Digitization and automation are key to surviving and thriving in today’s globalized beverage industry. By transforming your business, you can save money, improve flexibility, and satisfy your customers. Below are four solutions I would like to share with you.
If you had asked me back in January what I thought the most important topics in the beverage industry would be in 2020, I'd have had a hard time giving a straight answer. Today, the topics relevant to the beverage industry are virtually predetermined. As corona has shown us, digitization and automation are essential to survive and thrive in a globalized market. The faster you push the digital transformation, the better. Here are four inspiring solutions for your beverage company.
Digital optimization in production: flexibly respond to consumer demands
Business management models and theories may change, but there is one phrase that is set in stone: “The customer is always right”. And the customers’ demands for flexibility of the manufacturers are continually growing. If you cannot reduce the changeover times in production to a minimum, you will lose your shares in the global market. And suffer the same fate as the companies that cannot meet the diverse picking requirements – the catchphrase is “alteration of units produced”.
To turn these challenges into a real opportunity, production, coverage planning and inventory management must be in perfect harmony - a complex task that can be handled by modern ERP systems and their data management capabilities. Automation is another catchword, and I am not only thinking of full-scale automation of entire production facilities. All you need is a wireless infrastructure implemented in your warehouse. Add hand-held devices to boost picking efficiency, or integrate depalletizers to stage sales orders and display pallets according to your customers’ wishes. For many companies this has meant an increase in overall labor effectiveness and substantial reductions in picking times.
Traceability of processes and products: fighting against food fraud
Time and again, fraud in the food industry has hit the headlines. Besides olive oil, they primarily affect fruit juices, wine, coffee, and tea.
In order to protect the consumers, it is important to bring fruit growers, processing and filling companies, and retailers together, and to ensure a transparent supply chain with seamless traceability. An IFS (International Food Standards) certificate signifies that appropriate control mechanisms have been implemented in the business process. For the manufacturer, but also for the marketer, this means they have to collect, and be able to access, data in every sub-process. The necessary conditions for this are created by an ERP system with tightly integrated data collection, beginning with the growing of the raw materials and finishing at the point of sale. Since the relevant documentation of all processes is provided by ERP, certification should no longer be a concern. Speaking of traceability: we at CSB rely on future technology. We are currently looking into utilizing blockchains to validate data integrity within the value creation process - and there are good reasons to do so.
Recipe optimization: better use of scarce resources
Looking at the raw materials, we see that adverse climatic events like spring frost or prolonged drought in recent years have caused an upward surge in prices due to substantial losses in the fruit and wine production. The booming gin trade has caused a shortage of juniper and other botanicals. Also hop was repeatedly in short supply due to the craft beer trend and the growing demand for the raw material in the beer industry. When the optimal use of resources is becoming increasingly important, systems for optimizing the recipes come into play. They safeguard the economically balanced supply of all raw materials to semi-finished and finished products at any time within the process. This also applies to the labor production factor. Define today for your entire staff the work steps that have to be completed, and incorporate this information into your overall economic calculation. The result is a seamless contribution margin calculation that allows you to keep costs under control at all times.
CRM, EDI, BI: acronyms for success in grocery retail
B2B, CPU, EOD, KPI, ROI, ... Corporate jargon is full of frequently used abbreviations - and CRM, EDI and BI should definitely not be missing in your list as they refer to software systems that make the work of business managers easier and that help to speed up complex decision-making processes. Suppose you are a manufacturer of gin or craft beer and, after a successful start-up phase, you would like to sell your products to food retailers. As margins are getting smaller and requirements are ever increasing, you should know your processes and key performance indicators inside out. Business Intelligence, or BI, facilitates the collection, analysis, and presentation of data. You can easily identify where there is still potential and where things are getting tight. Once you have found your spot market, and your first delivery is bound to be shipped, it will quickly be clear who has the upper hand.
Nearly all major grocery chains use standardized master data and require their vendors to adhere to these structures. These are the expectations you will have to take into consideration. When you are ready to ship your gin or your beer, you will be facing a wave of format requirements concerning item master data as well as vendor data. If you fail to prepare your data accordingly, the data maintenance will cost you time and money. For each and every delivery. Electronic data exchange via EDI supersedes this tedious work and provides your buyer with all relevant data - fast and in a standardized format. As a result, you will save time, but also a lot of money with every single delivery.
ERP as the basis for digitization in the beverage industry
I like to compare digitization with a road map. All roads lead to Rome, but the road map of our digital era is ever more divided, covering broad areas. It is therefore all the more important to have a navigation system that guides you safely towards digitization. As I see it, this can only be accomplished by an ERP system, because this is the basis for many digitization processes. Many beverage companies have already made big steps in this direction. Fruit juice manufacturer Beckers bester, for example, is currently linking its systems with the ERP program. So the Smart Factory is also coming to the beverage industry.