The prediction business is a tricky business. It is a challenge to separate the signal from
the noise when you are looking at the trends that are shaping the market. For
me, this challenge is compounded by the rapid pace of innovation in both the
core Customer Relationship Management (CRM) space and the adjacent technologies
that influence the core.
If we quickly look back to 2016, the continued investments
in mobility and social integration have created a wealth of new, rich data and opened
the floodgates with regards to interaction channels that are available to
customers. There has also been continued investment in analytics with a real
focus on turning insights into actions. The evolution of these areas has
created a springboard effect in the trends for 2017.
The first trend that I see shaping the CRM landscape in 2017
is personalization. Our workforce is
continuing to evolve into an incredibly diverse, multi-generational,
multi-cultural body. The way that people interact with CRM solutions varies wildly
depending on background, experience, and expectations. The concept of “off the
shelf” or “out of the box” has been fully obviated. The coming year will see a
demand for CRM solutions to enable deep personalization across four key levels:
The Organization requires the ability to define
their set of standards
The Department requires the ability to define
their unique processes
The Team requires the ability to define their
specific data views, reports and dashboards
The Individual requires the ability to define
their unique CRM user experience
Effective personalization drives a sense of ownership at all
levels, and that ownership translates to adoption, utilization and achievement
of the true CRM value proposition.
The second trend that will dominate CRM in 2017 is simplification. CRM solutions have become part of a standard
technology ecosystem over the past several years. Over time, the solution is
modified, extended, and enhanced based upon the changes required by evolving business
needs. However, these modifications tend to be additive in nature. The
continual cycle of additive changes creates overly complex data models,
confusing screens, and complicated processes.
Organizations with CRM implementations that are over 3 years old should
take the time to do a deep review of all aspects of their system with a focus
on the following questions:
How do we use the data we are collecting?
Is the process that we have built still
applicable to our business today?
Does the CRM user experience drive the right
focus for our users?
There are two very specific benefits that a simplification
project will provide. First, simplification leads to higher adoption and lower
costs of ownership. Simpler solutions are more approachable and easier to embed
in a user’s day to day life. In addition, simpler solutions reduce overall
training (and retraining) demands as well as reduction in overall user support
Second, and perhaps more importantly, a simplification
project paves the way to both predictive and prescriptive analytics. The effectiveness of machine learning and
advanced analytics is fully predicated on the quality and consistency of the
data that is provided to the algorithms. The adage of “garbage in, garbage out”
is fully realized in the world of advanced analytics. Organizations that focus on simplicity will
create cleaner, more focused data sets to teach the modeling algorithms, thus
deriving better output. Over time, additional data can and should be added to
the models, but it is best to start simpler.
The final trend in 2017 that bears some focus is delivering
CRM though alternative user experiences.
By now, mobility is a given. It is incredibly common to walk into any coffee
shop in the world and see people on their smartphones, their tablets, or their laptops
interacting with CRM solutions. The
innovation that will come to the forefront in 2017 is leveraging voice and chat
driven interactions with CRM tools. The recent evolution of natural language
interaction in the consumer space through tools like Alexa, Siri, and OK,
Google, has created an opportunity for users to interact with CRM solutions in
the same manner. From simple use cases, like searching and retrieving
information, to more sophisticated scenarios, such as dictating meeting notes
or updating records, voice based interactions will change the way people
interact with CRM technology.
Similarly, there has been rapid innovation in artificial
conversational entities, more commonly known as ChatBots. These bots allow for
deep interactions with CRM systems through non-traditional interfaces like
Skype from Microsoft. Like voice based use cases, ChatBots enable both simple
search and retrieval functions, as well as deeper navigational and data
The value proposition for these alternative user experience
models is that there is absolutely no learning curve for a user to be efficient
and effective while interactive with a CRM system. The ability to frame
questions and drive actions using speech or plain text prompts will drive
significant reductions in total cost of ownership. Additionally, these new
modes will decrease the informational time lag that is inherent in most CRM
systems today. Access to real time user updates will allow organizations to
react more quickly to opportunities and challenges in the market.
In conclusion, 2017 will be a transformative year for the
CRM space. Advanced technologies like machine learning and natural language
processing are opening the door for an explosion of new capabilities for the
CRM market. However, organizations need to take the time to thoughtfully
prepare for the adoption of these technologies.
This year, companies need to take the time to re-think their overall CRM
goals and drive simplification efforts through their solutions. Once the
solution has been rationalized and simplified, the road forward to enable
personalization and alternative user experiences will be much clearer.
As consumers continue to change the way they engage via
social media, businesses must also adjust their approach to their customers. The use of private social networks like
Everyme and Yammer, as well as messaging apps such as WhatsApp and Facebook
Messenger, are on the rise. The messaging apps combined have almost 3 billion
users, while the social networks count 2.3 billion users. Consumers are moving between private
and social channels and engaging in multiple modes of communication. As a result, businesses are looking at how to
engage within dark social, the social sharing that occurs outside web
analytics. Chatbots are the future of
interaction within these private channels.
