2021 saw much digital transformation; Spice World achieved efficiencies via investments in people, systems, equipment & process improvement.

By Danielle Brasher

Historically, supply chain disruption has been among the biggest challenges faced by food manufacturers. The pandemic intensified and multiplied these challenges, which is why companies turned to technology to address supply chain challenges, implement pandemic pivots, streamline operations, and expand and diversify their supply chains.

Spice World, the largest supplier of fresh garlic to America’s supermarkets, is one such company. In 2021, Spice World deployed technology and made strategic investments in people, systems, equipment and processes to transform its operations to become a world-class manufacturing organization.

In the process, the company gained the means to better respond to disruption. The timing was fortuitous as the COVID-19 pandemic created a scenario in which demand for Spice World products increased dramatically while exposing operational inefficiencies.

Embarking on a digital transformation journey can be viewed as costly and arduous and might not immediately give recognizable results. In this regard, it helps to look at the big picture benefits of digital transformation.

Spice World’s technology deployment went live March 1, 2021, via the implementation of an enterprise resource planning (ERP) solution, a warehouse management system (WMS), a transportation management system (TMS), a shop floor visualization solution, and back-office automation. This digital transformation helped the company handle a significant uptick in business spawned by the pandemic, resulting in 35% growth in revenues and 35% profit increases over a period of three years.

In addition to enabling the business to scale and expand capacity to keep up with customer demand and grow top line revenues, the project has also improved efficiencies and productivity that has had a substantial impact on the bottom line. Agricultural businesses are “penny businesses” due to their nature and the tremendous volume; every percent improvement can therefore translate into hundreds of thousands if not millions of dollars. Every improvement in yield of one percent for Spice World’s California agriculture operations translates into $1 million in profit per year.

As a result of this improved productivity, operational visibility and ability to deliver to promise, the company has been able to scale, adding $100 million in revenues. The total project cost was $1.5 million in hard costs and $500,000 in internal labor costs; this equates to a 50x return on technology investment.

For every pound of garlic, Spice World now knows the exact grower and field it originated from. When the garlic is run through the manufacturing facility to size and grade it, the company understands the amount of shrink and yield and how much saleable product is left. Having this information in real-time allows the company to make much better long- and short-term decisions – such as how to finetune equipment and in determining the best and lowest yielding parts of the valley, to guide seed planting for the following season.

Spice World has increased visibility into critical business functions so it can tell how sales are trending, view Key Performance Indicators, see open orders, invoiced orders, and monthly receivables.

Spice World’s business process improvements and systems modernization have positioned it well from an operational visibility and management perspective so that it can execute against its robust global merger and acquisition pipeline in the future, and, with the new next-generation systems in place, Spice World was able to launch the company’s first new product offering in 13 years – its new Global Flavors 5-SKU-product line of flavor enhancers.

While the food manufacturing sector leverages myriad technologies, it is the enterprise resource planning (ERP) software solution that is the core technology and operational backbone that drives best practices within process improvement. The future state for critical operational processes should command significant focus in any digital and business transformation roadmap.

ERP solutions are being used to address today’s challenges by empowering supply chain operations to succeed in realizing the value of process improvement. There are many ERP vendors that offer food and beverage-specific toolsets and broad industry expertise, but there is no one-size-fits-all solution; functionality and capabilities required can be unique to each subvertical and to each company. Therefore, finding the best fit software starts with defining an organization desired future state for process improvement. Independent, industry specific consultants can guide food and beverage operations in defining and documenting the organizations future state processes. These will then be scripted and used to select the best-fit ERP software solution that will reduce costs, increase efficiencies, and improve overall business performance.

Having a well thought out plan and attention to change management and adoption are key to an organization’s successful digital transformation. Having the guidance to select the right technological capabilities and then implement these solutions also helped Spice World in minimizing risk, ensuring the right processes and procedures are in place, and maximizing efficiency for the best chances for continued success.

Ultra Consultants Danielle Brasher, Industry Today
Danielle Brasher

About the Author
As an Ultra Consultants’ Senior Consultant, Danielle supports manufacturing and distribution clients throughout their business transformation journeys. Ultra Consultants is an independent enterprise software consulting firm serving the manufacturing and distribution industries in North America and around the world.

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