The Dairy Industry, between complexities and challenges

A highly complex world with massive responsibilities towards consumers

The processing of dairy products is increasing in order to meet the demand for milk-based products from an ever-growing population. However, behind the allure of delicious and nutritious food products, the agri-food industry as a whole is immersed in a series of critical challenges: crucial nodes that require special attention as they threaten the efficiency, safety and sustainability of the sector.

 

The dairy processing business play a challenging role, encompassing both production and commercial aspects. sedApta supports companies in overcoming some of the key challenges by offering possible solutions to these critical issues, thanks to a holistic and collaborative approach aimed at ensuring long-term flexibility and prosperity.

The challenges of the Dairy industry

For a consumer, buying a carton of milk, a pot of yogurt, a pack of mozzarella cheese or a piece of cottage cheese is a simple gesture. However, behind this purchase, there is actually a great deal of operational and organizational complexity.

 

Products

The dairy sector is a diverse and complex supply chain sustained by the efforts of tens of thousands of individuals. Before products reach the shelves, various actors are involved in the production, quality control, and analysis of raw materials and finished goods.

 

Perishability of raw materials

The perishability of raw materials is one of the main challenges in the dairy industry, as milk and its derivatives products require strict storage conditions to maintain their quality and food safety. In general, this industrial sector requires precise inventory management and rapid distribution to prevent product expiration before reaching consumers. This aspect is crucial for reducing waste and ensure the profitability of the entire supply chain.

Thanks to the sedApta solutions, companies have the opportunity to optimize the procurement of raw materials and manage potential excesses at risk of obsolescence through:

  • Defining a more accurate mathematical forecast, updated with the help of the sales network (consensus forecast)
  • Planning and scheduling based on actual daily needs
  • Control throughout the entire supply chain through a simulative control tower.

Short shelf life

The limited shelf-life of finished products also requires very precise management to avoid economic losses associated with unsold products and food waste.

By adopting innovative practices and advanced technologies offered by the sedApta suite, dairy companies can optimize the planning of the entire supply chain and streamline the production plan. This involves proactive scheduling of raw materials, semi-finished goods, and packaging.

 

By-products and Derived Products

Another very important factor is the optimization of the use and destination of milk-derived products, allowing for the full utilization of raw materials, reducing purchasing costs, and the risk of obsolescence. sedApta supports dairy companies in this area through highly advanced planning logics.

Production Process

Dairy products are subject to strict safety regulations in food production, as they must comply with the required certifications and standards.

 

Use of tanks and transfer pipes

A crucial aspect in the production process of the dairy sector is the verification of tank and pipeline availability. The sedApta scheduling algorithm can manage finite-capacity tanks, modeling the availability of pipelines, including washing and sanitization phases, considering product changes and periods of non-use.

 

Management of excess received raw materials

The allocation of raw materials across different production sites is a matter of attention too, as one must consider the actual needs of the facilities, storage capacity, the possibility of downgrading and reusing the material, and transportation costs. The planning system is able to readjust production plans based on the actual arrival/availability of raw material.

 

Market

With the completion of the production process, the work is far from over: in fact, this is the moment when all the more delicate commercial aspects come into play. This involves defining volumes, delivery schedules, price lists, prices, discounts, offers and promotions.

 

Promotions

Promotions are marketing activities aimed at stimulating the purchase of a product at a time when normal sales would be lower. Promotions can take various forms, including discounts, special offers, bundles that combine different products at a discounted price, and advertising campaigns. Managing the impact that promotions have on production and procurement is particularly critical for materials and products with short shelf life.

 

sedApta applies different techniques for promotion management, aiming to help companies improve sales forecasts:

  • Analyzing historical sales data to strategically plan promotions;
  • Segmenting customers based on their preferences and buying habits;
  • Monitoring results to assess the effectiveness of promotions.

 

Daily Distribution of Demand

The freshness of the product and raw materials requires planning and production with precise logistics, minimizing the inventory volumes of finished products and raw materials at risk of expiration as much as possible.

 

To achieve this, it is necessary to distribute weekly sales forecasts across the days of the week based on patterns defined according to the product characteristics, the type of demand, and sales channels. By leveraging the artificial intelligence algorithms offered by the sedApta suite, it is possible to automatically calibrate the distribution percentages of patterns based on market evolution.

In conclusion, addressing challenges in the dairy supply chain requires a strategic approach and the adoption of innovative solutions. Through the implementation of sedApta solutions, collaboration among supply chain stakeholders and a constant focus on operational flexibility, companies can overcome challenges and create a more robust and efficient supply chain.

Do you want more info?

Contact us