Chatbots are a conversational artificial intelligence (AI)
capable of interfacing with both humans and other technology. These programs go beyond interactive voice
response (IVR) systems to give companies more flexibility in the way they
answer customer questions and increase the percentage of questions they are
equipped to handle. They will be able to
quickly understand the contextual request or problem rather than forcing the
customer through a series of selection menus to understand the problem. They are quick to access and available from
desktop and mobile devices. Rather than force users to stop what they’re doing
and open another application, chatbots allow companies to inject themselves
into the places where people are already communicating.
As organizations look to enhance their relationships with
customers, the ubiquitous Customer Relationship Management (CRM) system must
evolve to meet the demands of both the customer and the CRM user. The software must move from an internally
focused information warehouse to an externally driven engagement tool, designed
to build relationships based on what is important to both customers and
Bots and Your
Consumers are moving away from the browsers and apps to chat
platforms for simplicity and convenience.
Market research has found that 62% of people who downloaded messaging
apps were still using them 12 months later, compared to just 11% of users of
other apps, and daily sessions within messaging apps are almost five times
greater than all other apps. Over 2.5
billion people have at least one messaging app installed, and that number is
expected to reach 3.6 billion within a few years.
Gartner predicts that by 2019 requests for customer support
through consumer mobile messaging apps will exceed requests for support through
traditional social media. Since chatbots
are not downloaded, they should provide a smooth experience for consumers. Rather than searching a website, consumers
would engage the chatbot within their preferred messenger app. Content delivered via a chatbot would also be
more relevant to the consumer. With
social media integration, chatbots have a rich data source to understand user
habits around when they check their device, what their interests are, and what
event are scheduled, so bots can deliver updates, information, and
recommendations that encourage engagement.
Chatbots could become the first interaction a consumer has
with a business. For example, a customer
utilizes a chatbot to check on their account balance and transfers funds from
one account to another. In return, the
bot might suggest that you set up an automatic transfer based on your past
history of transferring similar amounts around the same time each month. The next interaction might be an inquiry
about the current mortgage rates and the loan process. From there, the conversation thread would be
transferred to a loan officer, to offer more in-depth information about credit
qualifications and completing the loan application. At each step of the process, the conversation
threads would be recorded in the CRM system, allowing greater insight into the
Bots and Your
Chatbots also have the potential to serve as a virtual
personal assistant for the employee. A
chatbot is a perfect tool to help develop the 360° view of the customer. Chatbots can be integrated into a company’s
own enterprise chat application, connecting and gathering information from
across company-wide applications like CRM systems, Support Ticket systems, or
even ERP systems. Such an integrated bot
will give you all you need with just a few typed commands. Chatbots have the potential to resolve the
data leakage issue in CRM. Garbage
In/Garbage Out, as it relates to data, becomes less significant due to
automation and smart AI. Potential
results include increased customer retention and more accurate revenue forecasts. Chatbots add to the mobile experience as
well. The information exchange becomes
easier and more productive if you can access data within one mobile app.
Continuing the banking example, a chatbot within the CRM
would provide the loan officer with the number of applications currently in
underwriting, along with the list of priority tasks for that day. Rather than launching the CRM software, the
service representative could tell the chatbot to attach the conversation to the
customer record, which saves time. As machine learning continues, bots will
enable the user to take action directly by presenting pertinent workflow
scripts. For example, when a quarterly
update on a key customer relationship is required by the executive team, a bot can
present the user with a link to launch a workflow enabling a quick, efficient update
script. Such an engaging experience
surpasses the current “login – search – retrieve – act” paradigm of today’s
Customers want organizations to react to their needs more
quickly; to be able to maintain those speeds as the organization grows; to have
someone engage with them when they need to connect with the organization; and
to have experiences that are tailored to their needs. CRM users expect the same from their
systems. While computing tools such as
the AI chatbot can automate some job responsibilities, the technology won’t be
a replacement for most employees as it isn’t equipped to handle complex
tasks. People and smart machines work
better together. Chatbots have the
potential to allow an organization to increase revenue, streamline internal
processes, and improve data exchange across departments.
Businesses are continuously looking for new strategies and
supporting technologies to proactively respond to today’s digitally savvy, empowered
customers. Customers know they have more
choices when it comes to where they spend their money, and they are demanding a
richer experience in return. Customer
Relationship Management (CRM) systems are the hub of a company’s interactions
with customers, as well as with CRM users.
The end goal of any CRM is to provide a well-developed customer profile
and derive actionable insight from available data. This goal must be achieved
in the most efficient manner. As enterprise
software continues to develop, the needs of the user must also be addressed and
our business systems must elevate their game.
