It’s not something that many average consumers think about often, but the journey our food takes from the farmers and agricultural producers to the local shop's shelf is complex and filled with numerous challenges.
Just recently, South Africa’s Food & Beverage (F&B) sector has faced a series of fairly new challenges due to varying stages of load shedding crippling the country. Over the past months, we have seen dairy farmers forced to discard thousands of litres of milk that went off due to cooling failures, millions of chickens suffocating or culled on poultry farms and even citrus fruit not making it to its final destination due to logistic challenges.
Food wastage along the value chain is nothing new, with the World Wide Fund for Nature (WWF) estimating that 44% of our fruit and vegetable harvests go to waste each year before they even make it to market. The bulk of this loss happens during the post-harvest, processing, packaging, distribution and retail stages of the supply chain, with consumers only accounting for five percent.
Load shedding has added a number of issues for producers of cold chain products as they cannot guarantee shelf life as it is. Farmers who use irrigation cannot sustainably produce with diesel and some potato farmers needed to stop production because of their inability to irrigate. In some cases, as reported by Agricultural Economics Today, key field crops have had roughly 20% of maize, 15% of soybean, 34% of sugarcane, and nearly half of the wheat production produced under irrigation will be impacted with yields being reduced and hence little or no margin for farmers.
This has drastically increased the cost of food production. The Bureau for Food and Agriculture Policy (BFAP) latest food inflation brief says that load shedding has wreaked havoc on the local economy, particularly in the food and agricultural sector. Financial results from several food companies indicate that fuel expenses to run generators during load shedding are skyrocketing. These costs cannot be absorbed in the chain and are, to a large extent, passed on to consumers, despite some retailers announcing they absorb their “diesel costs”.
Solving the energy issue
Technological advancements in agriculture have already seen the automation of a variety of processes across the F&B manufacturing and distribution industry. We have seen farmers begin implementing more automation across their agricultural processes such as irrigation, ploughing and harvesting more efficiently than ever before. However, the technological advancements do not end there, with Agricultural Enterprise Resource Planning (ERP) systems having an incredible impact on the sector, too.
Investing in alternative power sources will need to be prioritised, where possible. This alternative generation may not necessarily take a business “off the grid,” but ensure the continuity of crucial business activities during the cycle of load shedding. We have seen a number of solutions other than purely burning diesel generators 24/7 which must be explored such as large inverters, Uninterrupted Power Supplies and photovoltaic systems (solar) showing promising signs of keeping the lights on at a price.
F&B manufacturers and distributors using ERP are better able to manage their day-to-day activities using actionable data to react faster making more informed decisions, especially around energy availability and farming schedules to accommodate load shedding. ERP software systems have proven to be transformation technology, allowing these F&B producers to optimise a variety of tasks and functions in several ways. For example:
Compliance:
Farming has strict rules and regulations when it comes to the food and products, they deliver to retail stores. Every item from farm to shelf must meet all necessary safety standards. ERP allows for the traceability and tracking of all produce that farmers grow and sell.
Cold chain management:
Meat, dairy, and fruit farmers must keep their produce at very specific temperatures when in storage and out for delivery. ERP software using IoT and BI help ensure all cold storage requirements are met and deliveries are kept on track.
Procurement:
Most importantly in today’s agricultural environment, F&B manufacturers and distributors need to have a clear view of inventory levels and inventory mix to efficiently know when and how much to replenish supplies, stock, and equipment. These are all essential ingredients in the farming process that can be better tracked using an ERP software system.
Resources and yields:
Monitoring and tracking the quantities and types of resources, such as water, power, and fertiliser, that it takes to produce healthy crops and sufficient yields from different fields can be enabled using ERP software and its range of tools and customisable functions.
By embracing technological innovation, alternative energy supplies and the appropriate adoption of ERP software, the South African agricultural industry will not only be better prepared to meet the supply and demands of consumers – which will soon include everything from providing online shopping opportunities and same-day delivery - but also hopefully by reacting in advance to changing shopper buying habits and range selection, achieve the goal of reducing unnecessary food wastage by half.
Apart from the ongoing concerns about the energy crisis, F&B conditions in South Africa are generally favourable, having benefitted from the rains of the past few months. Provided a near-term solution for the sector’s energy shortage is found, with this 2023 could be another year of generally large agricultural harvests across all subsectors and possibly positive growth.
About Doug Hunter
Doug heads up Customer and Ecosystem Enablement for SYSPRO Africa. He is responsible for Support, Consulting, and Education/User-Enablement services to SYSPRO's channel partners and customers within sub-Saharan Africa. At heart he’s a manufacturing/logistics business professional - rather than an IT techie, having directly managed different manufacturing operations and supply chains. His passion now is to help such companies discover and implement innovation using people, processes, and appropriate business IT.
