How Canada’s Food and Beverage Manufacturers Can Use Digitalization to Win in a Post-Pandemic Economy
Even before the coronavirus pandemic tipped the earth’s axis, the food and beverage industry was in the midst of a transformation. Changing customer behaviors, including an interest in healthy and plant-based foods and an emphasis on sustainability, have impacted the industry for years. The pandemic accelerated these and other trends, including a return to home cooking and meal delivery. What a post-pandemic future holds for the industry is open to speculation, but one thing is certain. To compete in a post-pandemic economy, food and beverage manufacturers must embrace the advantages digital technologies (digitalization) can deliver.
Together with PwC and an industry leader utilizing Sage X3 in their food manufacturing operation, Sage recently hosted a webinar titled, “Digital Transformation: Ushering in a Post-Pandemic Future for Food Manufacturers.” During the presentation, the hosts outlined the importance of technology to the industry. They highlighted specific areas where technology and digitalization help food and beverage enterprises position themselves to take advantage of the opportunities the future has in store. Among the areas where digitalization hold the most promise for food manufacturers are:
Transparency, consistency, and quality build trust
Transparency has become a major area of focus in the food and beverage industry. Consumers are clamoring to know more about where and how their food is sourced. Regulators are demanding more traceability to ensure food safety. In response, food and beverage manufacturers need deep visibility into their supply chains, including upstream and downstream visibility. A companion to transparency is consistency. Brands that deliver consistent quality build trust with their customers and shape a positive reputation for the brand. Visibility and consistency together are the foundation for food manufacturers’ quality initiatives — and compliance mandates.
Due to the vast array of variables in their measurement, transparency, consistency, and quality are best managed and tracked with technology. Food and beverage manufacturers that have forward/backward traceability, comprehensive testing protocols, and strict quality standards are winning the business of increasingly demanding consumers and can comply with changing industry regulations more easily.
Supply chains need more agility
Volatility in both price and availability skyrocketed starting at the onset of the pandemic. For consumers, that meant difficultly finding staples such as flour and toilet tissue. Other products, like hand sanitizer and masks, quickly sold out, and price gougers moved in. Food manufacturers also felt the impact — sea container rates jumped more than 100% while road and intermodal transport costs shot up between 30% and 40%.
When food manufacturers arm themselves with more accurate sales forecasts, stronger supplier relationships, and sophisticated supply and demand planning tools, they can better optimize their supply chain, lowering costs and increasing efficiency. Smart logistics tools, including RFID, temperature sensors, autonomous picking and sorting equipment are available and already in use by innovative food and beverage manufacturers working to optimize their entire supply chain.
Insight into product costs is foundational
Accurate product costing was complicated during the pandemic by radical shifts in costs, demand, and availability, but it’s critical for survival during the recovery and beyond.
While some manufactures raised their prices during the pandemic, others found themselves needing to drop prices to retain struggling customers. With accurate insight into production costs, food and beverage manufacturers can intelligently adjust pricing as necessary. Armed with insight into their products’ actual costs, food and beverage manufacturers can also consider incorporating temporary discounts and promotions into their sales strategies to safeguard the perceived value of their products, putting the company in a stronger position as the market recovers.
A digitally savvy workforce pays dividends
As the pandemic forced some manufacturers to slow while others accelerated production, it became apparent how critical a trained and savvy workforce can be. A workplace culture that is open-minded, curious, and collaborative will attract talent with those traits. These may be primarily millenniums and Gen Zers, who combined now comprise nearly 65% of the global workforce. These individuals grew up with technology and are unlikely to work for a manufacturer that’s not utilizing technology in inventive ways. These are the workers most likely to embrace new technologies such as Artificial Intelligence (AI) and Robotic Process Automation (RPA) that are making increasing inroads in the food and beverage industry.
Just as important as winning new talent is retaining existing the existing workforce that has loyally served your enterprise and deeply understands internal operations. Manufacturers owe these workers the training required to help them become digitally savvy and the opportunity to work with new technology tools that prepare them for the future. This blend of “legacy” employees and new hires can create a unique energy that fuels innovation and collaboration throughout the enterprise.
Digitalization provides a roadmap to the future
Digitalization helps food and beverage manufacturers advance their business models to promote efficiencies, provide strategic insights, attract and retain talent, and generate new revenue and value-producing opportunities. Companies can and should approach digitalization at their own pace. Still, one strategic place to start is with a food and beverage ERP solution that provides the advanced capabilities and specialized functionality industry players need to scale and grow profitably.
Sage X3 is ERP designed for food and beverage manufacturers. Globally, more than 5,500 companies run their businesses on Sage X3, and 20% of those are in the food and beverage industry. Caron Business Solutions works with food and beverage customers to implement and optimize Sage X3 and complementary solutions, accelerating their digital transformations and creating a winning strategy for the post-pandemic economy. We’d welcome the opportunity to discuss your business challenges, and how together, we can overcome them. Call us at 877-560-5063.