In a recent IDC study on the food sector, it appears that 40% of companies are hostage to fragmented and technologically obsolete information systems, in which specific developments, external applications that do not communicate with each other, and, as a consequence, data outdated, redundant and difficult to interpret.
In these companies, the central information system - the ERP - serves little more than the billing and accounting needs.
Five challenges for the agrifood sector
Even before Covid-19, the study appeared in February this year Agrifood: New risks looming ahead, which outlined the five main challenges for the sector:
1. The changes in eating habits
Consumers are increasingly looking for healthy foods that at the same time are less harmful to the environment. This new paradigm of consumption allows producers to increase their product mix.
2. The environmental sustainability, seeking to reduce the carbon footprint of food production
Food production accounts for a quarter of the world's greenhouse gas emissions. The producers' effort to reduce these emissions is in the food production chain, where CO2 emissions (gas responsible for around 60% of the greenhouse effect) are higher.
3. The diversification of supply chains, caused by interventions in the commercial policies of each country
According to the same study, agri-food companies have to manage an increasing number of commercial interventions (from imports to incentives or export restrictions), sometimes generating an increase in operating costs.
4. The increase in wages
According to the panel of companies surveyed in the study, the average weight of labor costs represents 11% of all operating costs in the agrifood sector. This presents a challenge for food manufacturers.
5. The incapacity of companies fix prices
One of the difficulties of food manufacturers is sometimes the increase in raw material costs that is not reflected in the market. The case addressed in this study is the outbreak of swine fever in China, which reduced the herd by more than a third over the previous year. More broadly, the Asian outbreak has had a knock-on effect on product prices worldwide.
Fortunately, we live in an era of Agriculture 4.0, which represents a unique opportunity for agricultural entrepreneurs to take advantage of new technologies to respond efficiently to new challenges.
The arguments of Agriculture 4.0
The best prepared companies will be those that have an Intelligent Information System, capable of processing, analyzing and acting on large volumes of data generated by “internet of things”(IOT), in real time. With IOT, the multiplicity of devices and equipment permanently connected, from the field to the points of distribution and sale will allow the immediate collection of data on soils, the occupation of resources and consumption preferences.
In this context, the ERP it will be a fundamental instrument in the management of operational processes and in the creation of transparency in the supply and production chain, ensuring total quality control and food traceability, from the harvest to the point of consumption.
Benefits of an ERP optimized for the agricultural sector
In Agriculture 4.0, ERP is the factor that unites and integrates all field technologies with logistical, commercial and financial operations.
The consolidation of data on a single platform gives a 360º view of the business, allowing to act more quickly on inefficiencies and improve the processes of production, packaging, distribution, transport and sale of products.
The integration of ERP with agricultural equipment and scales, for example, it allows the automatic collection of quantitative and qualitative data, which are essential for business management in real time.
It should be noted that the most advanced agricultural entrepreneurs have already implemented robotic and precision agriculture, perform digital mapping of the land and take advantage of the IOT to monitor aspects such as livestock movements, soil health and water levels.
However, it is necessary to unify all the data obtained under an aggregating system - the ERP - that allows coordinating, monitoring and adjusting agricultural management practices, through mechanisms of artificial intelligence and predictive analysis.
All over the world, the success stories that demonstrate the impact of new technologies and information systems on the productivity and profitability of agricultural businesses are multiplying, both in field operations and in the back office. There are not many doubts that the road to large-scale agricultural competitiveness passes here.
This sponsored content was produced in collaboration with SAGE.