We are entering a hypercompetitive business world. It brings rising complexity, uncertainty and risk . Companies are competing to create more market shares, making M&A, entering new markets, making joint-ventures, establishing networks, developing and launching new technologies, products and services according to the customer needs.
Economic growth has been slowing for the past 50 years. But the world population and the consumption are growing. This creates a new form of manufacturing opportunity and excellent customer loyalty. Some countries and companies are investing in innovation to improve their manufacturing, supply chain, procurement, and services operations across industries to create intelligent and agile enterprises.
People need more money to live better. The labor cost increases and the profit margins decrease. This creates high pressure on companies and nations. They develop and implement new OpEx projects to save money. On the other side, some companies and nations develop and implement short and long-term marketing and innovation strategies to save money and invest in new technologies, products and services and also talent management. For example, China has doubled per capita income for more than one billion citizens in just 12 years.
When I visit agrifood companies in Turkey, see that they have productivity issues. I know that this is fully related to the people skills, technology, leadership capability, problem solving ability and marketing and innovation management strategies of the organization.
Achieving Growth and Competitiveness
Today, technological development is characterized by cyber-physical systems (CPS) and dynamic data processes. Developing and implementing smart machines that use massive amount of data creates high pressure on companies and contributes to better productivity. These advanced manufacturing technologies are a set of highly flexible, data-enabled and cost-efficient manufacturing processes. Some refer to this as industry 4.0. It creates a competitive edge, localized manufacturing opportunity and flexibility for some nations and companies. Advanced-manufacturing technologies, digitization and the robotic revolution boost innovation. This creates a competitive advantage against conventional processes. These competitive advantages are higher efficiency, productivity, safety, , fewer raw materials, less scrap, fewer hazardous materials, low cost, high quality, high flexibility and increased customer loyalty. Digitization improves company performance against competitors and provides competitiveness in the supply chain, manufacturing operations and business management. So that a mass production with custom manufacturing will be a greater competitive advantage for many nations and companies to have lower costs and higher investment opportunity. This can help reduce production costs (excluding raw materials) by 20 to 40 percent, according to BCG and creates faster and cheaper delivery of the products.
Vision for the Food Manufacturing Sector
Food manufacturing companies have to develop and deliver innovative, a high-value added products and services for the domestic and global marketplace. Domestic and global consumers can able to find different, high quality food products made by Turkish companies on the shelves of their mainstream supermarkets.
1- Lack of knowledge and capabilities to develop new or customized food products to capitalize on market trends or evolving customer needs.
2- Insufficient management depth or professionalism, use of short-term strategy and traditional business methods and predominantly family-run businesses.
3- Low image of the food industry by some consumers.
4- Difficulties in attracting skilled and experienced workforce and professionals to join the sector.
5- Difficulties in finding right skilled workforce and professionals to hire to the sector.
6- Lack of finance to make the investment.
7- SMEs in majority and family-run food businesses.
8- Face high operating cost in utilities.
9- Using conventional processes and technologies in the operations.
According to my intensive experience in the infant food, bottled water, agriculture, artisan chocolate and pharmaceutical manufacturing operations, factory start up, supply chain management, quality, R&D, microbiology, regulatory compliance and people development, business development and innovation management, food companies have to define a long-term marketing and innovation strategy to achieve a high performance organization.
Elements of Success in the Food Manufacturing Industries
1- Product and process design and development of novel formulations, additives and ingredients for lower impact processing, improved storage, longer shelf life and freshness, less waste, flexibility in supply of raw materials and packaging in accordance with the changes in domestic and global customer needs, technologies and services in the short and long-term.
2- They have to invest in truly effective leadership and short and long-term talent management strategy. I know that the success of a business has become increasingly dependent on the ability and skills of its people. On the other side, talented people are in short supply and there is an increasing competition between companies to hire great leaders and managers. The hunt for people of unusual ability will continue due to the technological changes, digitization, robotic revolution and mass production. Do you know the famous report of McKinsey “The War for Talent”? We have to keep in mind that talent management is a vital field in today’s uncertain and complex business world. What is talent? “Talent is the sum of a person’s abilities…her or his intrinsic gifts, skills, knowledge, experience, intelligence, judgment, attitude, character and drive. It also includes his or her ability to learn”.
3- Long-term marketing and productivity-raising innovation strategy is essential for business leaders. Sector analysis and competitive intelligence in domestic and global markets are crucial to make healthy disengagements, joint-ventures, M&A, entering new markets and other collaborations to achieve growth and profitability.
4- Today, many business fields are increasingly using automated systems and robots. These are faster, stronger, more precise and consistent than employees. They contribute to higher productivity, mass production, short delivery, low cost and accelerated investment opportunities in innovation. Robotic revolution will affect many sectors and processes. For example, improving data quality and Access by 10% can create an increase in labour productivity by 14% (Barua et al., 2013). This means that such companies will have lower output prices, higher worker’s wages, and/or higher profits.
Companies investing in greater intelligence in the long-term effective talent management, new markets, product design, supply chain and manufacturing will contribute to the higher exports, innovations (in materials, processes, information technology and operations), productivity, growth and customer loyalty.