ABM Advisor: The ABM Blog

  • Jul 22 2018

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    What do the new food labelling laws mean for manufacturers?

    As of July 1 when new regulations came in, all food sold in Australian retail stores must be labelled with its country of origin. For two years the labels were optional but they're now mandatory - and many Australian food manufacturers are pleased with the change.What does the new law specify and why is the change beneficial for Australian food manufacturers?What do the new food labelling laws specify?The law applies to most of the food sold retail in packages, as well as unpackaged seafood, certain meats, fruit and vegetables, herbs and spices, as well as fresh fruit and vegetables in transparent packaging. It does not apply to unpackaged food like sandwiches or baked goods, products that are only exported, and food sold in restaurants or canteens.

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  • Jun 29 2018

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    How to export food to China

    Food manufacturers in Australia have a huge market to exploit domestically, but the the international market provides near limitless opportunities for growth. A popular destination for Australian food these days is China - we're their sixth largest food supplier according the Australian Trade and Investment Commission (Austrade), shipping $5.3 billion worth of edible goods to their shores in 2016.Here's what you need to now to start exporting food to China.      What makes China a good option for food exporters?China is one of the fastest growing economies in the world. A burgeoning middle class means there are always new people who're ready to try interesting food products from around the world. The country is second in the world behind the United States for total food imports, Austrade reports, with the total value exceeding $160 billion in 2016.Already this year we've seen reports about Daigou, the Chinese practice of buying products on behalf of someone else, being incredibly popular. ABC News spoke to a Sydney mother that buys groceries to ship to customers in China, who told them, "Australia's organic food is very famous in China" - it seems there's far greater demand for Australian food products in China than there is supply.

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  • Jun 28 2018

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    The importance of a solid CRM system

    A CRM (customer relationship management) system is a key piece of software all businesses should use to make get the best from (and for) their customers. CRM systems can improve customer retention by up to 27 per cent according to Salesforce, a number that can translate into a sizeable amount of revenue over time.Beside improved retention, what are some other benefits of CRM software?Organisation of informationCRM software centralises all of your customer data in one place. This makes it a lot easier to find and therefore easier to use.Without a CRM solution, all of the information in your business might be there, but it could be in an unusable form.Data analyticsCRM software that has all of your customer data in one place gives the possibility for data analytics to take place. Even if the CRM itself doesn't do the analysis for you, its collection of the data into one database makes it a great deal more manageable than trying to enter that data by hand.

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  • Jun 7 2018

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    Automation: Positives, negatives, limits?

    If there's a theme running through 20th century manufacturing practices, it's automation. Every day, our technology improves and the list of tasks that can only be completed by a human grows ever shorter. But despite the benefits to productivity that automation can bring, it's a process that has its limits (or at least, it does today).This has been demonstrated in recent times with some fairly high profile examples. Perhaps most vivid is the automotive and renewable energy firm Tesla, and the production of its mass-market electric sedan, the Model 3. Ambitious targets and lofty promises abound, yet Tesla has failed to produce enough vehicles in the time they said they would.What can this situation teach us about the limits of automation, and its positives and negatives?Too many robots spoil the brothTesla is a company well known for its technological prowess. It was one of the first innovators in bring fully-electric cars to the masses, and making them appeal not only to tech geeks, but wider car buyers too.All that said, even titans sometimes fall. The actual production for their latest creation, the Model 3, is far behind what was initially promised and scheduled. The reasons for this could be many, but two Wall St analysts, Max Warburton and Toni Sacconaghi, have argued that the main bottleneck in their production process is the huge amount of automation they're using in their factory. And as it happens the CEO, Elon Musk, agrees:

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  • May 29 2018

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    Are changes coming to the dairy products industry?

    The Australian Competition and Consumer Commission (ACCC) recently released their report on the Dairy industry. Among it's 200 odd pages is extensive discussion of the commercial relationships that exist between dairy farmers, dairy food processors or manufacturers and retailers like supermarkets. Changes to the industry are being mooted as a result.What do dairy product manufacturers need to keep an eye out for moving forward?What does the Dairy Inquiry report say?Of most interest to dairy food manufacturers is the report's finding that supermarket prices for milk don't have a direct impact on the price farmers get for their product. The report states that the impact of cheap house-brand milk in supermarkets falls mostly on the processors, cutting into their profit margins, rather than influencing the farm-gate price. The report also explains that farmers themselves are the ones in the supply chain with the least bargaining power. With most being small compared to other players, as well as selling a generic product, there is little that farmers can do to bargain their way into better prices. Conversely, dairy processors have a fair degree of influence over farmers and the makeup of the contracts they sign with them.As the ACCC Commissioner Mick Keogh explained, "processors can impose milk prices and other terms of milk supply contract terms that are heavily weighted in their favour. Some milk supply contracts also contain terms that restrict farmers' ability to change processors for a better offer. These issues ultimately harm dairy production efficiency and reduce the effectiveness of competition between processors."

