The Advantages of a Data-Driven Culture for Food Production

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According to a 2022 report, data-driven organizations show a 30 per cent increase in annual growth in addition to being profitable and acquiring and retaining new customers. How can this metric be explained? Research shows that quick and confident decision-making relies heavily upon available data. The most important business decisions in today’s global market require maximum data visibility – a business strategy that characterizes the largest and most successful industry leaders.

Data-driven decision-making is even more crucial for food and beverage manufacturers, who are operating in a complex global supply chain with thin margins and plenty of risk. According to CSIMarket, the gross profit margin for the food processing industry in 2022 currently rests at 19.2 per cent, which is lower than other industries (averaging 49.4 per cent). In such an environment, the advantages of quality, workable data for business success is difficult to understate, yielding valuable analytics to drive business agility and providing the means to build capacity in a scalable way for the future marketplace.

Keys to securing data quality and building a data-driven workplace culture
Data-driven production does not look the same for every kind of product. The complexity of food and beverage processing puts it in another category that has unique needs for data management. Food processors need a solution that can interact with a range of production workflows, meet compliance and quality standards, bring operations into sync, and equip them for growth.

However, what is true for all kinds of data management systems is that it needs to be collaborative to reflect the real way your business is running. Connecting all departments in your food manufacturing business with an ERP improves transparency and awareness, allowing leaders to show employees what and why things are working, reduce friction between team members, cut cost, and generate more revenue.

A data-driven culture ensures that everyone on your team, from the production floor to head office, can contribute to the quality of information, by adding value at every stage of the process. One way to build a data-driven culture of collaboration is having data champions assigned to each critical area. For smaller companies, only one person may be needed. For larger organizations, it is best to have data champions for each division, and consistent and timely reviews of data to ensure results.

A system that centralizes data creates a single source of truth for your organization. It embeds a culture of transparency and accountability, providing your team with the essential information required for people-centric productivity. To ensure the trustworthiness of your information, it must meet the criteria for quality data, such as:
• Accuracy – reflects reality of production in real-time to ensure compliance and visibility;
• Standardization – systematically collected in a consistent format;
• Uniqueness – organized granularly for traceability precision;
• Completeness – covers all important metrics at the right intervals;
• Validity – meets all requirements for documentation standards; and,
• Visibility – easily transformed into actionable insights for business and auditing purposes.

With these criteria met, collected data can be leveraged for analytics, helping businesses make decisions for the future with clear eyes.

Data analytics drive business agility
The more a company uses data for analytics, the more powerful it becomes. Consider what information you need in the face of a problem. You need to know what happened (descriptive analytics), why it happened (diagnostic analytics), what will likely happen next (predictive analytics), and how to make it happen – or not happen – again (prescriptive analytics). All these analytics play a role in improving your bottom line; by analyzing your results over time, you’ll gain the insight you need to predict what will come next, and make the course corrections you need to achieve more and avoid costly mistakes.

With a data-driven model of your business, food businesses gain the resilience to meet unprecedented challenges that increase risk and damage profitability. Digitized systems offer clear advantages:
• Infectious outbreaks can be controlled by maintaining the highest levels of biosecurity and the ability to rapidly implement new measures when needed, as well as keep critical records for contact tracing and other health and safety measures.
• Cloud-based systems ensure access to all essential business information in the event of an emergency, enabling remote work and eliminating avoidable gaps in production or compliance.
• Documented procedures and automated task management makes it easy to train new employees, keep training records, and simplify transitions. A smart system uses training data to ensure that the right people are being assigned to the right tasks, and uses performance analytics to optimize operations.
• Supplier management is critical for sustaining productivity and profitability. The ability to look for alternate suppliers and manage alternate formulations and recipes for products provides flexibility for businesses. Data-driven supplier management tracks vendors, monitors supplier audits and qualifications, and helps food businesses sift through information to pinpoint problem areas in their supply chains. As you watch trends in lead time, you can identify your best options and look for alternates during unforeseen disruptions.
• Advanced planning and costing capabilities, using real-time data, allow businesses to become more adaptable to new, difficult or adverse circumstances like supply chain challenges and rising costs. Integrated, smart inventory management systems leverage data to maintain optimal inventory thresholds, maximize production uptime, and lengthen product shelf-life.

In these ways, data-driven approaches to food production provide significant opportunities to weather storms and gain an advantage in a highly competitive industry.

Data management builds capacity for success and growth in the food industry
Creating a culture and infrastructure that thrives on data allows companies to do more internally: speed up production, reduce waste, improve systems or processes to optimize resourcing. Leveraging high quality data in decision-making – whether for start-ups or established companies – means that growth can go beyond profits, generating capacity to reach long-term business goals.

Let’s start with compliance, which poses an increasing data management challenge as traceability systems and requirements become more complex. Data-driven logistics and production operations allow food businesses to achieve the highest levels of productivity while maintaining audit-readiness, translating into less time spent on preparing for and completing audits and more time for specialized staff to improve product safety and quality. With data-driven systems in place, you can leverage that extended capacity to meet regulatory requirements in new markets, whether from governments or third-party certification bodies (like non-GMO or vegan).

Efficiency translates even more concretely into profitability when it comes to production, maintenance, and warehouse management. Efficiencies add up, especially for high volume operations. Process automation, particularly for data capture, gives food production operations the benefit of faster turnaround times, fewer manual processes like data entry, reduction of errors, and increased efficiencies that result in direct cost savings.

A member of the Icicle user community found that a six second reduction on each order picked from their warehouse yielded over $100,000 in savings over one year. For another, having complete records on production runs revealed a packaging error that could have cost the company over $1.4 million a year, if not corrected. The timely review of data is critical to your bottom line.

Efficiencies add up, especially for high volume operations. Process automation, particularly for data capture, gives food production operations the benefit of faster turnaround times, fewer manual processes like data entry, reduction of errors, and increased efficiencies that result in direct cost savings.

Similarly, maintaining optimal levels of equipment uptime yields direct benefits to food manufacturers working with thin margins from the get-go. Automated, data-driven systems ensure that maintenance activities are properly scheduled and monitored, and help your staff uncover and avoid costly problems through analytics on productivity, preventative and corrective maintenance logs, and schedules.

Automation for profitability is true competitive advantage
Today’s food industry presents a challenging landscape for small and medium sized businesses, and they need a competitive edge. Growing companies can expand their distribution and export markets simply by freeing up the capacity to manage additional compliance requirements. Companies now required by law to implement highly data-driven traceability systems are leveraging that same information to reduce waste and improve efficiencies. Manufacturers and distributors are automating production and logistics processes to enhance quality – of data and of products – with IoT sensors and other forms of automated monitoring technology.

Crucially, even small startups are using data-driven systems to design their operations for scalability and adaptability for tomorrow’s challenges, entering the market with the intelligence and awareness more often characteristic of large corporations with decades of experience and expertise behind them. These startups are taking advantage of precise planning and costing capabilities that used to be unaffordable even a decade ago.

Having sustainable accurate data will help you meet targets you know you need to meet and discover targets you didn’t know you could reach. With larger clientele that require industry leading price points, managing margins with high precision ensures your profitability and business success. This can only be achieved through an integrated data-driven approach to warehouse operations that keeps quality and team performance at its highest and builds a strong workforce culture which is the best way to have true competitive advantage.
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Article provided by Icicle.