Real time, real profits
January 1st 2010 A lack of real-time production and supply chain information is leading food processing
companies to chase revenue without any certainty of making a profit says Solarsoft
Top line revenue figures may indicate that the majority of
the food processing industry is having a good recession,
with many companies posting significant revenue growth
in recent months. However, with
the growing supermarket focus on
basic and essential ranges, margins
are being squeezed ever tighter and
many companies are only now
beginning to realise that much of
this increased revenue is not
generating any additional profit –
and may indeed be incurring a loss.
Organisations are struggling to
attain the depth of information
required throughout the
production process to rapidly and accurately assess the
profitability of new or changing contracts.
Yet it is by improving real-time information throughout the
supply chain that food processors can tune their operations to
drive down costs, reduce wastage, minimise packaging inventory
and improve supplier management.
For example, in-depth shop floor information can be used to
drive real-time reporting. A simple red, amber, green dashboard
displayed on a screen can be used to demonstrate how each
production line is performing and give early warning of over- or
under-production or of a problem with the ingredients mix.
One area of the food processing industry
that is struggling to remain profitable
during the recession is the dairy market –
with the retail price of milk now less than
the cost of production. By adopting ERP
throughout the supply chain, dairy
processors are looking to reduce wastage
and maximise productivity to drive costs
down by 1–1.5 pence per pint, a move that
will take the business back into profit.
With the exception of the dairy
industry, the food processing market is
benefiting strongly from the supermarket's growing adoption of
lower cost own-label goods, with revenues up significantly. But
to truly maximise this opportunity, these organisations need to
make far better decisions on the profitability of new deals in
real-time. Too many organisations are happily embracing big
revenue contracts that turn out to be loss leaders as the
supermarkets pass margin
squeeze down the supply chain. More articles from Solarsoft Business Systems Ltd: | 
