Growing complexity forces manufacturers to invest in flexible IT platforms
Compliance is growing in complexity, especially for global manufacturers and distributors. In addition to legislative compliance requirements – which differ per country – and a whole range of certificates, there’s also an enitre set of (country-specific) standards by the retail industry that food businesses must comply with. Standards which are often more stringent than the legal framework.
The growing number of product variables that need to be marketed fast: it’s one of the main reasons why compliance has become such a complex issue to deal with. Add a global dimension to that, and compliance is an even harder nut to crack. It is actually a prime example of what we like to call ‘business gravity’: something which is unavoidable, but which slows businesses down.
But it doesn’t need to be like that. With the right technology, food companies can make sure that compliance management is effective and efficient. This is technology that enables a business to:
- Gain end-to-end insight in the total supply chain, from field to fork
- Do a fast recall in case of an incident
- Estimate whether retail requirements can be complied with, both from a technological point of view (can we do this?) as from a profitability point of view (do we want this?). The challenge is: how fast can we find out?
A small window of opportunity
Compliance is not new. The fact that retailers impose a whole range of extra requirements on different levels – such as product, packaging and logistics – isn’t new either. So what has changed? The number of product variables and the speed at which they need to be marketed, at home and abroad. We tackled this issue in this blog.
If they want to stay relevant, manufacturers must be able to market those variables faster than their competitors, and they must do so at healthy margins, at a high operational efficiency, in compliance with the legislative requirements of each country they do business with and in compliance with the set of rules imposed by retail. Speed is key here: the window of opportunity is usually very small.
The real question is not: can we market those product variables, but: how fast can we do that? It’s a matter of being faster than the competition (and bringing home the bacon) or missing the boat completely. There is no in-between. It’s not just about taking the right and necessary steps, it’s about the speed at which these steps can be taken.
Technology as enabler
Many of those retail requirements are technology driven. Take Vendor Managed Inventory, for instance: for many retailers it’s a non-negotiable to do business. And it’s technology that enables the manufacturer or supplier to comply with the retailer’s demand for VMI and Continuous Replenishment (or not, as it happens).
Microsoft Dynamics 365 for Food is an example of such an enabler. Microsoft Dynamics 365 helps food businesses with effective compliance management (on all levels: legal framework, certificates and retail requirements) and it’s extremely open and flexible, which is necessary whenever new rules or standards are set. This happens contiually, as the food industry is evolving very fast.
Some examples of how Microsoft Dynamics 365 for Food deals with compliance management:
- On the product level: in Dyn 365, it is possible in to work with different variables of one single product, each of which can come with a different manufacturing process. An example: some retailers do not allow a specific residue to be present in cookies after baking, whereas others do.
- On the packaging level: in Dyn 365, it is possible to customize label lay-out in accordance with the retailers’ regulations. An example: for some retailers the barcode needs to be size X, and printed on the side; for others it needs to be size Y and printed on the back.
- On the logistics level: in Dyn 365, it is possible to add an extra step in the picking process. An example: for some retailers pallets need to be stacked 5 high, for other retailers it is 6 high.
Conclusion: effective compliance management is key in the food sector. Businesses that want to gain speed, and keep up the pace, must not only be compliant today, but able to comply with whatever rules and regulations will be set tomorrow, and to do so fast and without friction.
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