5 PLM Benefits When Managing Complex Recipes and Compliance

Lessons from Red Bull’s integration of Aras Innovator into SAP S/4HANA.

Engineers can learn many lessons from the late November announcement about Red Bull selecting Aras Innovator as its product lifecycle management (PLM) solution. The company will integrate the technology into its SAP S/4HANA tools for better recipe management, compliance support and communication throughout its global partner network.

With operations in 175 countries, Red Bull sells over 11.5 billion cans of its energy drink annually, emphasizing the need for accurate and up-to-date product data accessible to all stakeholders. (Image: Bigstock.)

With operations in 175 countries, Red Bull sells over 11.5 billion cans of its energy drink annually, emphasizing the need for accurate and up-to-date product data accessible to all stakeholders. (Image: Bigstock.)

The food and beverage industry stands as one of the most tightly regulated sectors, with rigorous health and safety compliance standards spanning diverse markets. The processes involved in manufacturing, transporting and distributing food demand transparency and traceability to effectively address a spectrum of hazards—ranging from chemical, biological and physical allergens, toxins and cross-contamination risks.

Ensuring the safety of the food we consume, from its source to our table, is imperative. Adherence to rigorous recipe and quality standards plays a crucial role in achieving this goal.

Recipe management in the food industry is inherently complex, involving precise coordination of diverse ingredients, quantities and production processes. This is further compounded by the need to meet evolving consumer preferences, industry standards and the demands of efficient make-to-stock manufacturing. Proper recipe management helps food and beverage companies ensure regulatory compliance and handle variations in global supply chains to achieve seamless and optimized production outcomes.

This article covers the intricate challenges of managing complex recipes within the food and beverage industry and explores the role of PLM solutions in addressing these challenges. It will then discuss how these technologies played a pivotal role in Red Bull’s decision to select Aras for complex requirement management.

Navigating the Intricacies of Recipe Management in the Food and Beverage Industry

The complexities involved in managing recipes within the food and beverage industry are not to be underestimated. Crafting and maintaining recipes is anything but straightforward when meticulously selecting diverse ingredients, working with varied supply chains and adhering to stringent safety regulations. Recipes outline ingredient quantities and production steps, allowing for the creation of various products.

In process manufacturing, a recipe is sometimes used interchangeably with a bill of materials (BOM). The main distinction between a BOM and a recipe is that a BOM describes materials—including assemblies and sub-assemblies. A recipe, however, outlines the steps in the production process of the consumable parts of the product. A master recipe can refer to multiple formulas based on the manufacturing configuration of a semi-finished good.

A BOM focuses on the materials necessary to manufacture the finished good, including packaging, artwork, costing and more. Simply put, a BOM represents the production version from a master recipe. Therefore, BOM timeliness and accuracy are crucial for effective operations, regardless of manufacturing process complexity. BOM inaccuracies can result in substantial waste during the engineering, manufacturing or commercialization phase—with increasing costs as the product matures.

The food and beverage industry is not without its intricate challenges, particularly when it comes to the management of recipes. These challenges range from sourcing ingredients to regulatory compliance. They shape the industry’s landscape and demand strategic solutions for effective recipe management. These challenges can be summarized as:

  1. Standardizing recipes while accommodating diverse regional preferences and ingredient variations.
  2. Dynamically adjusting to sourcing variability.
  3. Adhering to stringent safety and regulatory standards, including environmental, social and governance (ESG) requirements.
  4. Innovating while maintaining efficient time-to-market.
  5. Ensuring the accuracy and reliability of data as recipes evolve.

The Role of PLM in Addressing These Challenges

Addressing these challenges requires a holistic approach, combining technology solutions, regulatory awareness and a keen understanding of global market dynamics. In other words, successful recipe management involves navigating the industry’s complexities while ensuring consistent, high-quality products that meet both regulatory requirements and consumer expectations.

PLM plays a pivotal role in addressing these complexities by providing an operating framework to drive requirement definition and validation. These PLM roles include:

  1. Controlling processes to ensure adjustments for regional preferences and ingredients are efficiently documented and traceable—promoting consistency across diverse markets through a centralized approach to recipe and BOM management.
  2. Enabling real-time visibility into the supply chain, helping businesses dynamically adjust to sourcing variability—providing insights into ingredient availability, quality and pricing to support informed decision-making, optimization and impact mitigation.
  3. Incorporating robust compliance management features, including sustainability and ESG requirements to ensure that recipes align with the latest safety regulations and industry standards, promoting transparency and accountability in the production process. This includes the ability to report on continuous compliance adherence to standards established by those regulators.
  4. Expediting the innovation process by streamlining collaboration among cross-functional teams—facilitating the rapid development and approval of new recipes, helping companies stay agile in responding to market trends.
  5. Ensuring accuracy and reliability by acting as a global repository for recipe data—leveraging real-time updates and version control mechanisms to safeguard against errors in data management.

Red Bull’s Decision to Select Aras

In the release, Red Bull emphasizes the need for “accurate and up-to-date product data adhering to food and beverage industry regulatory standards.” It therefore selected Aras Innovator to offer a unified environment, enabling collaboration and adaptation to unique industry demands, driving product requirement change alignment across all functional disciplines and parties.

Red Bull also highlighted a cultural fit with Aras, citing it “considered many factors in evaluating PLM solutions. In terms of culture, Red Bull and Aras simply fit together. This, in addition to their international reach and expertise, gave us the confidence that they would be the best technology partner for us.”

Red Bull clearly stated their high-level of expectation with respect to Aras. “Transparency and security throughout the entire supply chain is crucial for us as a global beverage manufacturer. Aras Innovator provides a unified environment that allows all users of product information to collaborate around a single set of processes and data.”

In response to this, Aras claimed that “Aras Innovator will enable Red Bull to configure their PLM solution to meet their unique needs as well as adapt it to respond to new requirements or take advantage of (…) innovation. In the food and beverage industry, regulatory standards require very precise information about ingredients and supply chains.”

In other words, Red Bull selected Aras with the belief that it will help them with the five challenges mentioned earlier in the article.

The announcement also hinted at the broader implications of the collaboration, suggesting a potential expansion of Aras Innovator’s capabilities beyond product requirement management and the opportunity to refine Aras’ template for consumer packaged goods in light of the integration with Red Bull’s SAP S/4HANA tools.

Finally, Roque Martin, CEO at Aras, highlighted that “Red Bull is much more than just an energy drink—it is a company that has a deep-rooted passion for its brand and a unique drive to inspire people and ideas. As a company with a vision to transform the way the world makes products, we wholeheartedly understand this and look forward to giving this partnership wings with innovative, enterprise-class solutions.”