Most people can easily name which breweries have changed their business structures, such as the MillerCoors joint venture or InBev’s acquisition of Anheuser-Bush. The landscape of the food and beverage industry is far more active than most realize – and it is seemingly always on a massive scale. Per the quote by the anonymous employee above, a simplistic view of Kraft Foods’ recent changes highlights the level of activity:
- Purchased by Philip Morris
- Combined with General Foods
- Acquired Jacobs Suchard
- Merged with Nabisco Holdings
- Sold Post Cereals
- Bought Cadbury
- Sold DiGiorno/Tombstone/Jack’s pizza
- …is expected to split into two wholly separate companies in 2012 – a North American grocery business and a snack business.
How can one successfully manage all of the detailed supplier information (and within food and beverage, the needs exceed other standards) with a revolving door of suppliers, systems, and processes? Companies that focus on cost reduction and operational improvements will come out of the recession stronger.
This dynamic is further complicated by the global expansion of food and beverage companies. As white label products are pushed to emerging markets and outsourcing continues to grow in low-cost countries, organizations find themselves struggling to:
- Enforce consistent controls whether by corporate, business unit, geography, or other
- Ensure the collection of complete and accurate supplier and product-level information
- Gain visibility across the supply chain, often cloaked by multiple ERP systems
Food and beverage companies are under the pressure of regulations and oversight, facing the potential for exorbitant fines and penalties when violations occur. Procurement and supply chain departments struggle to oversee the effectiveness of their programs and meet compliance standards, such as environmental at state and federal levels (e.g., water reclamation), Anti-Bribery (e.g., FCPA), and SOX (e.g., Segregation of Duties).
One particular concern is food safety programs. As the need for consumers to feel that their foods are safe increases, food safety and Produce Traceability initiatives will continue to stretch existing supplier information systems. These programs require a science-based approach and the ability to drill into supplier, facility/location, and product-level information in order to ensure regulatory compliance. Additionally, these initiatives require new and efficient methods of communication with suppliers and trading partners, so that early identification of possible problems, whether through consumer complaints or other methods, can reduce the need for recalls.
As food and beverage companies rely heavily on many different farms, facilities, and plants, the supply chain has been under constant pressure to ensure satisfactory factory audits on a regular basis. With multiple business units and systems of record, the burden has often fallen on manual efforts which expose the organization to missing and erroneous information, and even missed audits.
HICX understands the many pressures that food and beverage companies face. Our products are designed to harmonize processes and information flow within organizations under a constant stream of change, as well as to obtain complete and deep visibility into supplier information, whether on a supplier, location, or product level.
Whether overcoming the challenges of multiple disparate systems, integrating with quality management systems, scorecarding transportation providers, or tracking supplier information down to the mill/farm, lot, or ingredient, HICX is confident that we can help your organization – and we welcome the opportunity to show you how.