IT – the key to improving efficiency

Labour shortage has been one of the most pressing issues of the Latvian economy in recent years. And we all know that the reason for this has been the accession of Latvia to the EU which opened the labour market, and the rapid development of the national economy. Over a relatively short period of time, the economy of Latvia has reached the point, when a high price must be paid for available labour without the possibility to select it.

We have reached this situation very fast; a large part of enterprises was not ready for this by failing to make certain investments in the increase of productivity. The same goes for other production resources – i.e., raw materials, transport and energy resources. Therefore, it is high time to seriously consider the introduction of measures for the improvement of efficiency of labour and other resources used by enterprises. The issue of efficiency of performance of businesses is becoming more crucial in a single European market. The food industry has so far been sufficiently competitive due to the comparatively low cost of labour and raw materials. However, the situation has changed, and, despite the investments made in production in recent years, Latvian enterprises on average lag behind their competitors from “the old Member States” in terms of operational efficiency (turnover per employee). When comparing the labour force efficiency among meat and dairy processing enterprises in Latvia, Germany, Austria and Belgium, the difference varies by several times.
What are the solutions for increasing efficiency? Efficient company management was and still remains in the top position. Only efficient management can help ensure optimal adoption of decisions, setting of objectives and control of their achievement. Modern equipment and technologies in this case only serve as an instrument for the achievement of these objectives, and the functioning of this instrument directly depends on the ability of company managers to use it in an optimum manner.

Efficient management of a company sets high standards in regard to the quality of the decisions to be adopted, which in turn directly depends on the quality of information. Information must be precise, current and correspond to the essence of the decision to be adopted as much as possible. Taking into consideration the diversity of the decisions, information must include all directions and stages of the company’s operations. These requirements can only be met by modern and complex information systems that include software, technology and equipment.

Several information system solutions are offered to companies in the Latvian market. These can be intended for either general needs, such as accounting, or special needs of the company, for example, provision of recipe control. One must take into consideration that each solution has its own purpose for which it has been desigend and plan its use accordingly. For example, if a company only uses an accounting software solution, it enables one to meet the requirements set by law, but is not suitable for the fulfilment of specific tasks, for example, calculation of cost price at each stage of production. Wherewith it is necessary to involve additional people and perform additional actions involving data, resulting in low data processing speed and creating a situation, where the information on cost price reaches the manager with delay, is approximate and occasionally incorrect. By supplementing the accounting software with ERP (Enterprise Resource Planning) system elements, for example, stock records programme or production records programme, data exchange process and data registration accuracy accelerates and the number of people involved in data processing decreases.

Today, information systems are sufficiently developed to perform not only functions of data registration and analysis, but also work organisation functions instead of humans. ERP warehouse management solutions for food processing companies offered by CSB-System can be mentioned here as an example – this system not only registers stock movement and customer statistics and sends data to the accounting department in real time mode, but also performs automatic routing and organises operations of the warehouse, where the warehouse worker only has to perform the actions indicated by the system for the placement of finished products in the warehouse and completing the order.

It is important to note that, like in other segments, specialisation can be observed in the information technology sector also – i.e., different information system solutions are created for different sectors. This is only logical, because what is suitable for the metalworking sector, will not be suitable for the food industry, thus it is hard to talk about efficiency improvements. Therefore, it is essential to choose the most suitable solution for your company, so that it fully complies with the requirements of the company, is safe, efficiency-improving, reliable, quick and easy to implement.