The future of the food industry: greater integration
collaborate more in the future if they wish to remain competitive,
predicts electronics giant Siemens. But the good news is that the
technology to achieve complete systemic integration is finally
here,writes Anthony Fletcher.
Stringent legislation, consumer concerns about food safety and growing pressure from retailers have forced food manufacturers to look at every possible means of ensuring traceability and efficiency throughout the supply chain. Out of this has emerged the concept of a Manufacturing Execution System (MES), which describes what the industry needs to put in place to achieve all this. But what exactly does MES mean?
"It has meant a lot of things - tracing and tracking, product specification - but developments last year have helped to define the concept," Matthew Holland, MES product manager for Siemens UK, told FoodProductionDaily.com. "The ISA S95 standard states that in broad terms, MES is the integration between business systems and plant control systems. As you can imagine, the gap between business systems and plant operations in the food industry has varied from small to large."
Holland stresses that MES is in its early days, and that the importance of the concept is that it recognises the interconnectness of the food industry. It suggests that closer collaboration between every aspect of the food supply chain is inevitable. There has historically been a big gap in the food industry between business systems and plant operation systems, but Holland believes that things are moving in the right direction.
"In general, IT and finance have been very close. There has also been a lot of expenditure on business systems in recent years, which was carried out to cope with the boom of business to business transactions a couple of years back. Now manufacturing is getting its act together with suppliers."
This gap, between business systems and plant systems, is closing all the time as companies integrate their operations better. Holland identifies a number of key factors behind this trend.
"A major driver of MES is the pressure from retailers on manufacturers. Manufacturers have to be able to react quickly. A good example is RFID. If this enabling technology is to work, then it has to work at both the manufacturing and the retail end.
"This is the Wal-Mart effect - big retailers driving forward RFID. But you need the systems in place - the technology is only as good as the systems you have in place."
Legislation is another big driver. The recent US Bioterrorism Act and forthcoming EU legislation on traceability have added to the pressure on manufacturers to get their house in order and be able to trace products right through the chain. The problem, according to Holland, is that there has been a lack of investment in this sector; technical upgrades have tended to be carried out on a one-off basis and there has not been a strategic approach to MES as yet.
"But this is now happening on the manufacturing side, through tracking and tracing, through closer collaboration with retailers," he said. "The big issues now are GM foods, obesity, food scares, and over the next few years we will see tighter control over processing and packaging. And in turn, customers are happy to pay extra for guarantees of food safety."
It is therefore in both the manufacturer's and the retailer's long-term interest to work together and invest in a system that can trace products from start to finish. The cost of compensation or a product recall means that the cost of installing MES is less of a factor than it ever was.
"All these drivers mean that if you can put a system in place that will enable you to act react better to demands, make your manufacturing process more agile and make you better suited to retailers and consumers, then you will. A good example is Coca-Cola - a few years back the company was forced to issue a recall after wood preserve seeped into a vending machine. This cost them over $100 million, because the system was not in place then that could trace the product back quick enough."
But Holland believes that the technological capability to achieve complete systemic integration is now in place. This is down to technological development, but also because of changes to the market place.
"There has been huge amount of investment in the last few years on the technical side of things," said Holland. "Siemens for example has made a number of acquisitions, which has helped the company to react quickly. We have bought specialists that mean we can integrate a whole solution. For us this allows us to operate more quickly and it clears up the field."
The first part of Siemens' MES solution is functionality. This involves installing software to enable practical tasks such as lab testing, product specification and traceability. The second part is the framework, which allows this functionality to work together.
"What drives world class manufacturing is not the software as such, but procedures. You can have manual procedures, for example, which are perfectly workable - but the problem is time. Our system is procedural driven, and puts into electronic format those procedures. This drives the functionality."
Holland says that the concept of MES is really very simple. "We're not really talking about IT software here, but procedures, and how to driving these electronically. And it's about exceptions - if people never made mistakes then they'd never need these systems," he adds.