Not only should intelligent process look for ways to improve customer
experience, but user interfaces must adapt to improve productivity.
“How well do we know you?”
Intelligent CRM begins with data; however, users can no
longer be expected to spend hours manually updating records. Integrating software across the enterprise
provides the basis of a robust customer profile. Rudimentary demographic facts such as
location, income level, education level, and marital status are combined with
order history and service tickets to form the foundation. Big data gleaned from social media services,
online activity, and information from customers with similar backgrounds provides
a treasure trove of additional facts that can improve the customer experience. The Internet of Things (IoT) adds another
layer of data. It is estimated that
anywhere from 26 to 50 billion devices will be connected to the Internet by
2020. For example, information from
sensor devices in a car can be collected by the insurance carrier, so that
rates are based on actual driving habits.
Knowing the customers’ social media habits, as well as their
demographics, provides deeper understanding into what that customer truly wants
from their interaction with your organization.
An engaged customer would share his experience with his social media
network; a less satisfied customer would browse competitor sites. All of these mechanisms provide millions of
data points to be compiled. The
challenge is sifting through the noise and pulling together complementary notes
to create a symphony. Based on the
wealth of information available, Intelligent CRM should be able to segment a
company’s client base, not only by the number of products purchased, but also
by the number of positive reviews shared online. The system will be able to prioritize,
categorize and route so that action can be taken on that insight.
As an organization learns more about its customers, the same
methodology should be applied to the users of its CRM system. Rather than pulling a variety of daily and
weekly reports to decide on the next action item, Intelligent CRM will push the
relevant information to the appropriate user as it happens so actions can be
taken to enhance the customer experience in a timely fashion. For example, knowing the teenager will graduating
from high school soon should prompt the system to send information qualified
expenses for the 529 plan and tips for avoiding potential penalties. If a high net-worth client calls the service center
about withdrawal fees, the system would immediately alert the advisor to reach
out to the customer. Noticing the
customer has also recently searched realtor sites would prompt the advisor to recommend
which account to tap for the down payment on that vacation home.
“How do we communicate with you?”
Intelligent CRM will also tailor the interaction for both the
customer and the user. Part of a
well-developed customer profile must include the preferred channels of
communication. The system should be able
to predict the best course of action, as well as the level of response
required. In addition, the intelligent
CRM system should respond in accordance with the time based expectations of the
preferred channel. Customers expect faster, more immediate acknowledgement from
the company when leveraging social channels. An anticipated service issue would
warrant an email outlining the next suggested steps, while a potential
grievance demands a phone call to determine the root cause and ways to remedy
User interactions should also be tailored. Future systems should not require logging
into the enterprise system to address customer concerns. Alerts should be sent in real-time via the
user’s method of delivery. The levels of
notifications could also be preset, based on roles, service levels, and other
factors. These subscriptions would
provide targeted information to the right person at the right time, avoiding
potential “alert fatigue.” Another
valuable mechanism would be the ability to interface with the CRM system
through those notifications. Shortcuts
embedded in the alerts would enable the user to provide updates, add notes, or
CRM software is about connections, cultivating the
relationship between the customer and company.
The goal is to manage the journey for both the customer and the user so that
the company can deliver consistent experiences based on that accurate,
real-time information. Intelligent CRM
ultimately becomes a virtual assistant that supports daily activities, helps
manage interactions, and drives revenue and growth.
Seven rules have been issued under
the Food Safety Modernization Act (FSMA), and the compliance dates for the
Preventive Controls for Human Food guideline has passed. FSMA requires that a written record be kept
of the entire Hazard Analysis and Risk-based Preventive Controls (HARPC)
plan. These records must be maintained
for no less than two years, and evaluated whenever there is a significant
change at the facility that might increase a known hazard or introduce a new
one, or every three years if no significant changes occur.
Most companies have identified what
needs to be done in order to comply, but for many the challenge of documenting
those efforts remains. Typically there
is no consistent format or approach for records maintenance, and too often key
information on the same topic or issue is different at different
locations. Information should be easily
accessible and usable across the organization to identify trends and to remind
to follow up on corrective actions and/or audits.
Three key points are the focus for
FSMA documentation: the supplier, the
facility, and the shipper.
Know who you’re buying from
For most food manufacturers, in-depth
knowledge of suppliers is crucial to ensure the quality of the product; now it
is also a critical step of your HARPC plan.
You must document not only the hazard your supplier is responsible for
controlling, but also the action they have taken to prevent or control that
issue. For example, an ice cream company
would want to ensure that the peanut butter entering their facility is not
contaminated with salmonella. Working
with certified suppliers would provide assurance that the ingredients meet
quality and safety standards. Certificates
of analysis from the supplier offer one form of documentation that the product
is within limits; in-house testing prior to use would verify those findings. Annual audits would also be necessary to
evaluate the supplier’s effectiveness in controlling the hazard.
