Understanding the big picture ROI factor
CEOs are traditional big-picture thinkers; they may not be as focused on innovative digital technologies as their front-line employees who struggle to innovate while using disjointed, out-of-date technology.
An expanding gulf between many front-line employees and the C-suite in the recipe-based food and beverage industry makes it nearly impossible for lower-level decision makers to advocate for the technologies they know will improve the lives of employees and customers – while expanding the market share of the organization.
Product Lifecycle Management: Learn how to drive innovation, reduce costs and risks and eventually gain a competitive advantage.
Employees outside of the C-suite have first-hand knowledge of their company operations – they are the experts, thus qualified to speak to technological needs of the company.
Food engineers, quality control managers, research and development teams and departmental leaders see immense value in product lifecycle management solutions, but quite often, C-suiters are preoccupied with higher level issues and may not realize the value of surveying the entire landscape for technological solutions that offer longer-term tangible benefits.
The key, when trying to convince C-suites to recognize the need for innovative process solutions, is to focus on overall ROI.
Speaking the right language
Regardless of department or title, all employees share the same goal – a thriving and sustainable business. But not everyone is on the same path to achieving that goal.
Employees who first recognize the value in PLM usually work with information, technology or manufacturing personnel. The tech vanguard understands the importance of improving traceability and transparency standards, which makes investing in seamless, end-to-end, data technology processes the obvious choice to achieve greater success.
The C-suite is focused primarily on the wide-angle view – operations, quality assurance, sales, accounts payable and purchasing, not to mention overall business strategies, development, budget and capital oversight.
Recent research indicates that global CEOs, CTOs and CFOs feel immense pressure to create business models that can keep up with disruptive technology trends. But what’s most telling is that less than 10 percent of CEOs are “extremely satisfied” with their organization’s current innovation capabilities. CEOs consistently report that they are interested in change, especially technology-driven growth.
However, company leaders in the margin-sensitive food and beverage industry are also very concerned about the return on those investments (ROI). That means that to turn C-suite skeptics into PLM advocates, you must present a strategic, realistic ROI case for an innovative process solution.
ROI for PLM solutions
To secure executive support for new technology investments, it is imperative to understand and be able to provide a detailed explanation of how PLM solutions create ROI.
An ROI calculator is an exceptionally powerful tool to illustrate tangible benefits and overall value to a skeptical c-suite. ROI calculators can jumpstart technology plans in organizations that may be initially resistant to change.
PLM investments can easily be linked to both immediate and long-term ROI:
- Immediate ROIMembers of the C-suite are responsible for pushing forward growth. To them, that means generating revenue, earning customer loyalty and reducing process costs throughout the entire supply chain.PLM solutions offer all of these benefits – and more – for rapid product rollout. Consumer focus has shifted, most shoppers care about more than just low prices and geographic conveniences – they also have heightened expectations for accurate, comprehensive product information, labels as a single source of truth, and more.Data-driven PLM solutions ensure products always have the up-to-date information shoppers demand. For brands, this is a huge opportunity to generate long-term loyalty. In fact, 94 percent of consumers are more likely to be loyal to a brand that offers full product transparency. This is especially important to food and beverage manufacturers, where brand loyalty extends across product categories.
PLM process solutions also help recipe-based food and beverage manufacturers pivot quickly, meeting the C-suite’s goal of reducing costs and remaining nimble.
Label certifications can be extremely fluid, and they impact most product lines. If manufacturers do not follow changes along the supply chain, they may miss an error in labeling, design or IT. This can result in regulatory compliance issues, recalls or, even worse, illness for consumers. But housing all product information in an end-to-end PLM system makes it easy to reflect changes in derivative products and benefit from quality assurance.
- Long-term ROI
No one has a more in-depth understanding of downtime than the C-suite. Every minute that a manufacturer cannot produce products means millions of dollars lost.
For example, in case of a cross contamination recall, the responsible manufacturer must shut down until the defective ingredients are located and the issue is resolved. In addition to the missed revenue during this time, the business also suffers tremendous damage in lost consumer trust and loyalty.
Fortunately, a PLM system provides an analytical, data-driven process that allows manufacturers to trace products back throughout their entire lifecycle. This makes it easier to pinpoint where production errors occurred. After a recall, access to such specific information helps recipe-based food and beverage manufacturers comply with regulatory agencies, resolve the contamination issues and resume safe product production.
PLM process solutions empower brands to use their data as a strategic asset. PLM technologies build comprehensive, accurate data reports that manufacturers can trust, with on-premise, SaaS and cloud-based technology.
SpecPage suite of process solution makes it possible to spot data trends across geographies and rapidly act on them – leading to new product innovations and enhanced revenue. This helps the R&D team and food engineers who work with multiple recipe trials to avoid making the same production errors twice, eliminating lost time and materials and boosting ROI. Unlike many technologies where value decreases with time and age, PLM solutions offer food and beverage manufacturers powerful, tangible, long-term benefits.