Food industry under pressure
The food and beverage industry generates billions of dollars in revenue every year, but the truth is that profit margins are razor-thin, and manufacturers need every conceivable advantage to thrive in an exceptionally competitive marketplace.
Smart manufacturers seek to expand their market share by participating in the global distribution – but increasingly stringent regulatory compliance challenges can make the exportation of products an adventure in frustration.
Add consumer demands for comprehensive, accurate product information and their distrust of brands that lack transparency and clean labels and the challenges begin to stack up.
It is hard to focus on new product development and maximizing the lifecycle of an existing recipe while struggling to reconstruct fragmented data, track entry errors and search for the latest ingredient modifications of your most popular product.
Antiquated product workflow management – like spreadsheets – puts food producers at a distinct disadvantage.
In order to survive, producers must digitize – to thrive, they need a comprehensive, integrated process solution that helps them reduce costs and accelerate time to market while standardizing their product lifecycle from end-to-end.
Many manufacturers turn to enterprise resource planning, or ERP, as a solution to solve these workflow and data management issues.
ERP is just not enough
While some ERP solutions can transform specific components of business, food and beverage manufacturers cannot depend on ERP as an end-to-end process solution – that is simply not what this product was designed to do.
ERP software has value – it provides opportunities for organizations to integrate and automate back office functions – think QuickBooks or reporting. ERP simplifies purchasing, human resources, financial and distribution – mostly day to day work product and transactions – but leaves huge gaps in R&D and new recipe creation and manufacturing processes that food and beverage producers perform on a daily basis.
Imagine for a moment that you are a recipe-based food manufacturer and you produce spices, seasonings, and herbs. You use the highest quality ingredients and deliver custom products for retail and commercial use. Product quality, speed to market and food safety are your biggest challenges.
Salt, vinegar and sugar are included in the recipe for most of your products – but your ERP will not allow you to support the information required to experiment with additional flavors and spices.
Your ERP will provide all the material data for your raw ingredients, but it cannot support additional information – like, a dry rub made with organic chili peppers, or sustainably sourced oregano and garlic, gluten free meatloaf seasoning or vegan all-purpose spice mix.
No recipe management, no specific food support, no specifications, no recipe development, trials, or simulation data – just the basic materials data. So even with an expensive ERP onboard, you are back to spreadsheets.
An ERP helps plan and execute day-to-day transactions, but the software’s primary function is to follow the money.
ERP Customization versus best of breed
The phrase ‘best of breed’ comes to mind – ERP performs specialized functions well but is quite limited to its specialty. It becomes necessary to purchase – often at three times the cost – multiple systems to achieve the all the functionality required.
The intrinsic value of PLM lies in innovative cross-functionality; PLM crisscrosses the organization, from product ideation, concept, trials, simulations, manufacturing, labeling, global regulatory compliance to the finished product on the shelf.
It creates and manages a continuous flow of ideas, and intellectual property which is integrated with the necessary documents and data workflows for the entire supply chain management process.
It is literally the difference between an ‘enterprise’ and your ‘products.’
Digitizing and automating processes – like new regulatory compliance requirements in the global marketplace, gaps in data management due to spreadsheet failures, user errors in ERP and staying one step ahead of the competition are just a few of the advantages of a best in breed solution combining ERP and PLM.
PLM and ERPs play nicely together
Innovative product lifecycle management process solutions assimilate perfectly with ERP systems. PLM and master data management manages the innovation of products, enriches the data in the ERP and adds functionality.
Most organizations purchase an ERP and try to expand functionality and functions – this sometimes works to a degree, but the process will never work as well as if the functionality had been built into the solution from the beginning. Even when 75 percent of the data is compatible, the ERP cannot support variants, ingredients, statuses, nutritional values or product statuses.
Producers need a process solution that has the flexibility and capability to integrate, end-to-end and provide the transparency that will allow them to optimize and employ their data as a valuable, strategic asset.
SpecPDM is the premier PLM process solution. SpecPage customers around the world have employed PDM to create digital transformation and optimize their data, thus achieving a distinct competitive advantage over manufacturers who rely on single-solutions and excel spreadsheets to manage their product lifecycle.
To standardize processes – like new ingredients or materials sourcing and new product development – manufacturers need the specific development tools and the ability to trace issues in product management via the single source of truth that SpecPDM delivers.
First-to-market status is an exceptional benefit for SpecPDM customers. Efficiency and the elimination of errors provides essential leverage and accelerates time to market. PDM enriches the data in ERP – all the functionality, detailed data, ingredients and values – and it reduces the risk of publishing bad data that leads to noncompliance with both distributors and regulatory compliance agencies.
Even customized ERP software will not provide the benefits that organizations desperately need to achieve sustainable profitability, simply because it was not designed to carry the load alone.
However, when an innovative product lifecycle and product data management process solution is added – generally for one-third the price of the ERP – great things happen:
- Accelerated time to market
- Improved global regulatory compliance
- Reduced distributor noncompliance
- Digitized process increases revenue
- Improved product quality, reduced unit cost
- Clean label, efficient ingredients management
- Industry 4.0 responsive
Turn down the heat and release the pressure
In order to become and remain competitive, manufacturers must get from idea to product shelf as quickly and cost effectively as possible. SpecPage is the only PLM process solution that is dedicated to the food and beverage industry, available out-of-the-box on premise or in the cloud. PLM delivers transparency and traceability throughout the supply chain – creating a single source of truth for your products.
With proper training and support, integrating a PLM solution with an existing ERP can be simple and seamless. Once PLM is in place, product management – from concept to design to production, bill of materials, approved manufacturer lists and product files as well as recipe changes, ingredients lists, and formula variations are available in real-time, on-demand to authorized shareholders across the organization.