“Trust, but verify” is the mantra
for this stage of documentation. A
thorough, written program that details your verification process is necessary
to meet FSMA requirements. There is
still time to ensure compliance; the supplier verification requirements take
effect March 2017. A fully integrated
Enterprise Resource Planning (ERP) system would track supplier audits and link
the documentation to supplier records.
Proactive controls within an alert management system would prevent
ingredients from advancing to the manufacturing floor until acceptable test
results had been received. When you are
fully aware of your suppliers and their capabilities, you can better execute
when there is a quality or safety issue.
Many businesses already have
preventive controls programs in place; however the challenge now becomes validating
and documenting those processes and procedures.
Some businesses may have been following Hazard Analysis and Critical
Control Points (HACCP) guidelines, but may not have adequate documentation to
prove it. Companies with GFSI
certifications tend to have more complete documentation, but the format can
vary from sophisticated technology to manual logs. Continuing with our example of the ice cream
company, sanitation records would be necessary to prove the processing
environment would not allow listeria to contaminate the finished product. Listeria is found is soil and water, and
can be introduced into a manufacturing facility a number of ways. Floor drains are common sites of
contamination as they can be neglected by cleaning staff. Once introduced into a cold environment, it
can be difficult to contain, partly because the bacteria grows well at
refrigerator temperatures, as low as 40°F.
A thorough cleaning and sanitation program is required to keep listeria
out of the processing environment. Tests
should be run on the finished product to ensure there has been no microbial
contamination. A shipping hold would
prevent the product from being distributed prior to receipt of clean test results. Shipping documentation must be maintained
that would reflect such a hold.
“If it’s not documented, it didn’t
happen” is the call to action at this phase.
A written analysis of both the identifications of the hazards and the
controls to prevent or minimize the issue is required. Verification steps must also be designed and
implemented to ensure the HARPC plans are operating correctly. A manufacturing execution system (MES) can
record quality assurance tests, as well as cleaning and maintenance protocols,
while the alert management system can warn when control checks have not
occurred or when conditions are out of tolerance so that immediate action can
be taken. A detailed record of the full
scope of the plan, including the process, the proof, and the problem, must be
Know who you’re shipping with
The third area of documentation is
for shipment of the finished product. The
Sanitary Transportation of Human and Animal Food rule requires that entities
engaged in the shipping of food and food ingredients ensure that contamination
and adulteration are avoided en route. In
order to ensure the quality of the product, the ice cream company in our
example would want to verify that temperatures are maintained throughout
shipment. In addition, a properly
maintained transport is necessary to prevent cross-contamination.
“Ignorance is not bliss” resonates for this
point. Many food manufacturers already
follow most of the requirements of the Sanitary Transportation rule; the focus going
forward will be on documentation, training, and validation systems. As with supplier verification, it is your
responsibility to document that you provided the shipper with detailed specifications
for transport, such as temperature and cross-contamination controls. All written procedures, agreements, and
training programs must be maintained for a year after use. While the compliance date for this rule is
April 2017, these preventive controls should be put in place as soon as
FSMA states that documentation must
be accurate, detailed, and legible; it must be created at the same time as the
activity being recorded; and it must be provided within 24 hours of the request
for review. An integrated ERP system
serving as a single source of truth for the company satisfies all of these
provisions, gathering documentation from an MES and an alert management solution. A robust ERP will give a food manufacturer
visibility and management of materials, quality, scheduling, and inventory
management in order to track specific orders.
At each step in the process, if a food safety risk is uncovered,
immediate action must be taken to recall the affected product. The traceability feature of ERP allows the
company to track a single ingredient or lot of finished product back to the
supplier, through the inbound carrier, and forward to the outbound carrier and
ultimately the distributor.
The FDA has stated their philosophy
is to “educate before and while they regulate.”
In keeping with this mindset, expect continuous improvement as these
regulations continue to evolve. Implementing
FSMA documentation provides an opportunity to encourage greater collaboration,
instill a broader business perspective, and build stronger relationships that
improve productivity and ensure food safety.
Human beings have been keeping on
eye on their food supply since the dawn of time. Livestock has been identified in some form
and monitored for centuries, particularly during outbreaks of disease. Ancient Romans had provisions to protect
citizens from adulterated food. Early
colonial America implemented inspection laws for the export of food to
Europe. Only in the last fifty years or
so have food companies more routinely relied on product identification codes
and electronic systems. Regulations such
as the 2001 Bioterrorism Act and the 2011 Food Safety Modernization Act have
made traceability a critical factor for food companies to consider.
For most manufacturers, the number
one reason to implement track and trace technology is to manage recalls. This capability can be also be used to
improve other aspects of an organization, such as inventory management and
quality assurance. This wider
application can lead to improved efficiencies, reduced costs, and increased
Tracking the Source
Globalization has created gaps in
safety in the food supply chain. The US
imports approximately 19% of its food supply- 80% of seafood, 50% of fruits,
and 20% of vegetables. The top three
countries are Canada, Mexico, and China.
