Lawson M3 Food and Beverage

As the independent Lawson M3 Food & Beverage direction develops Lawson Software company since 1992 and today accumulates in itself experience more than 400 companies worldwide.

Lawson M3 Food & Beverage: Positioning in the market

In the food industry there are no same categories (subsectors) – each of them has as the general, and unique characteristics. For example, supply chains and production process cardinally differ at producers of fish products, grain or cognac. Besides, the enterprises of the food industry have various sales channels which can be grouped in three main categories:

• Sphere of public catering (restaurants, cafe, vending machines, etc.);
• Retail (supermarkets, convenience stores, etc.);
• Supply of ingredients for other enterprises of the food industry (the 2nd production rate).

In the ERP solution the Lawson Software company initially considered specifics of each of target categories (subsectors) of the food industry. Positioning of the ERP solution Lawson M3 Food & Beverage is visually given below:

Categories (Subsector):

• Meat, Bird, Seafood;
• Dairy products;
• Fruit and vegetables;
• Confectionery;
• Groceries;
• Frozen goods.

Business scales:

• Production and/or distribution of food;
• Annual turnover from 75 mln. dollars of the USA;
• Number of staff is from 100 employees;
• The local or distributed business.

Lawson M3 Food & Beverage can be used as the complex ERP solution for management of all fields of activity of the enterprise of the food industry, and to be implemented module-by-module in addition to already existing systems (for example, only for automation of planning features of sales, inventory management, production, distribution and so forth).

Solution of key problems of the food industry

Problem 1: Security of a product. The front pages of newspapers worldwide daily dazzle with headings concerning a salmonella, gene-modified products, bird and swine flu, mad cow disease, etc. media with pleasure pick up any subjects connected with security of food since similar materials increase circulations of newspapers and audience of TV-channels. Many heads of the enterprises of the food industry consider still maximum risk possible penalties, but the biggest risk is betrayal of confidence in a brand. Costs of producers for security of food were never so high since it became a global problem.

Solution: Using the ERP solution Lawson M3 Food & Beverage, you obtain the comprehensive information about product stories by the principle "from a farm to a fork" (from what batches of raw materials it is made to what outlets it was shipped and so forth). Having quick access to such information, you can implement necessary actions for prevention of incidents and also quickly react to claims.

Problem 2: Extremely low margin. Key retailers determine supply rates and control products unit price. Thus, the producer has a real opportunity to influence only one member of equation – costs. Therefore, maintenance of a margin at the acceptable level becomes possible only due to cost reduction. However the producer can manage not all cost items: expenses on work with retailers, expenses on compliance to standards, increase in prices for fuel and so forth – all these factors are accepted "as given".

Solution: On the one hand, the price should be attractive to the consumer, with another – to provide a necessary margin to the producer. Having implemented the ERP solution Lawson M3 Food & Beverage you will be able to obtain qualitative and consistent cost information and product costs that is a key factor for determination of selling prices and maintenance of a necessary margin.

Problem 3: Dependence on key retailers. In most cases work with the largest retailers (Auchan, the SUBWAY, etc.) and the enterprises of the sphere of public catering (McDonald’s, etc.) means increase in volumes and turnovers, but steadily involves internal organizational difficulties and high costs for ensuring customer service. Here is how it is possible to characterize the principles of work with key retailers:

• If the retailer needs something, then the producer remains nothing else how to tell: "Thanks!";
• Retailers (often without any guarantees) demand new products from producers and insist on production of trial consignment;
• Retailers constantly aim at reduction in cost of finished goods, however product quality at the same time should be without fail high;
• The producer should consider individual quality requirements of goods, packaging, etc. (for example, one retailer can want packaging from three pieces only because his competitor sells packaging from two pieces);
• Infrastructure of the producer should conform to technical requirements of the retailer. If is not present – that further negotiations most likely will not be required.

Solution: The ERP solution Lawson M3 Food & Beverage will help you to conform to production requirements of the largest retailers (for example, electronic information exchange on EDI, replenishment action by the principle of VMI, collaborative planning) and also to manage a set of such parameters as quality, expiration dates, packaging, finance, distribution, etc. You receive all necessary tools for planning and control of operating activities, high-quality providing products and level of service.

Problem 4: Constantly changing preferences of consumers. Recently we prefer to spend less time for cooking and to find more time for pleasure taste of food and drinks. Besides, up to 50% of food we consume outdoors. These trends cause focus on production of ready dishes and semi-finished products in a different stage of readiness. Also in cooking cultural distinctions (kosher, vegetarian food, etc.), local requirements and many other factors make the contribution. If your products do not correspond to recent trends — consumers and retailers will switch to other products and to other producers. All who are engaged in the food industry well know — only from 2 to 5% of new products make the way on the market, and only 50% from them try to obtain success, i.e. risks are very high.

Solution: Sales planning accuracy and also terms of an output of a new product purchase crucial importance: market trends should be revealed and formalized very quickly, and time from emergence of the idea of a new product before production of trial consignment and start in production should be minimum. The ERP solution Lawson M3 Food & Beverage will be for you the good tool for consolidation of demand, sales planning on different sales channels, technology preparation and production management.

Problem 5: Own and private trademarks. A considerable part of revenues of retailers in the food industry is generated at the expense of goods under private trademarks. A task of the producer – to make and pack these goods precisely according to the specification of the retailer. Considering that one producer can turn out products both under own trademarks, and under private, there is no nothing else left how to make so-called "Bright Stock" (goods without labels). Further according to the value of demand the sticker of the corresponding labels under a private brand or own trademark of the producer is executed. If goods quality does not conform to standards and the client does not accept it (the expiration date, inappropriate packaging and so forth), for the producer (or the distributor expires) it means need of replacement and sale of goods in secondary market that conducts to notable losses.

Solution: Not important, how many trademarks you make – with the ERP system of Lawson M3 Food & Beverage you will have all necessary tools for management of "Bright Stock" (nebrendirovanny products). You can reserve goods under specific brands and also execute branding transactions (a sticker of labels) and packaging as directly in a warehouse, and in production – in the ERP solution Lawson M3 Food & Beverage both schemes are implemented.

The solutions Lawson Software in Russia and the CIS countries are submitted by BSC company.