F&B sector uses IT to gain competitive edge

by Sohini Bagchi    Sep 10, 2012

FB sectorLike every other industry vertical , the food and beverage (F&B) sector in India is going through a major transition today as far as IT adoption is concerned. The large enterprises in this segment have already adopted IT applications and processes to create new business capabilities and compete in the national and global markets. However, in recent times, several mid-sized entities have also joined the IT bandwagon to streamline business operations and enhance product quality and delivery.

A recent event on the food and beverage industry held in Kolkata showcased some of the new technology developments and innovations in this segment, especially in the mid-market segment.

Small and mid-sized food manufacturers and processors today are realising the importance of IT in increasing their bottom lines. Most of them have some form of ERP system in place to track and mitigate wastage and integrate various functions.

“We have implemented an in-house ERP system to improve visibility in our business processes. The solution not only helped us increase operational efficiency but also lowered total cost of ownership by cutting down implementation time by more than 50 percent,” said C Selvan, a senior IT manager at SAI Food Products, a food and beverages company in Kolkata.

Today more and more food and beverage companies are relying on effective supply chain management (SCM) solutions to automate their supply chains or networks.

“Several factors are driving the adoption SCM in food industry – the primary one being cost advantage. Secondly, with increased competition, processes are required to be fast, flexible and agile and SCM can play a decisive role here,” said DK Bhutia, Director at Alpino Dairy Products and Organic Foods. He adds that food manufacturing companies can increase their operational visibility if they consider SCM a corporate priority and deploy these solutions that deliver real-time visibility across the entire supply chain.

Cloud computing is also driving changes in the industry, says Selvan. Earlier in order to manage IT systems, food manufacturers had to buy hardware and software and hire professionals. “For small food manufacturers like us, this was always an expensive option, especially because this is a low margin, highly competitive marketplace. But cloud computing is changing the way we do business,” he says.

Bhupindra Singh, Managing Director of Delhi-based HCS Enterprise that manufactures bakery machines says that with cloud computing, companies can respond to the changing business requirements even better. “Cloud-based solutions enable us to focus on our core business without worrying about the traditional IT management concerns including system upgrades, system integration and database management. This gives us a significant competitive advantage,” he explains. He believes that other areas where food manufacturing companies are focusing on include material handling management and warehouse management system to save operational expenses.

Food technologist and security expert, Mohit Reddy, indicates that even though the food and beverage industry is coming of age and adoption of newer applications and processes have increased from the past, they should increase their focus on compliance and also the overall equipment effectiveness that accounts for better performance and quality.

Reddy believes to ensure continuous product innovation and enhanced consumer relationships, food manufacturers should use solutions that allow real-time shop floor control and electronic document control. Cloud computing and software as a service can also lead to much better decision-making and help companies gain competitive advantage.