Safety regulations vary by country, as do agricultural practices. Quality should be at the forefront of all
supply chain initiatives for risk management and business continuity
Solutions can include built-in
controls to provide manufacturers with visibility into qualified suppliers and
the ability to specify incoming inspection requirements. If a tolerance issue or contaminant is
identified, track and trace technology can notify the manufacturer in real-time
to begin addressing the problem and avert the deficient product from the
leaving the production floor. If the
same product is returned multiple times, a root cause analysis of track and
trace data might reveal a quality issue with a specific ingredient or
Tracking In House
Food manufacturers yield an average
of 84% of raw material. Even a small
increase in yield improves profitability.
Managing growth and keeping costs under control are high priorities for
any organization, and visibility into manufacturing operations is crucial.
Track and trace technology can be
used to improve inventory management.
Knowing when an ingredient arrived, and what its shelf life is, allows a
manufacturer to optimize use of its materials.
For example, establishing protocols with a first-expired/first-out (FEFO)
rotation ensures that stock is used in order, rather than being left to
languish on the shelf. Lot controls can
also dictate distribution order to that product with an approaching expiration
date is shipped ahead of the next batch.
Better use of inventory can lead to improved demand forecasting and planning,
thus allowing for more strategic operational decisions.
Tracking the Distribution
Increased scrutiny and improved
testing methods have led to more product recalls. In fact, contamination recalls have increased
167% from the first quarter of 2016 to the second. General Mills recalled 45 million pounds of
flour after it was linked to an E. coli outbreak going back to December 2015.
The flour was distributed to consumers, as well as other producers. Betty Crocker instituted a recall of its cake
mixes and Krusteaz pulled its blueberry pancake mix, due to receipt of recalled
flour. These secondary recalls are a
direct result of traceability. By
knowing the ingredients that went into the product, these manufacturers were
able to take action quickly.
Regulatory bodies are not the only
ones demanding that manufacturers be able to track a product forward and
backward in production. Many retailers
are requiring their suppliers conduct mock recalls to demonstrate their ability
to track an ingredient’s path through the manufacturing process. Identification is considered the most
important step in increasing the effectiveness of a recall. An industry survey found that 78% of
companies can locate lot information within eight hours. An integrated ERP system with full backward
and forward lot trace/recall capability has the potential to reduce that time to
minutes. The sooner an issue is
identified the sooner steps can be taken to resolve it.
According to 2016 International
Food Information Council (IFIC) Foundation Food & Health Survey, 66% of
respondents were confident in the safety of the US food supply, down 12% from
the previous year. Traceability can
allow a manufacturer to greatly improve agility and decision-making, thus
ensuring product safety, securing customer and consumer trust, and meeting
industry and government regulatory requirements.
An estimated 15 million Americans
suffer from food allergies, and the numbers are growing. Reactions can range from mild responses, such
as a rash or an upset stomach, to severe symptoms including trouble breathing,
chest pain, and loss of consciousness. While more than 160 foods have been described
as causing allergies, the Food and Drug Administration (FDA) has identified
eight that must be declared at least once on the food label. These major allergens - milk, eggs, fish,
shellfish, tree nuts, peanuts, wheat, soy - account for 90% of allergic
reactions, and are the food sources from which many other ingredients are
Undeclared allergens have been the
leading cause of recall since 2011, accounting for 45% of all FDA recalls in
2015, exceeding the total number of recalls for all previous years. In the two months prior to the release of
this article, the FDA reported 20 recalls for undeclared allergens. In years past, the FDA had urged
manufacturers to avoid unidentified allergens; now the industry is required avoid
them as part of the Preventive Controls provisions of the Food Safety
Modernization Act (FSMA). The
implementation of an integrated ERP system can help a company meet these
What Went Into It?
Manufacturers need to have control
over their recipes and formulas to ensure consistency and quality. In the case of allergens, recipe management
is essential. When a new product is
formulated, ingredients are tracked within the system. At this point, the presence of allergens is
easily captured. But what if an
ingredient is not in stock? A substitute
is used, and the recipe needs to be modified.
For example, if a recipe calls for milk, soy milk is acceptable
replacement, but soy is another allergen.
An ERP system would detect the conflict and prevent that change from
going into production. An alert would
bring the error to the attention of the appropriate individual.
What Came In Contact With It?
Another potential source of
undeclared allergens involves cross-contact.
Cross-contact occurs when an allergen is inadvertently transferred from
a food containing an allergen to a food that does not contain the allergen. Ideally, products containing allergens would
be processed on separate equipment. If
that option is not available, scheduling becomes critical. A hierarchal structure can be programmed into
the ERP system so that jobs run from the lowest to the highest of
allergens. In a bakery, sugar cookies
would be the first product down the line, then peanut butter cookies. Sanitation would occur before the next batch
ran on that line, to prevent possible peanut residue from coming into contact
with the next batch of cookies.
