By Mauro Fratarcangeli and Matthew Kenny
In the food processing industry, inventory management is critical. When products have a defined shelf life, companies must move products quickly and according to age — not according to the first skid a picker finds. Getting it wrong can come with hefty penalties, sometimes in the millions of dollars depending on the contract.
Yet many companies don’t invest in the technologies that could improve these activities. Technology often takes a back seat to new product lines or customer growth initiatives. As a result, companies don’t think about technology until an issue arises — whether that’s a breakdown in an archaic inventory management system or demands from distributors to use electronic data interchange (EDI).
Investing in enterprise resource planning (ERP) systems can significantly enhance your operations. From demand planning and forecasting through to manufacturing, procurement and inventory management — ERP can help you make market-driven product decisions and better manage and trace your inventory.
While ERP implementations can be challenging, we’ve found that there are a number of key factors that can help with achieving success.
Embed technology within your strategy
Technology should be an integral part of your strategic planning process. Look at your strategic objectives and ask, “How will I use technology to enable our organization to achieve our objectives?” By aligning technology and strategy, you will be best able to maximize any technology investments.
Gain buy-in from the business
An ERP solution can’t be driven by your IT function; it needs to be supported across your organization and by your business leaders. Only move forward with an implementation if you have all your key stakeholders on side.
Make sure you have the resources
Before you begin, map out the resources you need and where they will come from. It’s better to take the time to plan resources and free up time than to move forward without the support you require. Work with a third party experienced with ERP implementation to provide the expertise you probably don’t’ have internally.
Plan for change
People can be your biggest asset — or your biggest roadblock. That’s because realizing benefits from technology change requires people to do things differently. As you develop your implementation strategy, incorporate how you will manage change within your organization and get people to buy in to new systems and processes.
Appoint your own project manager
On a large-scale project, the focus on expected outcomes can be lost in a desire to get the project completed. You need to take ownership of the benefits you expect. When working with a third party ERP organization, you need your own project manager to keep the project focused on achieving the business objectives set forth at the beginning of the initiative.
When making internal investments, remember to look beyond your immediate operations. What you will likely find is that by investing in ERP, you can improve efficiencies, reduce your risks and build a strong foundation for growth.
Mauro Fratarcangeli is National Food & Beverage Industry Leader for PwC and Matthew Kenny is Consulting Leader, Private Company Services for PwC. For more information contact Mauro at [email protected]
This article appeared in the print issue:October 2015 edition, Ask the Expert section