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How food manufacturers can respond to changes in consumer preferences

30 May, 2017
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How food manufacturers can respond to changes in consumer preferences

With increased media attention, particularly around health related issues and failures by suppliers regarding their control of food sources, the consumer approach to buying food has experienced a move away from the more traditional selection process, to one that encompasses new influences impacting purchasing decisions. This blog post is part of our 'ask the Expert' series and was written by Columbus Consultancy Process Practice Director, Simon Noakes.

 

Although the influence of drivers such as price, taste and convenience still play an important part in the consumer selection process, the growth of other drivers such as health and well-being, product safety, and social impact are now starting to play a key part in how a consumer makes their food choices.

This has ramifications for manufacturers who need to be able to adapt their processes and systems to keep pace with this change if they are stay competitive in the marketplace. The use of ERP technology and associated Business Intelligence is one way that manufacturers can address some of these needs.

Supply chain capability and collaboration

Many of the changing consumer drivers surround health and well-being - integral to this are the contents of the products they are consuming. Having clear to understand labelling and packaging, conveying nutritional information to the customer is one thing, as is the focus on what the product actually contains.

The increasing desire for less additives, less preservatives and more organic ingredients which have previously been introduced to preserve product life in favour of perceived ‘fresh produce’, puts pressure on delivery timelines and increases the need to improve supply chain responsiveness and collaboration to maximise on-shelf time, prior to product expiry.

The benefit of ERP for the supply chain

Being able to manage the entire supply chain through the integrated elements of an ERP system rather than through disparate systems or offline manual documents supports a more streamlined approach. This alongside a forecast demand that has been developed through collaboration with the customer ensures that not only is efficiency is improved, but also the ‘One version of the Truth!!’ can cascade quickly through the organisation to ensure that all required resources needed to support the demand are planned and managed, and any impact of changes evaluated in a short time.

>> Download transformation in the cloud for food businesses here >>

Improved enterprise resource planning software, the use of technology in the form of RFID tags and improvements to production line automation and monitoring already support efficiency improvements. The further development intelligent connectivity between devices and systems will introduce even more operational and customer benefits and create a leaner, faster and more responsive manufacturing model.

ERP also provides complete visibility of all stages which means that relevant metrics can be put in place to measure performance and areas that need focus. Also, with BI able to provide information on status and progress to the right people at the right time the necessary decisions can be taken early to ensure the customer needs are met.

ERP puts all the key building blocks in place to enable this to happen and removes the need to lots of manual intervention, and given the amount of data and the ability to now convey that data quickly and easily to people via BI in a way they can understand ensures that the key decision makers don’t have to hunt for the truth since it is there for them to see.

Trust and traceability coupled with democratization of information

Due to a number of recent cases, there is a growing mistrust amongst some consumers regarding the transparency of processing and contents of the products they are consuming. Given some of the issues reported regarding unexpected materials in products, the ability for suppliers to be able to accurately determine to source of any ingredients and its location in the supply chain is key to being able to gain consumer trust.

It is now far easier for the public to be able to find relevant information regarding products and suppliers particularly with the rapid dispersion of data via social media. Additionally, social media has helped consumers alert companies to product issues, positioning them to get out ahead of potentially reputation-ruining news. This means that Suppliers need to have robust systems and processes in place to control and avoid any negative situations with product quality which may impact Consumer confidence or mitigate the impact of them if such instances arise.

However, this level of control is more challenging in food manufacturing, particularly where there is a need to trace entire batches of ingredients.

ERP for traceability

Traceability systems in ERP connect with production, stock management and accounting systems provide a single cohesive ‘unit’, making batch tracing far easier and more visible and this coupled with real-time access to accurate information gives you the ability to make optimal business decisions fast and effectively.

Also features such as batch validation means you can certify that an element has been checked, and by scanning batches as they leave a production area you know exactly where they are within the overall cycle.

Introducing Microsoft Dynamics...

Microsoft Dynamics D365 ensures food manufacturers are able to be more granular in their traceability than ever before. They can identify where products are and isolate where and when an incident is likely to have occurred. Similarly, they can track ingredients through the supply chain with the same degree of exactness.

About Columbus

Columbus knows how to make food manufacturers more successful by adapting and implementing proven, Microsoft-based ERP solutions to maximise efficiency and overall business performance. Learn more about how Columbus can help your food manufacturing business transform by downloading our eBook here.

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