30% of the world's food gets thrown away. That's millions of pounds of meat, produce, and packaged goods that go completely to waste, due to various forces throughout the supply chain. Combine that with a global population that's exploding, and the Food and Beverage industry is under pressure from all sides.
Ted Combs recently joined OSIsoft as the Industry Principal for the Food and Beverage vertical, so I chatted with him about the state of the industry, where he sees things going, and the role that technology plays as the industry tries to adapt to various forces. With over 15 years of experience in the food space, Ted shifted to a career in technology where he leveraged his knowledge of the Food and Beverage sector to enable companies to leverage digital transformation throughout the value chain.
What are some of the challenges facing the Food and Beverage space?
“The consumer controls everything, and consumer preferences have changed dramatically.”
Whereas consumers used to want food that just tasted good and was convenient, now they're also very concerned about sustainability and understanding where products come from. This is evidenced by the rise of micro brands, which put pressure on larger producers who typically aren't agile enough to pivot quickly to changing consumer tastes and demands.
COVID19 has also caused a massive shift in the industry. With restaurants around the world being forced to shut down, where people get their food has changed. Grocery store demand has skyrocketed, and more people are getting their groceries/food products online than ever before. This also means that packaging requirements have changed, further sending ripples down the supply chain. Manufacturers also have had to limit the number of SKU's they produce, and the challenges just grow.
How can technology help mitigate some of these challenges?
“The entire value chain is dependent on good data at the foundational level.”
Technology leveraging the right data is key to the industry providing transparency, staying agile and being informed. Historical data is hugely helpful in pinpointing where a product, machine or process may have gone wrong, which is crucial for reducing costs and preventing costly recalls. Data is also critical for informing brands which products are selling, which ones aren't and why. These insights can then empower agile players to respond more quickly.
Digital technologies are also helpful in eliminating inefficiencies throughout the entire connected value chain. Assuming the source data is accurate and reliable, technologies can speed up processes, visualize information, utilize ML/AI for better insights, trigger workflows, and create a more efficient, transparent and responsive environment.
What's the biggest driver for adopting digital technologies in the industry?
While reducing costs and improving quality are always major focus areas, agility and sustainability have recently become more critical than ever. As consumers preferences continue to change, as does the production landscape, companies need to be able to adapt.
Oftentimes, drivers are dependent on specific company pain points - high costs, too much downtime, etc. In those cases, due diligence is required to identify which problem areas need attention, and then maturity models are extremely helpful. Ultimately, the driver for digital needs to come back to the company's bigger vision and digital journey.
When it comes to new technologies, where are companies hitting roadblocks?
“Data. I always say it comes down to the data.”
Everything hinges on reliable, available, usable data. It's staggering how many firms initiate major technology projects without a proper master data management strategy, practice, and governance. A solid data management strategy will help lay the foundation for any digital project. Data that's unreliable or unusable is a major hinderance.
What changes do you expect to see by 2025?
“Ultra-transparency on all products, which will ultimately assist with product safety and avoiding recalls,” explains Combs. With that level of transparency comes a lot of data capture, storage and manipulation which means the industry will need to leverage digital tools as well as Artificial Intelligence and Machine Learning solutions. “I foresee informed and empowered employees throughout the enterprise, and data scientists will of course continue to play an ever more crucial role. Block-chain will also emerge as a huge opportunity for companies to capture and share every part of the production process in an indisputable and transparent fashion for the entire value chain to leverage.”
The advances and benefits should continue to occur on-premise, at the edge and in the cloud.
Combs also predicts tremendous strides in efficiency and utilization, hopefully enabling companies to better feed the world's growing population in an efficient and sustainable way.
Learn more about how the PI System helps the industry capture, transform, and use their data.