Food Is The New Pharma

Enterprise resource planning (ERP) software plays a crucial role in food and beverage (F&B) manufacturing. When effectively implemented, an ERP system provides a 360-degree overview of business operations by collecting, storing, managing and interpreting data collected from the factory floor. Traditionally, this was labour-intensive and prone to human error. To better understand how ERP software is implemented in factories across the world, Shali S, Assistant Editor of APFI, speaks to Frank McLoughlin, Vice President, Business Solutions Group, of Epicor International.

In light of recent food scandals in Asia, traceability has become a concern for many consumers. How can manufacturers utilise ERP software to ensure safety in their food supply chain?

Food safety is seen as the single most important issue among F&B manufacturers, and the demands to document information relating to food sourcing, material flow, traceability, and more, present an ongoing challenge. Farm to fork tracing requirements and accurate nutrition reporting on labels have become norms—especially as consumers demand more transparency on what’s on their plate—and ERP solutions are one way to ensure a safe and nutritionally sound product reaches consumers.

For traceability solutions, I believe the F&B industry has much to learn from looking at the trends and quality control (QC) procedures already in place in the pharmaceutical industry. The pharmaceutical industry is renowned for its traceability and product quality control—a benchmark for industries like F&B. The compliance and control that is prevalent in the pharma industry is slowly cascading down into the food industry, highlighting the importance of pharma-grade quality for the safety of food products.

By providing a framework to meet regulatory compliance demands, ensure product safety and control costs, an ERP system is proving an increasingly essential tool in the food manufacturer’s arsenal for traceability. An ERP system automates the traceability of ingredients from origin to the final customer, as well as speeds up and simplifies the audit process, thus streamlining business processes.

What are some challenges businesses may face when installing ERP solutions to their operations? How can these be mitigated?

Some of the major challenges for businesses to adopt digital technology such as ERP solutions include cost of investment, no clear plans for the implementation or metrics to measure the success, inadequate resources, and investment or necessary talent.

We often hear from our manufacturing customers that their outdated technology prevents them from being able to support rapid growth, with many reporting the same three significant business challenges—excessive pressure on operations, increased workloads, and an inability to make fast and informed business decisions. For example, without access to accurate and timely data, staff can struggle with the volume of manual tasks, hampering the speed of service and subsequently impacting customer satisfaction. At the same time, business leaders might not have data at hand which could help them make faster and more informed business decisions.

By adopting a modern ERP solution, manufacturers are also able to attract talent from the digitally-savvy millennial generation who expect to have access to easy-to-use systems in the workplace. Manufacturers who recognise the importance of attracting millennial talent, can gain significant competitive advantage in today’s age of digital disruption.

The uptake of software solutions in Asia is not as rapid as the West. What advice would you give to businesses that are hesitant to invest in ERP solutions?

I would say, do not be left behind. Investing in an ERP solution will help your organisation grow and become more competitive. Every business is unique and faces different challenges at different times, so the question is, how do you decide if and when investing in an ERP system is right for your business?

We recommend that you review the following list and if you are able to say yes to the majority of items, it might be time to adopt an ERP solution.

1. Your team members are spending too much time on tasks you know could be automated and streamlined.
2. You don’t have easy access to the data you need to make informed decisions about your business.
3. You work with vendors and third-party applications across the globe.
4. You have a lot of different software tools and processes that you’ve adopted and implemented for your business over the years, but they are not connected to each other.
5. You don’t know what your inventory levels really look like on a daily basis.
6. You’re personally spending too much time searching for information, trying to boost productivity and efficiencies, and integrating new tools that are needed in order to scale. Your teams can’t easily collaborate or share information with each other.
7. You can’t access essential business data and information when you’re off-site.
8. You’re having trouble keeping up with changes in regulatory compliance.
9. You’re finding or addressing problems when it’s too late. In other words, you’re not able to be as proactive as you’d like when it comes to identifying problems that need to be fixed in order to keep your operations running smoothly.

Success Story: Epicor Supports GELITA’s Growth With Advanced ERP Software

Complex Production Processes And Stringent Quality Control

GELITA’s products require strict monitoring and tracking of the whole product cycle—from material purchase to production and shipment—in order to make sure the gelatine products meet the stringent requirements of the food and pharmaceutical industries. It is noteworthy that gelatine production has extremely complex intermediate processes with no room for error. The final products are obtained through painstaking steps including pre-processing, extracting, filtering, purifying, high temperature sterilising, cool solidifying, drying, and then storage.

Because GELITA’s factories in Liaoyuan and Pingyang produce different products, they have totally different production processes and cycles. For example, it takes an average 60 days for the Liaoyuan factory to obtain the final bone gelatine from the raw materials. On the other hand, it usually takes only two to five days for the Pingyang factory to get the final skin gelatine.

Faced with these complex challenges, GELITA needed a modern enterprise resource planning (ERP) solution to more efficiently manage the quality and quantity of the different products produced with different production processes, and to align seamlessly with its Germany headquarters and the international subsidiaries.

Improving Production Processes At GELITA

After a rigorous selection process, the German headquarters chose the Epicor ERP solution based on its industry-specific expertise, and its customisable, highly scalable and flexible solution that would better meet local requirements, align with foreign markets, and achieve unified deployment of global resources and data sharing.

Working closely with GELITA, Epicor ensured the implementation of Epicor ERP was in-line with its unique requirements and integrated seamlessly with its existing systems. This meant that GELITA could effectively integrate and standardise processes globally, enabling that the Pingyang and Liaoyuan factories meet global operational standards. To simplify the implementation process and reduce costs, GELITA implemented Epicor ERP in phases, rolling out modules as and when required. The solution’s scalability and flexibility has provided GELITA with the option to scale up in other markets as the business requires- the localisation support kit, for example, includes financial statements that are designed to conform to the requirements of local tax authorities and increases the efficiency of financial management.

The Epicor ERP solution has built-in global compliancy features, which have helped GELITA to more effectively customise production processes based on its specific needs, allowing it to document that the raw material and final products meet the stringent quality standards for China and exported markets. In addition, the maintenance module has increased visibility of the production cycle and helped GELITA improve the utilisation and performance of its equipment, as well as lower its costs. “The built-in processes in the Epicor ERP solution help us improve the daily management of our global business. In addition to improving the timeliness and validity of information, the Epicor ERP system also helps us to focus even more on improving customer management and production technologies,” says Global Vice President IT Horst Vollberg, GELITA AG.

Next steps

With improved scalability, flexibility, and ease of configuration, the Epicor ERP solution has supported GELITA’s growth and position in the gelatine manufacturing industry. Today, GELITA has successfully deployed the Epicor ERP solution in Australia, New Zealand, and the PRC. The company plans to gradually roll it out to other markets going forward.

*Case study courtesy of Epicor.com

GELITA: Who Are They?

GELITA AG is one of the three largest gelatine producers globally. With the most advanced production technologies and equipment, it not only serves the food and beverage industry but also is active in other fields such as health and nutrition, pharmaceutical, and medical industries. Headquartered in Eberbach, Germany, GELITA AG operates more than 20 production plants in the USA, Mexico, Sweden, Netherlands, Australia, New Zealand, South Africa, Brazil, and the People’s Republic of China (PRC).