Residents of the South African province of the Western Cape are still coming to terms with the reality of water ‘load shedding’ imposed since last month in parts of the province. Rationed water for personal hygiene as well as drinking and cooking purposes is very much a reality now. But limited water is not the only thing impacting putting food on the table. The drought is much further reaching, with farmers and food suppliers also feeling the pinch!
The Western Cape is responsible for 28 percent of South Africa’s food production. The drought has caused the price of ingredients and raw materials to soar due to shortages, specifically with staples like maize – still recovering from the 2015 drought on the Highveld.
The effects are being felt by food manufactures around the country, but even more so in the Western Cape. Typically local suppliers would have been the preferred and more economical option, but due to higher operating costs this is no longer the case. Manufacturers are being forced to substitute many local goods with imports.
Western Cape farmers have resorted to clipping their food trees to hinder them coming into bloom. This is out of desperation to avoid having to destroy entire thirsty crops.
The country-wide Bird Flu pandemic hasn’t helped things either, with shortages of poultry products across the land. A weak currency and general difficult economic conditions have also led to consumers tightening their belts and curbing food spending where possible. All these factors have created a perfect storm, putting food manufacturers in a serious pickle.
So what to do in these trying times?
Situations like this require a return to your business or enterprise resource planning (ERP) system to help ‘tighten your belt’ and maximize output from input. This means bedding down the planning stages in terms of inventory optimization, and making sure that you are driving the necessary policies to support this.
ERP is designed for the good and the bad times, but during the latter, it’s the ultimate business tool for finding efficiencies in your organization, and keeping the lights on. Be sure to read Part 2 to get the recipe for a successful food and beverage ERP system.