- October 18, 2016
- Posted by: Tom Ryan
- Category: Vendor Profiles
For many Food & Beverage Enterprises, technology solutions are not all just about ERP (enterprise resource planning). Certainly the ERP is at the heart of the technology portfolio of any food or process manufacturer or distributor. In addition to the core roles played by ERP solutions, many other areas often are necessary to provide full support for the broad range of requirements that many F&B companies now face. We focus almost exclusively on the Food and Beverage industry. This focus has led us to develop a different view of the solution providers from the traditional analyst view of corporate size vs. vendor size and functional footprint. We recognize that for the F&B industry the solution set that an enterprise may need goes beyond just the core ERP system.
Our view of the ecosystem is as follows. We will start with those areas that are outside of what most ERP solutions can provide.
An additional note to what you are seeing below in the ecosystem graphics is that some vendors are in a box with another vendor. This is a typical pairing of the software solution with the systems integrator or value added reseller of that product. Many of the larger main stream products (e.g. SAP, Oracle, Infor, MS AX or Nav) build their solution generically without any specific industry focus. These companies often market their products through integrators or resellers. The value added resellers have added industry specific configurations, modifications, or work flows to the baseline generic product. Thus, it is the combination of the software product with the integrator/reseller that makes the solution F&B specific. When we lead software selection efforts, we advocate that we work with the resellers and their associated solution instead of just the software company. Do one examination of the team as a whole, since that is where the F&B content comes from, rather than choose a product and then go through another selection to choose the integrator/reseller.
Product Lifecycle Management (PLM)
In industry, product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from inception, through engineering design and manufacture, to service and disposal of manufactured products. The product life cycle is an important concept in marketing. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Not all products reach this final stage. Some continue to grow and others rise and fall. PLM solutions allow the development of and experimentation with a product, its raw materials, and its bill of materials (BOM) or recipe without cluttering the ERP system with product and material definitions that will never make to a saleable product.
Trade Promotion Management (TPM)
Trade promotion management (TPM) is defined as the process of planning, budgeting, presenting and executing incentive programs which occur between the manufacturer and the retailer to enhance sales of specific products. The Gartner Group believes that technologies related to managing trade promotions have never been more relevant, as the average revenue expended by manufacturers for promotions now exceeds 20%. More and more companies are leaving spreadsheets for automated technologies, while others are adding promotion optimization capabilities.
(see the graphic below)
Earned Distributor Reimbursement Management (EDR)
This is the food service distributor side of the trade promotion management process (EDR).
Food safety is a scientific discipline describing handling, preparation, and storage of food in ways that prevent foodborne illness. This includes a number of routines that should be followed to avoid potentially severe health hazards. Compliance with governmental regulations for reporting, tracking, recall management, and other processes has become increasingly difficult and complex. Solutions in this space help food manufacturers and distributors manage these processes effectively.
Transportation Management and Delivery Systems (TMS)
A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system. A TMS usually “sits” between an ERP or legacy order processing and warehouse/distribution module. The TMS can be used to manage small parcel freight (e.g. Fedex and UPS), less-than-truckload freight (LTL), full truck load freight (TL), local route delivery planning and execution, as well as enterprise owned fleet management operations.
Food Service Distribution/Operation
A food service distributor is a company that provides food and non-food products to restaurants, cafeterias, industrial caterers, hospitals and nursing homes. A food service distributor functions as an intermediary between food manufacturers and the food service operator (usually a chef, food service director, food and beverage manager, and independent food preparation businesses operator owners.) The distributor purchases, stores, sells, and delivers those products, providing food service operators with access to items from a wide variety of manufacturers. Food service distributors procure pallets and bulk inventory quantities that are broken down to case and sometimes unit quantities for the food service operator. Most food service operators purchase from a range of local, specialty, and broadline food service distributors on a daily or weekly basis.
Warehouse Management Systems (WMS)
A warehouse management system (WMS) is a software application that supports the day-to-day operations in a warehouse. WMS programs enable centralized management of tasks such as tracking inventory levels and stock locations. By combining a warehouse management system with a wireless network, mobile computers, radio frequency identification (RFID) technology, and voice picking applications, Barcoding can help fully extend your enterprise to the mobile worker, while increasing operational efficiencies and enhancing your customer service.
Integrated Business Planning/Demand Management (IBP/DM)
Integrated Business Planning (IBP) is the business planning process that extends the principles of S&OP (sales and operations planning) throughout the supply chain, product and customer portfolios, customer demand and strategic planning, to deliver one seamless management process. Integrated Business Planning is industry’s best practice model. Demand planning is a multi-step operational supply chain management (SCM) process used to create reliable forecasts. Effective demand planning can guide users to improve the accuracy of revenue forecasts, align inventory levels with peaks and troughs in demand, and enhance profitability for a given channel or product.
Micro Verticals are those functions and processes unique to a specific segment within the F&B industry. The functionality contained in these solutions is almost never found in a traditional F&B focused ERP system. Some of these systems will offer some of the traditional ERP modules as well. Specific examples of a micro vertical would be dairy or produce producer payroll functions.
Direct Store Delivery (DSD)
Direct store delivery (DSD) is the term used to describe a method of delivering product from a supplier/distributor directly to a retail store, thereby bypassing a retailer’s distribution center. DSD products are typically, but not always, fast-turning, high velocity, and high consumer demand merchandise.
Enterprise Resource Planning (ERP)
ERP is the heart of any enterprise’s information technology infrastructure. This is the system that houses the general ledger, accounts receivable, accounts payable, asset management, inventory management, order management, procurement, and other basic modules. This system is the heart and lungs of an enterprise. Very little of what is here is actually differentiating but all of it is essential to an efficient, well run, best practices enterprise.
The Solution Ecosystem
This graphic shows how the supporting bubbles circle the central ERP environment.
These other articles published by GLB Global have content related to this topic. Please feel free to review them as well.
The Solution Ecosystem for Discrete Manufacturing