Enterprise Resource Planning - the future
ERP suppliers say they can benefit from companies desire to operate in different channels
ERP systems will become easier to use, while the cloud, mobile devices and social media will have an impact on products on offer to manufacturers.
Although ERP systems have long been present in the food industry – at least for large multinational companies – competition and regulations on traceability is propelling the adoption of these systems. And, as ERP systems continue to become an integral part of food sector, experts in the industry are predicting the emergence of certain trends.
According to Patrick McLaughlin of US-based cloud ERP provider Plex Systems (the developer of Plex Online ERP software), the trends around the kind of software systems companies are looking to integrate is clear.
"We see a continued adoption of the cloud computing model for the food and beverage business for many reasons – quality, traceability, cost, seamless upgrades, predictable IT spend, accelerated time to value through immediate deployment, user adoption and lower learning curve, more secure environment, and the ability to be available anytime from any device," he says.
Roman Bukary, GM of manufacturing, wholesale and distribution at NetSuite agrees the future of ERP systems will see a big move to cloud technology. "I think the idea of software on-premise – having your own servers where you have to manage and maintain it – is going the way of the dodo bird."
Within the actual ERP systems themselves, another example of demand gathering huge momentum is EDI (electronic data interchange), Bob Swedroe, president and CEO of Expandable Software, says.
EDI is a data processing concept independent of communication protocols, where the type of electronic communication between departments within a company can easily be extended to reach out to other companies or trading partners. This is an important element in the age of mergers and acquisitions, with newly combined companies finding themselves with different sets of heterogeneous ERP solutions that need to talk to one another.
While ERP systems of the past have been transforming how food industry companies operate their businesses internally, Ranga Bodla, director of industry marketing at NetSuite agrees that, over the next decade or so, the shift will take place in the area where systems begin transforming how businesses operate with other businesses and their customers.
In May, for instance, NetSuite announced its 'Commerce as a Service' package, which enables businesses to manage their interactions with other businesses and directly with consumers via a cloud platform, including through a commerce-aware platform that provides a central system to manage all transactions and customer interactions with consumers and other businesses, no matter what the device or server used to access the cloud.
"One of the biggest trends we see – and that we believe NetSuite is able to take advantage of – is the need and desire for organisations – specifically manufacturers and distributors – to increase their reach and channels to market," says Bodla. "More and more manufacturers and distributors are either going direct to consumer or [have] added in a B2B channel to their business to communicate more closely with suppliers, customers and vendors."
In terms of innovation in the pipeline, agrees Swedroe, reporting and analysis tools have been significantly improved in recent years.
He says ERP systems will also develop more effective user interfaces for data entry and reporting, in conjunction with ongoing technological advances in the global arena.
"Mobile devices and their network infrastructures facilitate and provide the front end capability to enable powerful functionality including quick data look-ups, point-of receipt or point-of-sale transaction processing, automatic re-order processing, and real time product availability information," Swedroe says. The accessibility, he explains, could enable companies to leverage consumer-relations, for instance through proactive notification of the consumer of tainted products – say through their smartphones.
Bukary agrees. "How we live in the consumer world with mobility and social media and large flows of data will also impact the food manufacturers."
Although ERP systems of the future will help improve and streamline business externally, and with other companies and customers – especially in conjunction with new technologies – James Wise of UK-Canadian Solarsoft Business Systems said that these systems will not stop making advances internally, either. "I think what's going to happen over time for food manufacturers is that the [ERP] systems are going to get more tightly coupled to the machines that make the products," he says. Wise explains that, with wireless technologies such as iPhones and iPads, for instance, a company’s quality control officer can walk next to a production line and communicate irregularities to the system in real-time.
And with ERP systems becoming increasingly customisable, flexible and more advanced in general, integrating them into the food industry is just the first step towards the system beginning to tell companies what to do, believes Tom Pirko, president of food and beverage consulting firm Bevmark LLC.
"Decisions will be made less by human beings who are prone to making mistakes, as systems are evolving to a point where you can rely upon them – at least on the frontlines – to make certain decisions for you," he says. "In the future, these systems will give companies the ability to make the right decisions fast, by putting all the information together and processing it out the other end – we're looking at a level of sophistication with the technology where it will pull everything together, qualify it, evaluate it and be able to manage and manipulate it to render a decision which advances your business."
Sectors: Baby food, Bakery, Canned food, Cereal, Chilled foods, Commodities & ingredients, Condiments, dressings & sauces, Confectionery, Dairy, Dried foods, Food safety, Fresh produce, Frozen, Ice cream, Meat & poultry, Multichannel, Natural & organic, Private label, Retail, Seafood, Snacks, World foods
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