There’s no doubt that COVID-19 pushed the food supply chain to its limits. It exposed weak links, fragile networks, and transportation nightmares. Combine this with a shortage of skilled workers and the world had a real challenge on its hands. This perfect storm in the food and beverage industry has only been made more volatile with rising energy prices and the cost of raw ingredients. The worry for many is that prices are continuing to rise at their fastest rate for 40 years, with foods costs seeing a real surge. UK inflation, the rate at which prices rise, edged up to 9.1% in May. With the USA also seeing a 40 year high of 8.6% in recent weeks too.
Whilst fuel and energy prices are the biggest drivers of inflation, The Office for National Statistics has said that food costs have pushed it even higher. Inflation remains among one of the most prominent issues for businesses. With many organisations having to figure out how they can pass on their added costs to their customers, without losing business. Up to 70% of food and beverage producers have had to pass their increased costs onto the consumer. With the public already seeing a pinch, how long can this go on for? What can manufacturers do to try and deal with the challenge?
Rising costs have hit the food and beverage industry harder and faster than any other market. As an industry that uses an extreme amount of energy, for everything from refrigeration, through to heating and cooking, it’s no wonder that they’re being faced with such a challenge. How can food and beverage manufacturers meet demand, whilst also remaining profitable? How can you become more resilient in such an ever changing, unpredictable climate?
Going digital and embracing digital transformation across the food and beverage industry offers a host of opportunities when it comes to rising costs. On top of many manufacturers list of priorities is increasing visibility and transparency across the business, helping to increase efficiencies throughout operations and gain as much information as possible from across the supply chain. Bringing together disparate systems, helps you to streamline your operations and increase operational efficiencies. Gaining a holistic view of your operations with an ERP solution, means you can easily identify and monitor where cost and waste can be reduced.
The role of ERP
IFS Cloud gives you the ability to take control of your operations and see information from across the business in real time, helping you make more informed decisions. With rising costs coming from all angles, IFS Cloud gives you the chance to gain better control over your costs. The platform can help you look for operational inefficiencies, helping reduce waste and spend. Discover more about IFS Cloud here.
We’ve helped many food and beverage manufacturers utilise ERP to help them grow and support their daily operations. Take a look at our most recent food and beverage case study with KLN Family Brands, a confectionery (and pet food!) manufacturer to see how the Cedar Bay team have supported their business goals. Click here for the case study.