March 27, 2017

Food Industry and its “Data” Issues

Food manufacturers have a lot on their plate these days; handling Mergers & Acquisitions, managing exports and fofood Industryreign direct investment as a result of Globalization; keeping up with the advances in Technology, battling the ever growing Competition, offering “Next Best Offers” to its customers and the most important of all, keeping itself away from the wrath of FDA by adhering to Food and Safety regulations. Right from the farm to the plate, each of these trends has a significant impact. Let us examine each stage of food supply chain and its related challenges.

Procurement of Raw Materials

  • Product traceability / raw materials tracking: Food manufacturers today must provide traceability throughout the whole supply chain, not just for food safety and legislative compliance, but also to meet the increasing corporate and social responsibility expectations.
  • Procurement optimization: After M&As, certain conglomerates may acquire other companies that manufacture the same product. Each company stores this information in its own database which do not talk to each other; thereby missing various optimization opportunities like vendor, route, raw materials etc.

Food Processing

  • Attaining first-mover advantage especially during a new product introduction is crucial considering how competitive the food industry is, which means it is important to disseminate the right information about the new product quickly to its various manufacturing facilities.

Storage and DistributionDistribution

  • Shelf life management: Shelf life for food industry products is drastically less compared to other industries. So the concept of communicating the right data across various players in the logistics chain becomes crucial- starting from production facility to distributors to retailers.
  • Data discrepancies due to silo-ed information: Today, food companies are realizing that point solutions cannot adequately address underlying master data problems as they do not provide consolidated and concise product information. It can lead to discrepancies that can cause confusion, errors, logistical problems, out-of-stock problems, compliance issues, fines and thereby additional costs.

Marketing and Retail Centers

  • Branding
    • Segmented brand management: M&As can result in multiple brands for the same company. Segmented brand management among different business units can create a fragmented approach to brand management; thereby tainting a company’s brand image.
    • Brand optimization: After M&As, there may be scenarios where one company is manufacturing the product while the other is only rebranding it. So maintaining same information in multiple systems is a waste of effort.
  • Food Labeling & Recipe Management
    • Labeling errors are costly for food manufacturers, especially if a recall occurs. Publishing accurate information for brand managers, business units and value chain partners is a complex task.
    • Along with printing allergen and nutrition information on finished products, food manufactures may also print recipes on the labels. On an average, each manufacturer may have 1000s of live recipes. Every change in the ingredient requires simultaneous updates to the recipes as well.
  • Contextual Marketing
    • For food manufacturers, data is very contextual which means that for the same product, the images, recipe, details to be printed on the label (e.g. Allergen information) etc. may be different based on the geography.

Consumers and Food Services

  • Food regulations
    • Governments worldwide hold their food industries to a higher standard. Even small errors in food production can do serious damage to public health and consumer confidence. Food safety organizations mandate the information to be printed on food labels, storage conditions, shelf life, nutrient information etc.
  • Evolving consumer expectations
    • While high-quality products and services are still important, today’s consumers are accessing correct nutrition and product information to create their shopping lists and compare brands on the fly. With cross-channel retailing, a consumer’s path to purchase may start in many places making it more daunting.

What is the answer to all these problems? Master Data Management (MDM)! An MDM tool can act as a common gateway for onboarding product information and ensuring that there is only one “golden record” in the system. By being the “Master” source of data, MDM tools can ensure that there is data consistency across various channels (store, online, mobile etc.) and domains (like vendor, product, customer etc.). This solves about 70% of data related problems that food industry is facing today like procurement issues, shelf-life management, data discrepancies, branding, omni-channel retailing, reporting; to name a few. Food manufacturers can minimize the turnaround time for “pushing out a product” by taking advantage of dynamic workflows i.e. robust business rules in MDM to capture data inconsistencies and inaccuracies, so that they will only be managing the “exceptions”. This feature can dramatically reduce the speed to market thereby helping food industry players attain first-mover advantage. Since MDM tool manages data over a product’s entire lifecycle, MDM reports are capable of capturing everything about the product like its attributes, relationships, events etc. for compliance agencies. This also means that food industry players will be able to trace products from one end of the supply chain to the other in the MDM tool; thereby overcoming product traceability and material tracking challenges. “Locale”/ localization options in MDM tools can handle scenarios where the attributes to be published to various consuming systems can be altered based on the geography; making contextual marketing a breeze.

All these indicate one thing-there has never been a more crucial time to invest in MDM as the future of food industry depends on it.

Read Riversand’s case study: Manage Product, Vendor and Customer data across your brands.

Lakshmi Manmohan

By Lakshmi Manmohan

On March 27, 2017

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