The time to transform your food and beverage business’ processes to digital is now. Inexpensive smartphones, tablets, and ubiquitous Wi-Fi connectively make digital transformation easier than ever before. And the rewards are considerable, particularly for the food and beverage industry.
Starting your digital journey or extending your existing digital footprint is a surefire way of saving costs, improving productivity, and ensuring compliance with newly mandated U.S. Food and Drug Administration (FDA) rules. It also makes it far simpler to sell product to companies participating in the Global Food Safety Initiative (GFSI).
With the FDA demanding companies in the food and beverage industry to digitally audit their products and production processes, and successfully track and trace products from lot to lot, digitizing operations and workflows has become essential. Certainly, the potential fines facing non-compliant companies from 2026 are concentrating minds and increasing the appetite for change.
Digital transformation offers numerous benefits for companies in the food and beverage industry, including:
- Lower costs
- Improved efficiency and productivity
- Simplified, more automated processes
- Easier and more effective training
- Greater business flexibility and future proofing
- More business transparency
Legacy systems are problematic
Suppliers that use aging technologies like faxes to communicate, or those that rely too heavily on physical paperwork, are not only at risk of failing to comply with the new requirements, but they’ll likely face higher costs and inefficiencies as well. Consider, for example, the time lost when having to manually retype and re-enter data, check and recheck inputs, or catch and correct errors.
Many of the larger companies operating in the food and beverage industry are the result of mergers between smaller companies, each with their own legacy systems. By leveraging modern technology, it’s possible to streamline processes and improve efficiencies across these different enterprises. Digitalization helps to reduce complexity and increase transparency, thereby making economies of scale and simpler, more accurate reporting possible.
Streamlining and unifying workflows
The training demands on individuals who are forced to use non-digital systems are also significant. With different, inefficient systems in place, employees often have to grapple with several varied workflows across multiple systems and try to understand how they interact with each other.
To the uninitiated, legacy systems that are the result of merged companies can seem like ad-hoc solutions to individual problems that are cobbled together in a workflow. By embracing a coherent, fully digital workflow, training requirements are simplified and workflows improved.
Future proofing your business
There is also the opportunity cost of not moving to a fully digital system. Large, multinational food and beverage producers that are part of the Global Food Safety Initiative demand that their suppliers have annual audits. These blue-chip companies insist suppliers can prove their products are fully traceable lot to lot.
In the years ahead, companies harnessing digital tools and data will also be able to merge it with publicly available data using artificial intelligence (AI) systems. This exciting new technology will help users spot market trends and opportunities – ultimately helping them gauge what to make, what to sell, and what will be more profitable.
But this will only be available to companies which have their own data to feed into their own AI models. Companies that embrace data will be able to produce electronic simulations of their products and processes. These can be used to accurately estimate the cost of producing and supplying a new product without buying physical ingredients or taking machinery out of production.
Digital doubles
In much the same way that Formula One (F1) racing teams use data from transponders fitted to their vehicles to assess and analyze every facet of their race, companies in the food and beverage industry with digital data will be able to see how their processes, factories, and equipment are handling the demands placed on them.
Just as F1 teams use computer modeling to see how to set their vehicles up to perform consistently, food and beverage companies will be able to see how their processes are likely to perform within agreed tolerances.
Improving workflows
Digitizing processes makes a business far more efficient. An integrated digital ordering, warehouse management, production, and accounting system will receive an order. It will know that newly made product has a shelf life of 180 days and have an age profile of the products in the warehouse. If it can deliver the order from existing stock, it will do so.
If the client demands that it is only supplied with products under 20 days old and there are none in stock, it will put an order into the production system. It will fit this into the most efficient place in the production list while meeting the customer’s requirements.
Once the production order is activated, the fully digital workflow will monitor the ingredients used in a recipe, the energy, and the time needed to mix the ingredients into the final product. This information will be fed back to the buying department as well as the cost accounting function to monitor the cost of production for each lot of product.
A digital production process will select the appropriately sized containers for the delivery; generate the correct, compliant labels for the container and product; and note the storage position in the warehouse for dispatch directly to the customer.
All of this can be done without human intervention.
While the digital workflow is monitoring the production process, it is also storing information about the ingredients, the conditions used in production, and all the other processing steps. This ensures full transparency and lot-to-lot traceability, which is necessary to comply with U.S. FDA and GFSI requirements.
This data is also available to the producer who can use it in a time series to see how slight formulation or processing changes add up as time passes, or to see if there is a way to make the product more economically to potentially increase profitability.
Certainly, there is no better time to transform your food and beverage business and go digital. The technology, connectivity, and systems are all readily available – and bring with them the opportunity for greater profitability, improved efficiencies, and complete transparency.
If you want to find out more about Datacor ERP and how it can benefit your food and beverage business, get in touch.
Frequently Asked Questions (FAQs)
What does digitalization mean for F&B businesses?
Taking your business digital moves away from uncontrolled, manual, and paper-based processes to a more controlled system that offers automation, greater visibility, and improved workflows.
What are some of the main benefits?
A digitized business will be more efficient and improve productivity. Users can also benefit from lower costs, more flexibility, increased transparency, and simpler training requirements.
How do I know if my legacy system needs to be replaced?
This blog highlights the six telltale signs that you may need to consider a new, more capable ERP.
How can software address FDA regulations?
In this blog post we outline five critical software features to navigate FSMA 2024. The FSMA 204 Final Rule was first introduced in January 2023, although companies have until January 20, 2026 to comply.
