PPCP challenges in the Food Industry and their solutions

It's no news that the food and beverage industry is in full expansion. Its revenue grew 12.8% and 16.9% in 2020 and 2021 respectively. The good numbers of the sector in 2021 accounted for 10.6% of the national GDP, with R$ 766.3 billion coming from the food industry. The number of jobs has also grown in recent years. In 2021 alone, 21 thousand new jobs were created to meet growing demand (Source: ABIA – Brazilian Food Industry Association). This growth comes hand in hand with increasingly fierce competition and the need for product diversification to meet dietary restrictions and more demanding tastes.

But it's not all roses in this scenario. The beginning of the Covid-19 pandemic brought extreme changes that required even the most planning-savvy and visionary companies to act quickly in the face of adversity. The widening of demand spread and fraction and the shrinking of order books and demand visibility were just some of the impacts felt by industries in several sectors, including the Food Industry. Add to that product diversification considering flavors, formats and dietary restrictions (which considerably increase setup times), and the challenges and costs of storage — and, unless your industry has a solid Production Planning and Scheduling process, chaos is on the horizon.

The main challenges of the Food Industry were brought to the surface by the pandemic situation. Variability in the supply chain, from supply to demand, made inventory management even more critical to avoid overstock and shortages, and production management must be even more responsive to react to unexpected changes in due time. Perishability (shelf life), storage constraints for volatile inventories and the setup and balancing problems caused by the SKU explosion of the modern market are just some of the challenges this industry faces at the planning and production scheduling level.

The bright side of all this? All these problems can be solved! With the right tools and guidance, it's possible to reduce inventories in a healthy, agile way, increase productivity by grouping similar production orders, reduce shortages through early identification and gain agility exponentially. Not to mention the reduction of setup times, which are traditionally lengthy and complex in this sector.

Production Planning and Scheduling software such as Siemens Opcenter APS can help even Food Industries with more complex operations overcome these challenges. We've already shared here how Dauper transformed its results using Opcenter APS and NEO's consulting. It's worth checking out and finding out how a month's planning is now done in just 10 minutes. How Dauper transformed itself and generated results with Preactor.

Want to know more about NEO's work with the Food Industry? Visit our dedicated page.