Lowering Costs of Food Manufacturing with ERP
Food manufacturers are being squeezed on multiple fronts. Costs are rising, as are regulatory pressures and food safety issues. Add to this volatile consumer tastes and consolidation in the food retail sector and you have an environment where cost control is a critical issue.
The issues food manufacturers face are complex. The industry is increasingly bound by strict government regulation that entails significant administrative effort. Food safety issues, appearing in media headlines on an all-too-frequent basis, add further scrutiny to compliance. Indeed, food safety is seen as the single most important issue among manufactures, and the demands to document information relating to food sourcing, material flow, traceability and more present an ongoing challenge. These complex demands have a real cost, one very critical to bottom-line profitability as major food retailers take on a larger role in controlling revenues.
What’s a food manufacturer to do? One source of relief is technology. ERP systems are providing the means to meet these challenges while improving internal business processes. By providing a framework to meet regulatory compliance demands, ensure product safety, and control costs, ERP is proving increasingly essential as a tool in the food manufacturer’s arsenal.
While many food and beverage software products are designed for discrete manufacturing of engineered products, the best are devised from the ground up for process manufacturing of demand-oriented production, with recipe-based materials management. Among the ways these latter systems are lowering costs for food manufacturers:
- Automating traceability of ingredients from origin to the final customer
- Speeding and simplifying the audit process
- Optimizing materials consumption (reducing waste)
- Extending shelf life of final products by speeding throughput
- Improving customer service and satisfaction by minimizing errors and avoiding costly penalties
- Providing accurate factory floor information for better process understanding and improvement
- Improving decision making by delivering greater visibility across operations
Advanced packages also offer special features for processors and packers of fresh and gourmet goods, such as consignment costing, day one for day one order and delivery, multiple product attributes and grades, retailer-specific packing, and catch weight labeling.
In today’s market environment, where food manufacturers have increasingly tight windows of profitability, a well-considered, well-implemented ERP system can mean the difference between struggling for survival and thriving.
Posted by Tom Muth, Senior Manager, Product Marketing.