Dairy producers looking to technology to help secure business in unpredictable market

By Pat Saundry, Head of SMB, Oxygen on

Business change can come from within an organisation – in the form of product developments or new acquisitions – or it can come about as a result of external pressures. A changing regulatory framework and anti-competitive behaviours are examples of outside forces that are currently driving Australasian dairy manufacturers to focus hard on their production, processing and packaging activities.

Any smart organisation sees change as an opportunity to do things better, which is why such a high value is placed on technology. The right application of technology often provides an immediate solution and can be a catalyst for even further business improvement.

Australia and New Zealand produce some of the best dairy products in the world and over the last decade their export markets have grown as China’s demand for infant milk formula, butter and cheese has rapidly increased.

But in the last 18 months dairy manufacturers have had to cope with some unforeseen problems. Counterfeit food scares and a tightening of importing regulations by Chinese authorities have put the whole industry on notice. Several companies have been handed bans on exporting infant formula by Chinese authorities who have cited labelling and food quality concerns. With China running prominent campaigns to encourage consumption of locally made goods, dairy industry players are having to act quickly to differentiate their products or risk losing future revenue streams in what is a competitive and volatile global market.

Volatility in one industry often fans the flame of another and is one reason why there has been an uptick in activity in the ERP market – dairy producers want to meet these new challenges and are actively looking for new business management software to help them achieve it. The need to better manage supply chains, quality assurance and implement better consumer safeguards are driving manufacturers towards world class software solutions – SAP Business One being one of them. This mid-market offering from SAP is an integrated management platform that gives dairy companies greater visibility of their business and tighter control over processes on the factory floor.

New Zealand and Australian companies are progressive when it comes to using technology and armed with the right software they are well placed to wrestle control over global value chains and meet customer demand for healthy, traceable dairy products.

Oxygen has been fortunate to work with one dairy producer that has been leading the pack in finding innovative ways around product counterfeiting and providing customers with a ‘paddock to plate’ authenticity of ingredients. Beston Global Foods is re-platforming its company on SAP Business One using a rapid implementation methodology called Fast Forward. In doing so, it has managed to get two Australian factories up and running in six weeks and it is now rolling out the platform to its operations in eight countries around the world.

Along with better business visibility, SAP Business One is helping Beston reduce business risk by preventing human error. The software ensures Beston’s quality assurance practices are strictly adhered to with no stock able to leave the factories unless all quality assurance testing has been completed and approved.

It is also working to ensure it can trace its products once they arrive in their destination market – helping minimise the counterfeit activities which have caused Chinese authorities to tighten import restrictions.

Beston has introduced sophisticated anti-counterfeit and traceability technology, called Oziris, integrating it with its new SAP platform. The two solutions work together to offer customers 100% safe and authentic produce, traceable down to its raw materials and processing details. It is an innovation it will be rolling out to its seafood, meat and beverage verticals as well.

SAP’s ability to improve financial processing and auditability is well known, but it also has line-of-business functionality, such as material requirements planning, that can give producers greater control over the sourcing and consumption of raw materials as well as production processes. It is this type of factory oversight, together with IoT enabled devices that provide vital feedback about supplier and consumer activity, that dairy producers need to ensure they don’t run foul of export rules and continue to stay ahead of fickle consumer trends.

Want more?

If you would like to find out more about SAP Business One and how it could help your dairy organisation, please don’t hesitate to contact us.