With the launch of Dynamics AX 2012 it is no longer automatically just SAP or Oracle on the wish list of the CIOs at the largest food producers.
Through the acquisition of a number of vertical solutions and the increased functionality in the new release of Dynamics AX, Microsoft’s Product Marketing Manager Per Christensen believes that 2012 will be a year of great growth - for both Microsoft Dynamics and food production companies that invest in the solution.
“Our solutions offer the right functionality, enable access to critical real time data and help ensure the best practice processes are in place that are necessary for food producers to improve their operational efficiencies and grow, both locally and globally,” says Per Christiansen.
Complexity is a big challenge
The signs are that there will be increasing future growth in global food production with the economic rise of the emerging markets - especially Asia. In China for example 27 million people a year are moving into the consumer spending middle class. The Food and Agriculture Organisation of the United Nations has calculated that there is a need for an increase in world food production of up to 70 per cent by 2050.
However the food market conditions are both complex and challenging. The growing demand for food in 2007 and 2008 triggered raw material shortages that led to rising prices, ethical market challenges and popular unrest and protests in several countries.
This means that the pressure on the supply chain grows. It becomes harder to obtain raw materials because of the scarcity of land and water, especially in developing countries, and there will be an even greater focus on how technologies to increase yields.
Per Christian believes that the food sector has a number of increasing complexities to deal with including:
- Differences in legislation from country to country and the increasing regulation and focus on food safety
- Large differences in attitudes to genetically modified foods and pesticides in the different markets
- Greater need for product differentiation and a shift from products to more service-based offerings
- Increasing need to optimize demand planning, distribution logistics and automation of production.
Therefore food producing companies must search for methods of operational efficiency, reducing complexity and staying competitive.
"We need to reduce this complexity through better transparency in the supply chain, tracking of ingredients, greater utilisation of raw materials, improved yield control, total traceability, quality management and integration with the value chain. Much of this can be achieved through better IT and infrastructure" says Per Christensen.
"Food companies struggle with a lack of information, which makes it difficult to streamline processes and create greater transparency," he said.
Many food businesses, often because of mergers or complex global value chains, are running multiple disparate systems though out the organisation and therefore do not have one central repository of data.
That means, according to Per Christian, it is considerably more difficult to deal with the complexities of the value chain and decision making is often slower and made with inaccurate or out of date data. The solution lies not in the quantity of data but in getting access to the correct data and in a format that suits the individual. This is what we call role-based data usage.”
Traceability and shop floor integration
Food producers need to be able to connect the shop floor with the boardroom. To do this they require an overview of the whole business and to be able to make more informed decisions based on real time information. Organisations need to invest in an integrated database that helps them track every aspect of their business from the ingredients they use, to the performance of their machine's, to the sales that the make. It is through these measures that they will help improve the efficiencies throughout their whole global value chain and enable them to compete on a global stage,
"The business needs to be able to provide access to the exact information demanded by the management, regulators and business partners" continues Per Christensen.
Several business models
The modern food manufacturer today can often be both a producer, a distributor, a retailer, an online shop and a wholesaler at the same time. According to Per Christensen, these businesses therefore need an ERP solution that can support the operation and reporting on multiple business models, manage logistics, the integration with the supply chain, have the ingredient management meet regulatory requirements, ensure efficient raw material utilization and ensure effective quality management.
Gaining market share
Per Christensen believes that the launch of Microsoft Dynamics 2012 delivers even more relevant standard functionality "out of the box" and provides a more competitive solution for food businesses.
"In cooperation with our partners who have specific modules for food production, we will see Microsoft moving into market territories where we have not been before. I am convinced that we are well prepared with the answers to the challenges of food companies'.
Per Christensen, Product Marketing Manager, Microsoft
Per Christensen has 27 years’ experience in sales and marketing of ERP systems through work with international providers of ERP solutions - including the last five years at Microsoft as Product Marketing Manager for two of the most widely used ERP systems worldwide - Microsoft Dynamics AX and Microsoft Dynamics NAV.