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  • May 22 2018

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    Should you join Australia's growing organics market?

    The organic food market in Australia is currently in the midst of a boom. According to the recently released Australian Organic Market Report 2018, the total value of the market sits somewhere around $2.4 billion dollars. The same report states one in six Australian households has purchased organic products in the last year.With ABM's manufacturing module, making the shift into new market segments is manageable. But what are organics and is adding them to your product portfolio a good idea?What is 'organic' in Australia?While the common meaning of organic is to be produced without the benefits of artificial chemicals, there are specific criteria products must meet  to be certified organic.There are six separate organisations in Australia that can certify goods as organic - products need to meet at least one of these party's criteria before they can be sold as organic.For food products to be certified organic in Australia, they have to meet a number of criteria.A fast growing marketThe organics market is growing at a rapid pace. Compared with 2016, an additional 384,000 households purchased organic products in 2017 and the market grew by 13.6 per cent overall, according to the Australian Organic Market Report 2018Andrew Monk, the chair of Australia Organic said that the millennial generation was driving the majority of the demand."Millennials know more, they demand more and they expect more," he recently told the AAP.For them, the increased price is justified for the peace of mind eating organic products brings. Fortunately for organic food manufacturers, millennials are only growing as a proportion of the food buying market. Currently, cost is the greatest barrier to people buying organic, according to the Organic Market Report. As the purchasing power of millennials increases, those who want to buy organic but currently can't afford to will begin to enter this premium market.How can you expand into organics?There are some hoops to jump through but if you can find a niche that's profitable it may well be worth doing entering the organics sector. Organic products often retail for a far greater price than their non-organic counterparts. Providing you can find a manufacturing process and suppliers that keep your costs low enough, organic products command a premium that others can't. In an era of $1 supermarket milk, going organic is one of the few surefire ways to both command a higher price for your product and still have a customer base willing to make the purchases.For more information on how ABM's software can take your food manufacturing operation to the next level, request a no-obligation product demo today.

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  • May 9 2018

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    Innovation in the Australian food manufacturing industry

    The Australian food manufacturing industry is a place where innovation thrives. It's a sector that's often under pressure due to slim margins, high inputs and fierce competition.It's also an industry that faces many troubles, one of the most significant being the massive amount of food that's wasted both pre and post consumer. Here we take a look at the efforts of one company, Freeze Dry Industries, to minimise food waste and increase revenues for food manufacturers.Food waste in AustraliaAustralia has a food waste problem. That's not quite fair - the world has a food waste problem, in which Australia plays its part. Approximately a third of the food produced worldwide each year for human consumption is wasted, according to the United Nations. In absolute terms, that's some 1.3 billion tonnes being lost or destroyed every year.A great deal of food is wasted before it even hits supermarket shelves because it's too ugly. A series run by ABC called "War on Waste" revealed, for example, that banana farmers are sometimes forced to throw away 40 per cent of their crop yield because the bananas don't fit the standards that supermarkets and other retailers set. 

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  • May 1 2018

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    How to expand your food manufacturing business

