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HomeMoving to operational excellence in fresh produce? Here’s how

Moving to operational excellence in fresh produce? Here’s how

Posted: 29/08/2017

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Fresh produce businesses are increasingly looking for innovative ways to stay ahead of the competition by reducing costs while operating effectively. With the industry typified by low margins, seasonal peaks and trading in some categories like a commodity, we see many clients looking to integrate their current separate systems or processes into a single enterprise solution to gain that operational efficiency.

For the fresh produce industry, a good definition of operational excellence is improving the responsiveness and agility of an operation. It focuses on increasing quality of end products while simultaneously reducing production costs and processing times. From our experience in fresh produce, we know these elements are critical to the industry.

This is where an Enterprise Resource Planning (ERP) solution comes in. It is the platform on which the elements of operational excellence can be built. ERP consists of a variety of modules that link functional or departmental data and processes together in real time, which in turn increases the visibility and co-ordination across the entire business. From a fresh produce perspective, when managing highly perishable products like soft fruit or salad lines, visibility and synchronisation across the supply chain are critical in order to move the product efficiently from the field to the retailer’s shelf.

Complex and unique operations

A key part of this supply chain is the organisation’s internal operations. In the case of fresh produce, they are defined as initial procurement and inbound transport, receipt and QA inspection, warehouse picking, grading, ripening and production to final dispatch and outbound logistics to the customer. Fresh produce is complex and in some way unique because the product begins deteriorating from the point of harvest. It is our job as fresh produce specialists to get it into the hands of the final consumer in a condition as close as possible to when it left the field.

The journey through the internal operation of a fresh produce company presents numerous challenges to achieving this goal. The latest technologies in controlled atmosphere, manual handling and storage are now a necessity to operate in this industry. The ability to co-ordinate the physical flow and transformation of goods as they flow through the business is a source of differentiation between businesses supplying similar produce.

Standard products

Retail customer’s demand standardised finished products throughout the season in terms of size, colour, pressure and brix. This translates into the need for improved operational repeatability and a decrease in final format variations in order to deliver uniform finished products. However the fresh producer’s raw materials are natural products; they inherently differ by grower, variety, and crop cycle, which makes achieving this goal even more challenging.

Linking process improvement and ERP

From our experience at Keelings Solutions, companies we’re engaged with are striving to instil a culture of business process excellence and continuous improvement. We believe process improvements are a key part of any ERP implementation as the business looks closely and questions the current ways of working. The inherent best-practice workflows within the ERP solution act as a comparative benchmark. Once implemented, the ERP solution’s standardised workflows and information visibility supports scalability as the business grows in volume and complexity.

Productivity and cost reduction, combined

Maximising productivity and cost reduction in a production environment go hand in hand. By having all the relevant information regarding sales orders and the quality of raw materials available, coupled with production information including Class 1 yields and waste, the operation can pinpoint opportunities for potential improvements. Fresh produce ‘does not do rework’; we have one chance in transforming raw material into the final consumer format without damaging or taking away from how nature intended us to enjoy it.

Timely business information

There’s a multitude of internal metrics for monitoring business operations, but unless we measure and track our performance against what contributes to customer satisfaction, there is an argument that we are wasting our time. If on-time and full deliveries to the prescribed technical specifications are deemed a critical metric to our customer, any measurement or data collected should ultimately contribute to achieving these goals.

Key operational data is all around us. In most cases, it is a by-product of our daily operational transactions and processes. By having all key business processes in a central ERP system, we can harness this data and present it as valuable business intelligence, giving consistent timely information to the business in order to make key decisions. At best, traditional paper-based systems simply cannot be relied upon to keep up with the speed and ever-changing nature of data in the modern fresh produce supply chain.

ERP configured for best practice

KS ERP offers pre-built configuration for fresh produce industry best practice, and operational business intelligence tailored to its unique requirements. This is the starting point. From here, a business can look at ways to improve upon these practices while confident they meet traceability and food safety compliance requirements. This matters because while the industry is focused on reducing costs and maximising productivity, recent product recalls and food scares show us that product quality and compliance are to the fore of consumers’ minds.

Implementing an industry-specific ERP system creates the foundations for process control, automation, increased visibility and scalability that are critical to any fresh produce business on a journey to operational excellence.

 

Paul Stynes is a Senior Project Manager at Keelings Solutions ERP, a provider of complete ERP software and expert consulting services to the fresh produce industry.

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You can reach him on:

https://www.linkedin.com/in/paulstynes/

Paul_Stynes@KeelingsSolutions.com