Where Did It Go?
Traceability has become the guiding
principal for almost all food safety regulations. A company must be able to track material
along every step of production. Lot
traceability allows manufacturers to determine not only where exact ingredients
originated within a given batch, but also where that batch went. Version
control features provide a historical view of the recipe used to produce each
finished good lot so that a complete audit trail is available, back to the
original ingredient lots used at a specific date and time. In the event of a recall, time is of the
essence. If a supplier realized a shipment
of spice mix contained peanuts, the ERP system would be able to answer specific
questions such as where the ingredient was used, how much was used, when it was
used, and where the finished product went.
A targeted recall is more effective than a widespread one, and less
damaging to the brand and the bottom line.
When it comes to allergens,
ignorance is not bliss. Allergic
reactions to food result in more than 300,000 outpatient visits per year among
children under 18. Strict avoidance of
allergens is important to prevent serious health consequences. Use of an ERP system to manage recipes,
establish production schedules, and execute precise recalls can help a company
comply with FSMA regulations and protect vulnerable consumers.
The Food Safety Modernization Act
(FSMA) requires manufacturers and processors to evaluate and identify food
safety hazards, implement preventive controls, and document those
measures. Many companies see these
regulations as a means of raising the bar for the food and beverage industry. It could be argued that standards are long
overdue. Consumer confidence in food
manufacturers is low. According to the
2016 Food and Health Survey conducted by the International Food Information
Council (IFIC) Foundation, only 10% of respondents view manufacturers as
trusted source for food safety.
More educated consumers combined
with tougher industry standards are creating an environment where food
manufacturers need to take additional steps to ensure their processes can meet
these expectations. An ERP system
specifically designed for food manufacturers will benefit a company as they
comply with FSMA regulations regarding preventive controls, traceability, and
businesses are going even further, by exploiting the full capabilities of the
system in order to improve efficiencies, reduce costs, increase margins, and
increase customer service levels.
The Best Defense is a Good Offense
Prevention is the cornerstone of
FSMA and is an important issue to consumers.
Up to 15 million Americans have food allergies, and reactions can vary
from a mild response, such as a rash, to anaphylaxis, which can be fatal. Undeclared allergens are the leading cause of
recall. There were over 600 recalls in
the United States and Canada in 2015, and a third of those were due to the same
allergens: milk/dairy, peanuts, eggs, and wheat/gluten.
Food safety standards recognized by
Global Food Safety Initiative (GFSI) are a good defense against potential
recalls. When these certifications are
complemented by intelligent technology, the protective net around the company
tightens. For example, an ERP system with
Allergen Control can prevent the creation of recipes containing allergens that
are not allowed in the product being produced, as well as control material issues
preventing ingredients to be added that are not declared on the label. In addition, using sequencing rules to manage
when products with allergens are produced can help reduce any chance for cross
contamination. As an additional benefit, improved sequencing using the planning
and scheduling tools in ERP can also help reduce changeover times between jobs,
thereby increasing utilization resulting in additional production capacity.
Software can also capture and analyze data to identify where bottlenecks occur
and allow managers to assess and correct such situations. What started as compliance with preventive
controls became a more efficient production line, which can lead to greater
revenue for the organization.
An Ounce of Prevention is Worth a Pound of Cure
The industry average cost of
recalls is $10 million in direct costs, as well as brand damage and lost
sales. Actual total loss data is seldom
available, and the scope of the damage can be dependent on how well media
attention and public perception is managed.
Financial analysts estimate that Chipotle will have lost approximately
three years of earnings between fiscal years 2014 and 2017, due to outbreaks of
E. coli and norovirus. Additionally, they expect to spend about $50 million in
food safety measures and marketing campaigns to regain consumer trust.
Hazard Analysis and Critical
Control Point (HACCP) plans are the starting point in identifying
vulnerabilities. By implementing a
comprehensive track-and-trace solution, a company has the ability to conduct an
efficient, targeted recall that minimizes potential harm to consumers and
negative impact to manufacturers, distributers, and retailers. Using real-time data, problems can be quickly
identified and drilled down to the exact culprit within the supply chain, thus
avoiding mass recalls. Mock recalls utilizing
a robust traceability system reduces the timeframe to execute a recall from
days to minutes. Fewer recalls improve
bottom line performance; recovery expenses are avoided, the company brand is
protected, and supplier relationships are preserved.
Don’t Get Lost in Translation
FSMA regulations require much more
stringent data management procedures; there are guidelines as to what data must
be recorded, how to record it, when it must be recorded, and which employee
recorded it. Standalone applications and
homegrown measures can be time-consuming as information is keyed into multiple
systems, and the probability of inaccurate information increases due to errors
in reentering data. Comprehensive
reporting also becomes difficult as information has to be pulled from various
systems and compiled in another.