    In times when business confidence is high, the natural inclination is to expand. But while expansion can be rewarding for those who succeed, it can wreak havoc on businesses should they fail.So, how can you expand your business without running the risk of ruin?Manufacturers in Australia have high business confidenceThe Sensis Business Index for March 2018 has revealed that manufacturers in the Australian economy are the most confident about their businesses they've ever been in the last ten yearsScores are calculated by subtracting the percentage of business that are worried about their business future from the percentage that are confident about it. The manufacturing industry got a score of +55, the highest Sensis has recorded since beginning in 2008. A further insight speaks volumes about the great position manufacturers feel themselves to be in - only once before in the last decade has manufacturing confidence been higher than business confidence overall.The reason for the confidence is multifaceted, but it's due in part to the profitability manufacturing experienced in the last quarter - the best performing sector by some margin.What is the result of all this confidence? For many food manufacturers, it will manifest itself in the desire to expand operations. When you're feeling optimistic about the future of your business, it makes perfect sense to try and grow.Food manufacturers are feeling confident about their business futures. What's next?The dangers of business expansionMany businesses, for example, can have issues with cash flow.It should be made clear at the outset - business expansion is a good thing. It's what's needed to continue making profits and reaching more customers with great products. But it's also something that shouldn't approached recklessly.Many businesses, for example, can have issues with cash flow. They take loans to finance their expansion and subsequently find their stocks of available cash for operating has been absorbed by debt servicing. Another example is staffing issues. A small business can be managed effectively by one person that knows everybody's name and works with them closely. But as you get bigger and bigger, this direct-contact approach becomes less and less tenable. Businesses that don't have systems in place to automate aspects of production or standardise management techniques can get into hot water when one person can no longer keep things under control.How can ABM help?Successful expansion requires a lot of things to work in concert, including the software you choose base your business operations on. For this, ABM is king. Our software works by starting at the core with a solid accounting system. To this, further modules can be added, including our manufacturing module. It manages and controls every step of the manufacturing chain, aiming to give you quality, efficient and productive results. When you can trust that the fundamentals are handled right, successful expansion becomes that much easier to manage.For more information on how ABM can help you expand your food manufacturing business, get in touch with a member of the team today.

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  • Apr 30 2018

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    3 tips for better food inventory management

    This too is a feature of ABM's manufacturing module. A visual presentation of your production schedules and capacity loads lets you plan efficient production runs. The integrated power of ABM means these schedules can be sent and linked to other aspects of the production chain.Getting your inventory under control is easy when you have the right software. For more information on what ABM can do for your business, get in touch today.

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  • Apr 23 2018

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    How to build a resilient manufacturing company

    The manufacturing industry in Australia is particularly volatile, according to "Building Resilience in Australian Manufacturing", a report released by the non-profit industry body, the Advanced Manufacturing Growth Centre (AMGC). When our economy is booming, the average output of the industry grows by 20 per cent but shrinks by the same proportion during downturns.Such volatility can be stressful for firms looking to keep a steady ship and not go under when times get tough. So with that in mind, what can you do to make your manufacturing business more resilient?Volatility and Australian manufacturingAs stated above, the volatility in the manufacturing industry is quite aggressive. The report explains that it fluctuates with an amplitude greater than many other countries round the world - the figure for the UK is 14 per cent and is 10 per cent in the US. It's argued that this is due in part to two factors:Terms of trade volatility - Australia is a relatively small economy, whose currency is heavily traded and whose exports are influenced strongly by commodity price fluctuations.Geographic isolation - being far away from other markets means changes in shipping costs are magnified.Such dramatic changes in output can have devastating effects on manufacturing businesses. Many are vulnerable to changes in customer numbers that at first glance would seem fairly insignificant. But for 30 per cent of firms, losing one customer would result in moderate to significant negative effects on their business, and 10 per cent would be forced to shut down entirely. Needless to say, operating on such a knife edge is about as far from resilient as a business could be.Manufacturing output in Australia is subject to dramatic volatility.How do you become a more resilient manufacturer?Becoming more resilient is key for businesses if they wish to stay afloat during economic downturns. But what exactly is meant by the word resilient? The report defines a firm as resilient if their earnings growth is higher than the average of their industry in a downturn. In other words, resilient firms are the ones that are able to continue trading and prosper in all economic conditions.Manufacturers that exemplify this characteristic have three traits in common:1. SuperiorityFirms with superior products are resilient because the value they create isn't affected by the economic conditions. Often this can come down to a product or service having few or no substitutes, which means demand is unaffected by downturns. Having a superior product gives manufacturers a strong competitive advantage.Key to developing superior products is investing in research and development (R & D). The report states that 60 per cent of resilient firms invested heavily in R & D in the boom times before downturns, so when the tides turned, they were able to innovate and keep ahead of the competition.Another is to compete on value - superior products are often more expensive. If you can sell a product that provides better value, you're less likely to be affected by things like exchange rate fluctuations.2. DiversityFirms with diversity in their product mix and geographic export markets are resilient because they've spread their risk. While economy-wide downturns are always possible, having your business spread across multiple sectors means a greater chance one or more of the sectors you serve will be financially healthy.Diversity doesn't necessarily require a number of different final products. Manufacturers should, alongside selling their own assembled products, take opportunities to be part of supply chains for other firms if they have the capacity. Should your product's industry begin to wane, you can continue to remain buoyant by selling intermediary pieces to other firms. Often this can be to firms in other countries - if you aren't exporting...

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