Answers to the mix of challenges in the food & beverage sector
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Chiel Spruit |
The food market has always been characterized as dynamic, but in recent months the challenges are increasing by the day. Just think of unpredictable supply chains and explosively rising energy costs. Nevertheless, shareholders want to see a clear growth in both turnover and profit. How can the industry respond to this smartly? Siemens has answers to the challenges of our time, says Chiel Spruit, manager at Siemens Digital Industries Software.
The world is currently suffering from shortages of available raw materials and energy, which is causing prices to rise to record highs. This means, for example, that food products sometimes have a higher cost price than the original sales price. Supermarket chains are also not always prepared to pay more during a contract period. And consumers are becoming increasingly critical, which means that a wider range of new products is needed. These are just a few developments that are causing headaches for food producers.
Chiel Spruit also sees that picture: “Food producers are under enormous pressure from retailers. Because the first supermarket war started in 2003, in which producers contributed. A strategy based on product diversification, in order to respond to the current and future wishes of the consumer, can ensure that the consumer is prepared to pay a higher price. And so the retailer will also have to pay more for it.”
To translate these challenges into opportunities, Siemens can help entrepreneurs active in the food & beverage sector. Spruit: “From Siemens, I often ask producers a number of specific questions: how will new formulations contribute to the strategic goals set? How can you bring these new products to the market sooner than your competitors, and at a profitable sales price? How do you not only optimize your R&D processes, but how do you ensure that the entire chain of R&D-Production-Quality is optimized to keep the cost price low enough?”
Get a new product to market faster
There is often still much to be gained in product development by food producers: “We at Siemens try to optimize the R&D process,” says Spruit. “We offer a technology platform that fills in the various elements from R&D to production, including quality and regulations. Five to fifteen stakeholders are involved in the development of a new formulation. To make these processes more efficient, you can, for example, have all departments within a company collaborate on these new products via a digital thread. And that is important, because each country sets its own specific product requirements, such as in the area of permitted ingredients and/or label declarations. If you implement optimized software for this, you can bring a product to the market up to 40 percent faster.”
To clarify the advantages of this digital platform, Spruit and his colleagues actively seek dialogue with food producers. “I often ask them the question: how are you going to grow and make more profit, while retailers are putting you under so much pressure?”, Spruit explains. “Because you don’t have enough people, the factory already has 105 percent demand, how can you find production space to run a test batch, for example? Siemens draws up a technology roadmap together with the customer, which ties in with the strategy and production plans. Through interviews and workshops, a detailed map is made of the current situation and the desired situation, so that any project risks are addressed and the predetermined return on investment is achieved.”
Fit-for-purpose applications
However, every change is difficult, the Siemens manager also notes in this sector: “More and more flexibility is required in the output of factories. So you have to change, but the technology is experienced as too complex for many. In the past, a monolithic approach was chosen by organizing everything from ERP programs, but now a landscape of multiple fit-for-purpose applications is often chosen. These applications are much better suited to the needs of the users. However, the biggest challenge lies mainly in the implementation of the platform, looking critically at your business processes and getting everyone on board,” Spruit concludes.
Want to learn more about how Siemens can help you choose the right strategy for the future using technology? Request a no-obligation consultation with Chiel today or visit the Siemens booth Software during the World of Technology & Science 2022. Registration is completely free.
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