that raw material often represents 70-80% of the end product’s cost, it needs to be very tightly controlled and managed. Then there are aspects such as productivity, giveaway and inventories which also need strict control to be profitable.

Like a customer once told me, “The ERP system I have out of necessity, while the MES solution is what’s making the difference to my bottom line.”

More and more customers and consumers are thirsty for data, with their demands for data focused on the origin of the food and how it was handled throughout the value chain.

As younger generations enter the industry and get into managerial positions, they often assume that reliable processing data will be at hand instantly having grown up using services like Google. This means that it is imperative to have the required tools and information available if companies want to continue attracting and maintaining the talent they bring.

We are seeing early signs of the industry adapting to the digital age with MES solutions earning recognition for bringing value to businesses, which is great. But we still need urgent focus on closing the gaps in data and tools as many of these cases are significant.

The industry needs to start realizing that investing in MES solutions is just as important to their business as investing in ERP ones. They need to begin balancing their priorities if they want to improve their overall production performance, and they need to start doing so today. We have a lot of work ahead of us to catch up and stay on top of digital transformation.

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