A fully integrated ERP system provides
a single source of truth. It should be
powerful enough to capture detailed data and flexible enough to produce reports
suitable for an auditor. Errors decrease
and quality increases when employees have access to documented processes. Business intelligence and analytic solutions
present Key Performance Indicators (KPIs) that make it easier to identify
situations that require attention.
Drill-down capabilities enable users to identify trends and conduct root
cause analysis. Real-time information is
available to support manufacturing and distribution activities. Managers can focus on strategic planning
rather than time-consuming administrative tasks.
FSMA will have some kind of impact
on almost every food manufacturer. While
compliance is mandated, there can be additional benefits for those
organizations that choose to go beyond the minimum standards. A comprehensive ERP system allows a
manufacturer more in-depth information about their operation. Such a view allows for improved inventory
management as resources are better utilized; increased customer service levels
as more accurate electronic records are used in forecasting and planning; and
increased efficiencies as workflows are simplified and the possibility of human
error is minimized. The end result is a
more productive, more profitable organization that has earned the trust of its customers
and the confidence of consumers.
In a recent interview, famed
fantasy writer George R.R. Martin discussed how flags were a large part of
developing such a creative mind at such an early age. Martin tells the story of
growing up in New Jersey overlooking Manhattan and watching ships sail in and
out of the harbor from all across the globe. He would look at the flags flying
high atop these ships and craft stories about the peoples and lands from where
they came. The author marveled at how something as simple as flags can convey
so much information and create such a level of curiosity.
In our post today, we
will draw comparisons between flags and a means of succinctly conveying
information in our businesses today. What does a flag really do? What is its
purpose? I would argue that flags are used to communicate information about
nations and organizations in as simple a way as possible while remaining easily
identifiable. Flags primarily use colors and shapes and, at their very best,
are immediately recognizable. Take the flags of the USA, UK or Germany as
examples. These would likely be recognized by the majority of the world’s
population, and all done with just the use of colors and shapes.
So what does this have
to do with us as we are busy running our businesses? Isn’t there something that
you use daily, or perhaps many times throughout the day that is essential to
communicating information in its simplest form? How about Dashboards? Are you
getting the most out of yours?
Dashboards exist to
provide an organization with a means of conveying data to their audience. But what
are the elements of really effective ones? Let’s consider these four essential
elements as we consider how to make best use of this tool to better improve our
operational performance. Dashboards should be:
Aligned to goals
Visual in nature
A good dashboard should
be aligned to your organizational goals. Think of what is on your dashboard as
prime real estate. Only the essential information should be included here so
you don’t risk anyone tuning out due to a busy screen that they have to parse
through to understand. This is your means of conveying key metrics that you
want to communicate to your teams, so keep it simple and direct. This will also
provide you with a means of aligning your team to your objectives as everybody
will be looking at the same things and clearly understand what is important to
Dashboards should also
be visual in nature. Consider the saying, “a picture is worth a thousand
words”. You want the viewer to immediately understand what is being represented
and equipped to take action without having to ponder about the content on the
screen. Try to use as many charts and graphs as possible and make sure to use
colors to identify important elements of the data. The key here is to make certain
the information is understood clearly and immediately.
element of an effective dashboard is that it is highly accessible. You want
your team members to always be able to gauge how they are performing without
having to seek out the information. By distributing this data effectively, it
reinforces that everyone is on the same page. This allows for real time
adjustments and a visual means of seeing the effect(s) of teams working
together to set and achieve their goals.
The information you are
distributing on your dashboards should be relevant. It should be refreshed
frequently or be precisely the data that you want to communicate to drive
action (last shift, last product run, last week, last month, last quarter, etc.) Be mindful to continuously review what you are distributing with your
dashboards to ensure it is exactly what you want to communicate, or you run the
risk of losing employee engagement.
I hope you like my idea
of dashboards being flag for your organization. Everyone should immediately
understand what it is being communicated and operate as a team under one
banner. I strongly believe in their ability to drive excellence in your
organizations if utilized effectively.
If you would like to
discuss how to improve your dashboard, please reach out to me or your account
executive to discuss how Aptean can work with you to make your dashboard a key
element in delivering results for your organization.
The recent $100 million Consumer Financial Protection Bureau
(CFPB) fine levied on a leading financial institution in the US marks the
largest penalty imposed by the CFPB to date and makes the case for implementing
a complaints management solution. With potentially millions of customers
affected by the systemic fraud from the company’s employees over a five year
period of time, it makes sense that some of these customers complained to this
financial institution at some point before contacting the CFPB to help them
find resolution. The CFPB assists thousands of consumers each week with
complaints related to financial products and services like mortgages and credit
cards, serving as an intermediary between the consumer and the financial
institution. All of those complaints are aggregated and published in the CFPB Consumer
Complaint Database after 15 days, whether the company responds or not.
