CHALLENGES
PErspective
It is my firm belief that the Food & Beverage Industry are being mis-led and indeed confused by industry bodies and technology providers as to exactly what Industry 4.0 is, and the benefits that Digitalization can bring to a business.
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Industry 3.0 was already successfully implemented across businesses. The adoption of automation technologies, visualisation systems, and even information and reporting systems has been around for many years, however in most cases these technologies were implemented in “silos”, including ERP which was rolled out for the benefit of Finance. Automation was rolled out in islands, benefiting process and packaging areas, often highly automated, but in isolation. Limited collaboration occurred between systems, and indeed the internal organizations, leading to gaps, complexity, waste, inefficiency, and at the extreme, lack of real business intelligence when looking across the complete value chain. Adding in sustainability programs to the mix brought even more complexity, as it is often treated as a separate topic, whereas in reality it is completely intertwined with the need to digitally transform.
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Digitalization must focus on fixing these challenges and gaps. Which means that Digital Transformation is not only about vertically integrating the business (i.e. asset intelligence in the cloud), but also about horizontally integrating the value chain (i.e. seamlessly integrating systems and processes from field to consumer, sustainably). To do this, two key criteria must be followed to ensure progress can be made effectively:
Organisational
change
Organisations are traditionally siloed. Technology has followed suit. To horizontally integrate a business, collaboration must be enabled across all entities, meaning business processes, KPIs, awareness of upstream / downstream and impact from decisions. For example, “Conformance to Schedule” may be a KPI for Operations, but if to attain it means less flexibility to support Marketing with new Products, or causing working capital headaches for Finance, the business value is not being fully realised. Collaboration must occur at all levels, across both humans and technology.
focus on the use cases
Almost every Consumer Packaged Goods company is talking about technology when it comes to Digitalization, rather than the use case they are trying to address. Hence the approach ends up becoming a lot of cost, with little to no quantitative business value. This problem is being exasperated by the technology companies who position their systems as being able to “do everything”. Companies must identify multiple use cases, ensuring they are all in some form of alignment (as there can be many, small to large, key is they all connect at some stage), and only then, identify technically how to accomplish them. It is difficult to get suppliers to work in this way, as they always lead with a “solution seeking a problem”.