Food & Beverage Leaders Realize that Suppliers Will be the Key to Success

  • Nick Castellina
  • Oct. 06, 2015
  • Modern Manufacturing

The introduction of the Food Safety Modernization Act (FSMA) caused major changes in Food & Beverage manufacturing.  Manufacturers are focused on food safety and traceability as well as how their organizations will have to handle ongoing issues. Even though this bill was signed into law back in 2010, companies today are still scrambling and working on complying with the continually evolving mandate and others like it (Figure 1). With these new mandates coming into effect, it is not a huge surprise that compliance is becoming the top pressure for Food & Beverage manufacturers. But it is telling to see how far down of a priority cost reductions have become (22% of respondents). The message is clear: compliance and keeping their customers happy is of top of mind for the industry as a whole.

Figure 1: Compliance and the Customer Driving Food & Beverage to Focus on Quality

The main goal of FSMA was to shift the thinking of companies from limiting the scope of contaminations to preventing them from even occurring. This shift in priority in turn implies an in the Cost of Quality for Food & Beverage companies. However, when we examine leaders among F&B companies (see sidebar) we see that there are those out there that still do a great job of limiting their COQ. The question then begs to be asked, what is it these companies are doin­g to limit their costs while ensuring high quality?

While Aberdeen research has consitiently shown that becoming a Leader takes the right combination of business capabilities and technology enablers, lets take a closer look at the strategic focus for the two groups among Food & Beverage manfuacturers to see if there is answer (Figure 2).

Figure 2: F&B Leaders Stress Compliance and Supply Collaboration

Both groups have a strong focus on building in compliance and traceability into their production systems, which is an important focus itself. But two different secondary goals appear. Followers still want to focus on the responsivness to non-conformance (being almost twice as likely as Leaders to put this strategic action in place). Obviously, it is important to be able to respond quickly to any quality issues that may arise in order to limit the extent of a problem. But Leaders emphasize that the more successful action is to stop a quality issue from occuring in the first place, a practice FSMA is designed to push industry wide. Leaders have identified their supplier base as an area that is crucial to quality performance but often overlooked. By treating suppliers as strategic partners both groups can strive to continuously improve. This focus allows Leaders to not only meet necessary compliance mandates, but offer their products as lower costs, greatly improving their chances for success in a highly competitive industry.

About the Author

Nick Castellina, Senior Research Analyst, Business Planning and Execution, Aberdeen Group

Nick Castellina is the Research Director for the Aberdeen Group’s Business Planning and Execution practice. Castellina joined Aberdeen in 2010; with his primary research focused on the use of Enterprise Resource Planning (ERP) software. His enterprise applications research explores how ERP is used differently across industries, and how it can apply to all roles within the organization. To round out his research practice, Castellina leads yearly studies on Enterprise Performance Management, Business Process Management, Professional Services Automation, and project management.