4 Challenges Facing the Food Manufacturing Industry
Originally published November 17, 2020. Updated July 11, 2023
Global food manufacturing is a trillion dollar industry. Innovative food manufacturing practices ensure that the world is fed without interruption and that food security is enhanced. According to projections by the United Nations Department of Economic and Social Affairs, the world's population will grow to nine billion by 2040. Research indicates that the world will need approximately 50% more food by 2050 than is now produced.
Food waste afflicts the manufacturing industry and the entire global population, and how things were done in the past isn’t enough to succeed and grow today. The food manufacturing sector must be efficient, yet, it's not simple to achieve.
There are common business pains experienced by food manufacturing companies of all sizes, and many obstacles have always existed. But, globalization means more competition. A company’s infrastructure can be the key to their success or the demise. Understanding the challenges leads to an awareness of how a company can make improvements across the organization.
Here are 4 common business pains within the food manufacturing industry:
1. Alignment of two major organizational departments
Finance (financial efficiency and profit) and Manufacturing (fast and efficient; sometimes forgetting the costs; how much quantity can we produce?) teams tackle many of the same problems, but often must arrive at their solutions differently from different sources.
CFOs must validate the investment of technology, ERPs, MES, PLCs, etc., despite the technology being an essential business tool. Without the support of technology, a company will not grow.
2. Technology challenges equal efficiency issues
Efficiency keeps a company competitive. CFOs need strategies which decrease business pains and align with technology. Workflow improvement is a challenge in many organizations. BI and Analytics can improve manufacturing concerns with the proper use of data.
Data-driven organizations can properly and quickly integrate data into the manufacturing process at all levels. Companies must consider how to stay relevant and profitable. This is done by gathering information, understanding what has worked, what hasn’t and how an outcome was achieved. Technology adoption also means staying current with the computing systems that support a successful workflow.
3. Modern consumers demand more
Consumer expectations can include product transparency, health/wellness inclusion, and innovative foods. If a product is out of stock, modern consumers expect companies to inform when supplies will restock. Just as companies expect their employees to follow workflow practices, consumers expect companies to stay relevant by implementing and utilizing technology. There are market demands for companies to maintain a level of sustainability or environmental awareness and activism. It is not acceptable for companies to simply produce units, without exerting energy into how they manage waste.
4. Adapting to supply issues/Knowledge of supply chain
Forecasting helps companies determine how to streamline their production process despite issues. Even the most planned for events and changes can be met with more challenges that were not expected.
Covid-19 has illustrated the fragility of the food supply chain from manufacturing to administrative support to transport. The unexpected nature of the pandemic forced manufacturers to utilize their internal technology resources to ensure the proper management of all levels of the production process. The pandemic created unknown variables which companies had to navigate through, likely with no precedent. Food production, a vital lifeline to citizens everywhere, must go on even during uncertain times and regardless of the logistical pressures.
The business pains of the food manufacturing industry have shifted as technology emerges and illustrates the value of implementing data-centric processes. This is where the collaboration of technology, science, and data matter.
Without these systems in place, food manufacturing companies could experience systematic failures across the organization. A BI-and-Analytics-led approach to problem-solving ensures these business pains can be combated ahead of a crisis.
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