A paperless world

Proper investment in IT can be even more critical during a recession, as companies struggle to save money. Adam Baker finds out more

During a recession, investing in technology can save time and money, giving companies an edge over rivals, but they still have to be willing, or brave enough, to make that investment. And what are the real advantages of the latest software?

The good news, say IT companies is that there is still investment in the downturn. Stephen Mumby, director of Innovation Software, which has just completed a project with the Meat Hygiene Service, says the Grimsby firm is as busy now as it has been in the last two or three years. And other IT specialists agree. "We have seen investment specifically in specialist software modules for product cost modelling and process planning," says Systems Integration MD Rob Stephens. "These are all value-added products, designed to reduce costs and increase profits through better understanding and management."

DATOS Professional Solutions commercial manager Gareth Morrison adds: "At present, all investments have to show a quick return - and if that is shown, then people will still invest. IT is an integral part of the food industry, providing control of your business, as well as information to help identify any strengths and weaknesses."

Meanwhile, West London-based Paradigm Westminster Consulting director Steve Poole says IT systems save time and money, enabling an organisation to expand using existing staff - or without having to employ proportionately more.

In the US, SignalDemand CEO Mike Neal says: "Whenever a system can create immediate cost savings or improve profitability, businesses are interested. Advances in technology have made web-delivered software applications available to meat production companies. These software-as-a-service solutions offer a much more cost-effective alternative to investing in IT infrastructure, as well as purchasing and maintaining software. So yes, people are still investing in IT."

But what does IT actually do that saves money? Stephens argues that, with real-time tracking, IT can dramatically reduce the time and the number of people it takes to collect, evaluate and act on information from the production line. As an example, he cites one company where sales analysis used to take a full day and now only takes quarter of an hour.

IT can also improve performance, says Stephens. "The biggest impact IT makes is giving a company real-time information from all parts of their factory. Production directors can follow performance and identify problems. Financial directors can forecast profit in real-time, sales directors can respond to changes in production to maximise new sales opportunities, and managing directors can review the whole process from their desktop computers."

Stephens reckons IT can be further developed, so that companies can store information remotely. "The future lies in 'cloud technology', where a company will have its software services hosted remotely by specialist companies," he says. "This means they do not have to employ expensive local expertise and can invest in new software modules with minimal set-up costs."

Yet DATOS' Morrison suggests that the obvious immediate advantages of IT to meat companies are traceability and hazard analysis and critical control point (HACCP) management. Morrison says that most meat industry executives will say their documentation requirements represent their biggest problem. "IT should solve this, but has only partly done so in the past. The pork scare in Ireland last year and the high-profile television programmes, highlighting the treatment of animals through the slaughtering process, have increased public awareness on this issue. The need for complete, accurate, clear traceability, from birth right through to point of sale, is now essential to maintain integrity in the meat industry."

Last year, DATOS introduced a new office system called 'Season', which it says handles telesales, sales order processing and price management and also offers a solution for all stock management and traceability needs. The company is now working on a 'Recipe Formulation System', soon to be deployed to a customer in the US, helping firms deal with all their recipes, ingredients and stocks, both in the office and the factory. "Our scale integration software is also being released this year and is receiving enormous interest," adds Morrison.

In today's business models, says Morrison, accurate, relevant information is key to success and the right IT systems provide this. "This information is crucial in minimising costs and maximising profit - for example, by identifying the products and customers that are the most profitable or by increasing overall efficiency and reducing paperwork."

In the current environment, managing dramatic daily meat price fluctuation to maintain profit margins can be a time-consuming business and difficult to achieve accurately, he says. But an IT system will handle this more quickly and easily. "Also, IT has moved on to the factory floor on touchscreen terminals and handhelds, and also on to PDAs out on the road, meaning data capture is fast and easy and all the relevant information is available to all staff at the touch of a button. This provides a massive improvement in efficiency in the factory, throughout the sales and delivery processes and cuts administration time drastically."