For a bank or credit union, having complaints made public
can be embarrassing and may affect current and future customers with a negative
brand perception in the market. As companies increasingly compete on their
positive customer experience, a process for handling complaints efficiently,
and in a timely manner, is a way to distinguish themselves from their
competition. Completely missing a trend or pattern of related customer
complaints, as evident in the recent fraud case, takes the negative impact of reputational
damage to exponential levels.
However, there are some best practices companies can follow
to ensure they are protecting their customer relationships by providing timely
responses to customer feedback. First, close the loop on customer feedback by
automating your complaints process and funneling complaints from all channels
to a single system. Complaints can come from a variety of sources -- social
media, phone calls, email, or even in person -- and each of these sources should
be captured in one place for coordinating responses. The ability to analyze
incoming complaints information is critical to determine where action is needed
to improve your company’s customer experience. The ability to aggregate data
and overlay analytics leads to quickly identifying the root causes of positive
or negative experiences, and spotting the hidden trends that could be used to
improve customer experiences.
The key takeaway for professionals responsible for handling
customer complaints is to understand that while keeping customers happy can
often be challenging, the feedback they provide is a treasure trove of
information that can help improve their customer experience, protect their
company’s reputation, and potentially be the indicator for underlining problem
areas in their business. Utilizing the right tool puts that valuable
information in their hands, and the ability to use it to transform customer
complaints into positive differentiators in their market.
To learn more about how Respond can help with
CFPB compliance, click here.
A supplier may have the most
sophisticated software, the most experienced personnel, and the proper
warehouse inventory to fulfill any demand. However, even with everything in
order from the supplier side, without accurate and timely store inventory the
risk of stock outs can be high and go unnoticed until the next cycle count at
each store. Whether the supplier is maintaining its own perpetual inventory or
relying on data feeds from the retailer inventory, positions can get out of
balance due to several issues like shrinkage or improper receiving of
shipments. In addition, inaccurate
inventory means fewer sales opportunities.
Two ways to improve inventory are
through statistical analysis of historic point of sale (POS) data and direct
input from store personnel in the replenishment process.
Providing statistical analysis over
sales can alert central and store level personnel to situations that may need
to be addressed. For example, there could be a situation where systemic
inventory levels are positive, but that item is not showing sales over a
certain period. Simply following the
numbers would mean inventory levels are maintained; however the store could
almost certainly face stock-out conditions as the suggested stock level of a
replenishment system may not meet the demands of the consumer. The store’s rate
of sale would not be calculated correctly due to lost sales of the item being
out of stock. By examining how
frequently an item is sold out and how quickly it sells once it’s back on the
shelves, the retailer can make a judgement call to raise inventory levels and evaluate
if stores can sustain a higher sales velocity due to that increase.
Let’s look at a national
bookstore. A review of sales trends may
indicate that only one copy of a particular title sold in the past 10 weeks;
however the system can’t calculate an appropriate stocking level due to numerous
out of stock conditions. As soon as the
book was back in stock, it flew off the shelf.
Perhaps the title was re-issued as an anniversary edition; maybe the
rights were sold to develop into a movie.
More copies could have been sold, but the inventory levels did not match
consumer demand. Increasing the number
of books on the shelves allows the store to increase sales.
Store Personnel Input
Most vendor managed inventory (VMI)
models are managed centrally with no involvement from store personnel, even
though they are closest to the end product and can be the “eyes” of accuracy. In
a recently developed model, store personnel are notified after the daily
replenishment has run, but prior to actual orders being generated and sent to
the distribution facility, as well as given access to that day’s suggested
order. They have the opportunity to
review the order and make adjustments to those suggestions based on their
knowledge of the actual inventory at their store, while also adjusting the
inventory level for future replenishments. In addition, store personnel are
given a level of flexibility that allows them to add items that, based on their
knowledge of local buying habits, they know can sell and increase sales at
their location. Store involvement is not mandated by the process, but optional
and time sensitive. If action is not taken by a certain time, then the final
decision is left to the central team as it would be in a typical VMI setting.
The consumers of a general
electronics store tend to vary, depending on area demographics. The suggested inventory levels may not be
appropriate for all stores. Some items
may not sell in certain locations, taking up valuable shelf space, while the
same products may be popular elsewhere, constantly sold out because demand
exceeds the maximum limits set by central office. By allowing store personnel visibility into a
suggested order, the retailer can have the right inventory at the right
location, minimizing the potential for overstock or out-of-stock
conditions. In addition, by having access
to the complete catalog, personnel can adjust the planogram for that store,
maximizing sales potential.
Inventory is the one of the most
significant sources of capital; you want to make sure the right inventory is in
place at the right time. These two
methods will allow a clearer picture of current inventory, as well as provide
opportunities for additional sales.