The future of food: John Gibson CA
Ontario-based John Gibson CA, Assistant CFO (Corporate Finance) at Furlani Foods in Canada, explains how understanding technology helps expand his role, the effect of commodities on supply chain, and the challenges of working at a manufacturer.
Like a lot of CAs, John began his career in the UK with one of the Big Four, but his Canadian adventure began when he met his wife in Glasgow. She was relocating back to Canada after college, and John had the CA qualification on his side: "As a CA, I can work anywhere. I was at EY at the time and asked for a leave of absence to find a job in Canada," he said.
"I went into Toronto one day, and as I was walking from the train, a partner at EY in Glasgow called to ask if I lived near Burlington, which I do, because an audit client needed a senior financial analyst.
"I went on the interview that Monday and got a call after with a job offer. I was in the right place at the right time!"
Tell us about your current role
Furlani Foods is one of many companies under one umbrella. It’s a family run business, with two separate manufacturers. We have Furlani’s (garlic bread garlic bread, breadsticks, garlic toast and biscuits manufacture) and in Quebec, we have a pickle company.
Those two companies are the main manufacture and there are some smaller holding companies and companies that own the real estate and land elsewhere - there are a lot of little companies I help out with. I’m responsible for reporting to the bank and ensuring reporting and audits are sorted.
On the garlic bread side, just last year, we merged with a US-based producer of specialty breads based in Milwaukee. Both of these companies have their own financial controller so that’s covered at the corporate level.
Along with your CA, you have a master's degree in information technology and business. How has this helped you in your accounting roles?
Technology is in everything we do, and people need to adapt very quickly to changing technologies. My thinking was to study how technology impacts business.
I’ve been told that it’s a plus to be able to hire someone with this additional knowledge. My background has certainly helped me understand what we do with technology and what needs to change.
At my current job, we’re going to migrate our system to another Enterprise Resource Planning (ERP) system and I’ll be involved in that on the finance side, but I want to strive towards working alongside the head of IT to help to develop that strategy.
Technology is in everything we do, and people need to adapt very quickly to changing technologies.
The new ERP we are implementing will hopefully bring with it the expected benefits of cost savings, streamlining and improving flexibility that usually accompany changing or upgrading a system.
One of the main reasons we decided to do this was due to us bringing the logistics function in-house. We previously used a 3rd party to handle everything and felt that it would be beneficial to change our approach.
We invested in software, but unfortunately it didn’t integrate with our existing ERP. At the same time, we introduced new sales software to track the data within the sales function. We were running three different types of software that didn’t talk to each other.
It meant things like tracing purchases to shipments was a time consuming manual process. The new ERP will allow us to integrate all three and give us a better overall outlook on the business, help us to identify issues immediately - rather than waiting to find them manually - and build a platform that will allow us to expand the business through organic growth or market purchases.
What are some of the challenges working for a manufacturing company?
In Canada, I first worked for a company that made industrial pumps for the oil and gas industry when oil was over $100/barrel. About eight months into my employment, we were purchased by a Fortune 500 company.
When oil prices started to fall though, companies put off their capital expenditure and delayed orders, which messed up our budgets because that revenue needed to be replaced. The company closed plants that didn’t generate revenue.
The hours were long, and because I worked at a better performing plant, there was intense pressure to compensate for shortfalls from other plants and improve results.
How do you deal with changing commodity prices in your job? How does that affect your supply chain?
You want the lowest cost possible. In the short term, we’re budgeting for fairly flat prices in 2018. There’s always the option to lock in prices using futures, but there’s more than one approach to mitigating risk.
We used to purchase margarine, for example, but now, we made a capital investment to make our own margarine. You can’t invest in capital expenditure to make wheat or flour, but you can eliminate some price fluctuations by bringing things in-house.
If an ingredient’s price is increasing, we can use something similar with the same quality that’s cheaper. We have that flexibility and are constantly testing new products.
There’s always the option to lock in prices using futures, but there’s more than one approach to mitigating risk.
We can make seasonable items as well. If we find the price of an input is higher than expected, we can adjust our prices or go back to the drawing board.
I also previously worked at a start-up brewery. I purchased the hops, wheat, barley, grain and sugar for that process. Weather impacts prices and the quantity of the harvest, and if you can have a contract for a certain season - but the farm didn’t produce enough - they’d pro rate everything and you’d have to use what you had.
This was difficult to manage because every beer has a specific recipe – I had to work closely with the brew master. We were working through shortfalls in ingredients daily, and as a start-up we didn’t have a lot of cash; raising additional capital was difficult.
We maximized our credit with suppliers and didn’t receive orders until we paid for them. We had to figure out what beers we could make with the ingredients we could purchase without sacrificing quality.
What do you anticipate as the future of technology in food manufacturing?
Food manufacturing is a high volume low margin business so it’s important to find any efficiencies. I know Kraft are continually investigating ways to use AI and robotics to increase efficiency, so it is certainly something that people feel will make a difference to the industry.
This is obviously a time and money saver. We recently bought a machine that stacks slices of garlic bread prior to packing - a job that was previously carried out by employees.
Bringing this machine into the production process allowed us to shift those employees to other areas where we were experiencing bottle necks as demand grew.
I believe as we grow, we will find ourselves in need of other ways to increase the speed of the manufacturing process and I have no doubt AI will play a big part. Not just in production, but in food safety compliance, cleaning and maybe even in the design process.
What is your most important piece of advice for CAs looking to work in manufacturing?
That’s a tough one. I’d probably say don’t go into it with the idea that you’ll just be looking at the finance side of the business. You will likely be involved with operations, sales, IT; probably every facet of the business. Be comfortable with stepping out of your comfort zone, if that makes any sense. These skills will make you a more rounded finance professional and make you invaluable going forward.
At a manufacturing business, I look at how long people have been there. If they’ve been there for 10 to 15 years, the work culture must be right because people don’t stay in jobs they don’t like.
That’s one thing that attracted me to where I am now. I work at a family-run business, and the original owner still comes to work every day at 80 years old. His son is the president of one business, and his daughter is the president of another. It’s great to see that kind of commitment.
How important do you think the power of a network is for progressing a career?
Building and maintaining a network of professional contacts is, I believe, one of the most important steps to career progression. I have read a few articles that are claiming as much as 80% of all jobs aren’t advertised through conventional methods and are filled through internal applicants or referrals.
It’s important to remember that networking isn’t a one-way street. When I wanted to expand my network I always found people more responsive when I reached out and offered something first. Whether it be through an article I’d read or a job I knew about. The more you give, the more you get.
Building and maintaining a network of professional contacts is, I believe, one of the most important steps to career progression.
I’d advise young CAs to start trying to build genuine relationships both at work and with clients. When I worked in audit, there were a number of CAs who moved out of public practice to a position with a former audit client.
Start networking close to home - if you work in public practice, start speaking to the managers and partners that you don’t work with on a regular basis and those in other departments. It may be obvious, but the more people that know you, the better.
If you work in industry, talk to managers of different departments. The majority of businesses aren’t looking for a finance team that simply sit in their office and crunch numbers all day. They need a business partner to help guide the company towards its goals. The more you network, the more you’ll see opportunities start to arise.
About the author
Andrea Murad is a New York–based writer. Having worked on both Wall Street and Main Street, she now pursues her passion for words. She covers business and finance, and her work can be found on BBC Capital, Consumers Digest, Entrepreneur.com, FOXBusiness.com, Global Finance and InstitutionalInvestor.com.