Companies that trade in fresh products are, increasing, on the lookout for more innovative ways to remain competitive. They want to do so by lowering costs while maintaining operationally effective. The fruit and vegetable industry is characterized by low margins, seasonal fluctuations, and commoditization.
As a result, many of Keelings Knowledge's clients are looking for ways to integrate their systems and processes. They want a single enterprise solution in order to achieve operational efficiency. This is according to Rick Rebergen from this German software company.
For the fruit and vegetable sector, operational excellence means being able to improve their organization's adaptability (responsiveness and agility). The focus lies with increasing the end product's quality while decreasing production costs and processing times. "From our experience with this sector, we know that these elements are essential for the sector," says Rick.
This is where an Enterprise Resource Planning (ERP) solution is helpful. This is a platform on which the elements of operational excellence are built. ERP software consists of several modules. These modules connect the functional or departmental data and processes in real-time. This increases visibility and coordination throughout the entire business.
From a fruit and vegetable perspective, business revolves around products, such as soft fruit or salads, with a very limited shelf life. Visibility and synchronization throughout the chain are, therefore, essential. This is needed to quickly get the product from the field to the retailer's shelf.
Complex, unique operations
The internal operations of an organization are an important component of the supply chain. In the fruit and vegetable sector, it is about supply and purchasing, receiving the shipments and QA inspection. It is also about processing the products in the warehouse and classification, ripening, and production. Then there is sales and delivery to the client.
The fruit and vegetable sector is complex and, in certain aspects, unique. For example, the product starts to deteriorate from the moment it is harvested. It is fruit and vegetable sector specialists' job to supply products in a condition that is as close as possible to that in which it left the field.
The entire journey through the internal working of a fruit and vegetable company offers many challenges to reach this goal. Using the latest technology in a controlled environment, and the manual processing and storage of these products are needed for companies to operate successfully in this sector. Companies need to differentiate themselves from businesses offering similar products. The way to do so is by being able to coordinate the physical goods stream and transformation of products throughout their organization.
Standard products
Retailers demand standardized finished products in terms of size, color, firmness, and Brix. This requirement translates into the need for improved operational repeatability. There also has to be less end product variation. These two factors are needed to be able to supply a standardized end product.
Fruit and vegetable products will, inherently, differ per grower, variety, and cultivation cycle. This difference is regardless of the raw materials used. These inherent differences mean achieving the goal of a standardized end product is made even more difficult.
Connecting process improvement and ERP software
"We are constantly striving for a culture of company process improvement," says Rick. "This is thanks to our experience at Keelings Knowledge and the companies we work with. We believe that process improvement is an essential part of every ERP implementation. This is because businesses look closely at, and ask questions about, current working methods."
"The ERP solution's best-practice workflows serve as a benchmark. Once implemented, the ERP software ensures standardized workflows. They also support the visibility of information and track a business' growth in volume and complexity."
Combining productivity and cost reduction
Maximizing productivity and reducing costs in a production environment go hand in hand. Possible improvements can be achieved. These improvements can be made by having all the relevant information regarding orders and raw materials' quality close at hand. This is then combined with production information including initial yields and waste.
Rick says, "It is not possible to reprocess fruit and vegetable products. You have only one shot at transforming raw materials into an end product. This also has to be done without damaging the product or detracting from how nature intended it to be."
Timely company info
There is a multitude of internal standards for monitoring business processes. "However, unless performance is measured against how it contributes to client satisfaction, we are wasting our time," explains Rick. "If timely, complete, technically specific deliveries are essential standards for our clients, all the collected data has to, ultimately, contribute to this goal."
Important operational data is everywhere. "In most cases, it is a byproduct of our daily operational transactions and processes," continues Rick. "We can use this data optimally and present it as a valuable business intelligence tool. This can be done by clustering all the important business processes in a central ERP system."
When consistent, timely information is available, correct business decisions can be taken. "We simply cannot trust that traditional, hard-copy systems will keep up with the speed and constantly changing nature of data in the modern fruit and vegetable chain."
Configuring ERP software for ‘best practice.’
Keelings Knowledge's software solutions offer preset configurations as best practice. They also provide customized operational intelligence according to established industry standards. This is their starting point. From here, a company can determine ways to further improve their daily functions. That is, provided the requirements of traceability and food safety are met.
This is important. While the industry focuses on reducing costs and maximizing productivity, there have recently been recalls and food crises. "This made us realize that the product quality and compliance are at the forefront of what the consumer considers important," Rick goes on to say.
Implementing a sector-specific ERP system lays the foundation for process control, automation, increased transparency, and expandability. "These are issues that are crucial for every fruit and vegetable business wanting Operational Excellence," Rick concludes.
For more information:
Rick Rebergen
Keelings Knowledge
Mob: +31 (0) 614 955 005
Rick_Rebergen@KeelingsKnowledge.com