The food and beverage industry is by far the largest business in the world. Packaged food sales in the USA alone for the year 2011 amounted to $332 billion US dollars according to the New Zealand Trade & Enterprise government website that reports such statistics. Major food and beverage manufacturers such as Coca Cola, Pepsi, Nestle, Unilever, Fonterra, Danone, Kellogg’s, Tyson Foods, Arla Foods and Millers run their businesses on SAP software application systems.
Food processing – A Crucial and Complex process
Food processing and manufacturing is crucial but also highly complex in nature. Unlike a car or a computer, it is not possible to disassemble food and put back its components into their original states. Each food and beverage requires a separate set of processes, methods and techniques. Some processes feature straightforward manufacturing steps, whilst others have multiple phases to manufacture a single product. No matter how simple or complex, it is ultimately still a manufacturing process. If a single process fails, then sometimes the entire production is affected and can result in expensive losses. The real time visibility of plant operations and multiple levels included on the ‘Bill of Materials’ is another complex element of the food and beverage industry. These complex business scenarios may easily be monitored through SAP Event Management integrated with SAP Enterprise Resource Planning systems. The entire end-to-end production process can be monitored through SAP Event Management Production Malfunction Processing providing visibility into the different or key phases, for example; receipt of goods or failures of plant machines. You can see each of the production statuses from commencement of the process until the final products are received at the warehouse – all in SAP Event Management – and this also has the capability to highlight any unexpected events that occurred in the production process either when they happened, or if less serious, after the fact, for further investigation.
Food Regulatory Compliance
Another important point to consider is that in the USA, the food regulations are different in every state. It is of vital importance to ensure therefore that food standards are met without compromise according to the location of production. Even though the US Food and Drug Administration have a wide range of standards and rules that apply, automated systems help to maintain and adhere to these standards, prior to final preparation and shipping of the product. The integration of SAP Global Trade Services with SAP Event Management enabled precise and real-time visibility into the status of compliance and ensures that custom regulatory rules and requirements are met. The system allows events related to custom declarations for import and export to be tracked directly in SAP Event Management. If any event is unreported or unexpected, it becomes an exception, and SAP Event Management will trigger an alert and communicate to the export and import documentation team ensuring that they address the issue and remain compliant. Alerts can be delivered via a number of methods and commonly include email, SMS, fax or B2B notifications.
Food Distribution and Supply Chain Management
Another important factor in the food and beverage industry is that manufactured products must be stored and delivered to customers on or before a specific date that can also be impacted by demand. Food products have a shorter shelf life compared to car or computer products. Therefore, this requires more attention in the Supply Chain Management process. Products are manufactured on a scheduled date and are then stored securely in a warehouse. The real challenge arises in shipping the products across different international borders and at the same time meeting the customer demand on the requested date.
Shipping the product also has different options; from port to warehouse by truck, or from port to destination country by shipping vessel, sometimes including multiple stops along the route, and then delivered from the destination country port direct to the customer. Layers of logistics, for example lead logistics providers and consultants (known as 4PL) and logistics service providers (known as 3PL) play a major role in the ‘track and trace’ location services of the shipped product to the customer. We have to rely on 4PL and 3PL providing both regular and accurate information and updates to determine if the products have reached the customer on time. If there is no visibility into the location of the shipped product, we end up taking a reactive approach rather than a proactive approach when either unreported or unexpected scenarios happen to a shipment.
The SAP software products including SAP Transportation Management, SAP Event Management, SAP Customer Relationship Management, SAP Enterprise Resource Planning, and SAP Universal Worklist Configuration are able to provide true visibility into food distribution and supply chain management whilst closing any gaps in the entire process, and handling unreported or unexpected scenarios that may arise at any time during a shipment.
Why is SAP Event Management truly the king of track and trace?
There are a number of reasons that SAP Event Management excels:
- Flexible event tracking for customer orders, from manufacturing to delivery.
- Integrated SAP Event Management details in SAP Enterprise Resource Planning including sales order and delivery details
- Integrated SAP Event Management details in SAP Transportation Management
- Integrated SAP Global Trade Services Customs Management for export and import declarations
- Event notification via web interface, mobile & technical devices such as RFID and hand-held scanners
- Rules-based follow-up activity and alert triggering
- Unexpected event alerting and communication via email, SMS, fax and B2B
- SAP Business Warehouse Integration for advanced analytics and reporting