Food manufacturers are increasingly using technology to improve output and quality. By using cutting edge software to link up every aspect of the supply chain, wastage can be easily cut out and problems identified quicker. Is this the face of food production in the 21st century?
US-based firm Litehouse Foods for example, a modest-sized manufacturer of refrigerated dressings, dips and sauces, claims to have improved its performance through the use of supply chain planning technology. The software, supplied by global software firm Ross Systems has made supply chain planning much simpler.
Litehouse says that it has already realised substantial savings, increasing product fill rates by 10 per cent while reducing finished goods inventory by 6 per cent. This has allowed the company to make considerable savings on carrying costs. In addition, the company has improved forecast accuracy and brought greater visibility into production.
"We needed more timely and accurate demand forecasts to ensure the right amount of inventory was available at the right time," said Litehouse Foods chief operating officer Bill Hawkins. "By achieving a correct one-number forecast for the entire company, we can now plan, modify and manage at the customer level like never before possible.
"This data is turned into useful information that allows us to proactively plan for trade promotions, improve overall collaboration with our trading partners and, through this, increase customer satisfaction. We are well-positioned for continued growth and anticipate even greater results."
Software solutions appear to be of particular use to companies that have grown rapidly in a short space of time. Litehouse for example has more than tripled its offerings in the last five years, and has found IT solutions essential in achieving financial visibility and control. The software also allows the company to predict demand more effectively and address rising distribution complexity.
In effect, Litehouse has moved from manually forecasting more than 1,000 units at the category level on a monthly basis, to streamlined forecasting at the product level on a weekly basis. Ross' iRenaissance SCM software has given Litehouse greater control over its production and planning processes, ensuring that the proper product mix and quantities are being produced.
There are other benefits. Litehouse no longer needs to maintain unnecessary safety stock to account for unexpected shortages, which has brought the company closer to a make-to-order production model and helped to cut costs. The increased efficiency has allowed Litehouse to make better use of existing capital and human resources.
"Helping our customers become the best manufacturers possible - more productive, more efficient, with stronger customer relationships - is our goal," said Ross Systems chief executive J. Patrick Tinley. "The tremendous growth and success at Litehouse, in a lackluster economy, exemplifies the benefits that companies can derive from enterprise management systems designed specifically for their industry requirements."