Fighting food-cost inflation with back-office automation
Achieving success and profitability in the food manufacturing industry has never been easy. The disruption to supply chains and the workforce throughout the pandemic made a challenging sector even more difficult.
Add to this a recession in 2022, continued turmoil and tighter margins, and it can seem like there is no end to the gloom in sight.
However, the most challenging times also provide us with an opportunity and impetus to urgently rethink, reimagine, change and improve operations.
But change is difficult and can be fraught with risk; there is a tendency to make small incremental changes and improvements rather than wholesale transformations.
Keys to Driving Efficiencies
For example, assuming you can afford it, there will always be a logical business case to acquire more efficient freezing, drying or packaging technologies. On the other hand, re-engineering human manufacturing or back-office activities can appear to be overwhelming projects that are best avoided. In reality, however, these are often the projects that should be prioritized, and when approached correctly, they are typically low-risk yet high-value.
To put it another way, the rigorous discipline and efficiencies applied to the food manufacturing process should also be used to support human back-office processes.
Automate Repetitive Tasks
Take the topic of automation, for example.
In the food manufacturing process, we automate any activity that is done the same way every single time, be that baking an item at a specific temperature for a particular time or filling a container to a precise volume. That logic can and should be applied everywhere in your business.
For example, if you have a worker in your back office who updates an address field or quantity in a desktop system and then manually keys that information into another system or spreadsheet, that activity can be automated.
Such seemingly trivial and low-value manual activities are costly, error-ridden and typically far more numerous than you might expect. Even small firms commonly uncover dozens of such repetitive tasks, all of which can be easily and quickly automated. In fact, we will go as far as to say that automating repetitive tasks is one of the best returns on investment any firm can make.
The technology to automate repetitive tasks is readily available in the form of robotic process automation (RPA), which works well and is incredibly affordable. But only over the past couple of years has technology like RPA been used regularly. The reason is simple: few managers or owners have bothered to give such tiny activities the importance they deserve.
Automating repetitive manual key entry tasks should be a priority for any firm, large or small, as it is one of the most accessible technology projects you can undertake, and it delivers surprisingly significant improvements. When it comes to improving your business operational activities, we always advise our clients to start by identifying repetitive tasks that can be automated.
Automate Document Processing
Another area of back-office operations that is often overlooked or misunderstood is document-processing automation. Food manufacturing is a world of documentation in the form of bills of lading, invoices, certifications, reports, purchase orders — and the list goes on. Yet few of the processes related to these documents are automated; rather, they are almost always manual.
Even firms that claim to automate accounts payable activities have often only automated a small part of that overall process. Automating document processing is something every firm should look at, as this technology has advanced massively over the past decade. For example, technology to read and understand the content of documents typically works faster than a human and — maybe more importantly — is more accurate than a human reading and interpreting the scope of a document.
Automating document processing reduces errors, disputes and unnecessary returns; it ensures compliance and quickens order-to-cash activities. In short, automating document processing can increase profitability and efficiencies, and make your business more effective.
Automate with impact
When the food manufacturing industry talks about technology, it is typically excited about manufacturing improvements. Be it the move to robotics or embracing innovative new proteins and plastic-free packaging, such advances are sexy and exciting and understandably grab executives’ attention.
It’s much harder to get excited or generate internal awareness around tackling repetitive key entry work or automating document processing, but this is where the money trickles away; it’s here that inefficiencies and errors mount up.
Our advice is that this is the place to start.