Planning enterprise

Paradigm Westminster Consulting's One Office 3000 suite of modular enterprise resource planning (ERP) software covers all aspects of the supply trade, from sales order processing and invoicing to stock control. Director Steve Poole reckons that most firms are using IT now, but may not have the most up-to-date equipment. "Very few companies of any size do not employ IT in some form or another, but it is often those early adopters of IT, which are still running on very old 'legacy' systems and could benefit the most from an update. Early computer systems often addressed just the core financial applications and have often developed with lots of little applications, such as Excel, growing alongside them. This can lead to duplication of effort, with on person in accounts keying information into an Excel spreadsheet to keep it up to date, and another in sales keying the same data into another spreadsheet or database. This is clearly a waste of time, with the attendant risk of having data entered incorrectly, possibly in both cases. Modern IT systems are integrated. All data required is captured at source and placed where it can be used by all who need it."

Outdated IT systems are also unable to deal with the complexities of meat products, Poole says. "There are difficulties when dealing with two units of measure - typically goods being ordered by the customer in units such as boxes but invoiced as catch weights. This is one area where manual intervention was necessary, but which modern IT systems cope with easily."

Poole says efficient stock control is another area where IT can save costs, enabling companies to reduce stock holding to the correct level, so that finance is not tied up holding redundant or slow-moving products. "If tied in to purchase ordering, the system can suggest the requirements," he says. "Also, by offering trend analysis, IT can assist management in determining the correct buying pattern."

Calling America

There is still a feeling that the US leads the way when it comes to IT for the meat industry, as there is much more investment there. San Francisco-based SignalDemand's CEO Mike Neal has become a member of the board of directors at the American Meat Institute for a three-year term. He reckons that having access to accurate and comprehensive information is critical to making intelligent decisions that drive profitability. "When a software solution can put the right information at decision-makers' fingertips, providing objective analysis and guidance to help with decisions such as pricing or product mix, you can fundamentally improve the profitability of a meat company," he says.

Neal believes industry-focused computer applications have changed the way organisations handle information and make decisions. "Specialised software can crunch data and provide highly complex analysis much more quickly and accurately than ever before," he says. "For example, a software application with the right input information and mathematic algorithms can determine the optimal price range for a customer contract, based on costs, volume, and price elasticity, in mere seconds."

SignalDemand recently introduced the next generation of its price and mix optimisation platform for meat manufacturers, said to support more profitable customer negotiation, by drilling into the information underlying a price recommendation.

WORKING MODEL

The ability to take paper records out and bring a computerised system in can have a big impact on accuracy and efficiency and help cut costs, one company claims.

Applied Principles has introduced its Quality Manager and Issue Manager systems, which can replace paper recording on the factory floor with a high-tech PDA computer. The system allows QA staff to carry out real-time checks on products and instantly flags up issues and prompts staff on what to do next. This means issues that might have taken a while to get to a manager on a paper system can be highlighted instantly, says managing director JJ Kotze, who adds that the software system can be tailored to suit any business. "If you are measuring temperatures with the PDA and they are out of specification, it can send an email alert out - it will also prompt the user to take action, such as notify a manager or rectify the problem by following a series of prompted steps."

Managers can also review the work carried out by the shop floor staff and double-check problems have been correctly rectified. Essentially AP's system allows the business to react much faster to quality control issues, saving time and money. "It can help to ensure you get a right first-time culture within the business," adds Kotze.

Lynn Farrelly, quality and food safety manager with the Carton Group, an Irish chicken processor that has switched to the AP system, says: "It has saved us a lot of time; having everything you need on one PDA means you can do more checks. The paper system was much more time-consuming."

She says the system will also allow the business to track trends, to see where regular problems are and address them, thus giving its customers confidence in the business. "You don't have the time to go through things like that on paper, but when it is computerised, you can check it at a glance."

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