When hearing the words ‘growing a business’, many executives think of selling more, and thus seeing larger profits.
While that is certainly part of it, growing a food production business requires additional strategies for coping with larger volumes of both raw materials and the finished product. You also need to consider how your food production business will deal with a higher number of sales, the expansion into new markets, and potentially new product lines.
Food production companies are thus in a unique position, as some of the raw materials are bound to be fresh produce, and finished products will have expiration dates. The process of growing a food production business then, is in a way even more complex than other businesses due to common pitfalls experienced through lack of planning.
Optimizing supply chain efficiency
When a business is growing, supply chain will be affected. Additional raw materials need to be sourced, and more goods are produced and stored in the warehouse. As a food production business grows, some products may need to be produced at higher rates than others.The challenge for a food production business dealing with fresh products, is managing the amount of raw materials being kept in storage ‘just in case’ they are needed. This could rapidly lead to dead stock, which is stock that can no longer be used or sold because it has expired.
It is therefore essential that businesses quickly respond to changes in demand, as not doing so may lose customers and slow business growth. Companies that rely on ‘gut feel’ to make these important decisions often experience poor outcomes leading to poor ROI.
Some companies do rely on data to make these decisions, however, getting hard data through IT can take days or weeks, and by the time a report comes through, it’s no longer relevant. Business intelligence, however, can provide instant access to relevant data within a few simple clicks. It allows insights into emerging trends that may not have otherwise been discovered.
In optimizing supply chain efficiency, it’s important to remember that you too are a customer when it comes to sourcing raw materials. As your demand changes, will that affect businesses trying to adjust to your new requirements?
While a distributor might usually have excellent service levels, they might struggle to deliver a certain request at some point. By using Phocas to analyze your distributors, you can uncover trends and/or inefficiencies that may in turn affect your performance. Once you can identify these trends, you can quickly respond by either finding other sources of your needs, negotiating a better deal with your existing supplier, or another way that will reduce the impact on your bottom line.
Adapting your sales strategy
With a supply chain ready to respond to changes in demand, sales teams can be confident that customers will receive their products on time. With more sales, however, there will be a need for additional sales staff.
Managing a growing sales team can be a challenge for many sales managers who may struggle to keep on top of new and existing sales reps’ performances, while continuing to perform their own daily tasks.
By using business intelligence to examine sales numbers, value of sales, product groups sold, and which sales reps are exceeding and/or falling short of KPIs, a sales manager can identify who might need additional training, and who could potentially pass on sales tips and strategy expertise.
While a manager with specific technical knowledge could spend days building and refining reports straight from an ERP or CRM system, Phocas enables you to drill down and see results instantly. Build immediate reports with specific data and divide them by sales rep, region, product group, and more.
Food production companies also find themselves in a unique position where cross-selling and up-selling can significantly improve profits. While it is natural to assume that a customer purchasing pasta would also purchase sauce, the opportunities do not stop there. Have they tried your new pesto? Or perhaps they might like to try a new, organic premium grade pasta that is currently selling well.
These opportunities are easy to find with business intelligence, and you can even use the provided data to back up your sales argument. “80% of our customers are currently purchasing this product” definitely sounds more convincing than, “Many of our customers are currently purchasing this product”. Facts lend credibility to your decisions.
The role of the executive
Executives in growing businesses are busy people. With long work hours and trying to fit in at least a few hours with friends and family, time is precious. Reviewing large reports and hard-to-understand spreadsheets can be time consuming and annoying for a business leader. But there is another way. A Phocas business intelligence dashboard allows users to review the easy to understand information on any device, at any location. A dashboard, in short, gives you a simple snapshot of how your food services business in performing on-the-fly, and in real-time.
You can see how operations are doing, how sales are performing, the success of particular products, and so on. This frees up your IT staff to focus on other core business, and means the information is in your hand whenever you want it.
Would you like to learn more about business intelligence for the food industry, and how you can use it to measure and optimize performance? Download our free eBook ‘Key metrics in the food & beverage industry’