Tech for Food Producers and Related Organizations: How ERP Helps in Manufacturing

As a manufacturer in the food and beverage space, your organization has to work hard to stay competitive. Amid all the challenges facing modern manufacturers, including quality control, logistics management, and fast and accurate order fulfillment, you must deal with safety and compliance requirements aimed specifically at your sector.

Dealing with all of these pressures is difficult, but there are ways to stay competitive. Perhaps the most direct way to help your business thrive is to choose the right technology platform for your needs.

With a strong enterprise resource planning (ERP) acting as the beating heart of your food manufacturing company, you’re ready to cope with the many management challenges inherent to the food and beverage industry. Learning more about this technology will help you choose the perfect ERP for your needs, without wasting any time.

What’s the Purpose of ERP in Manufacturing for Food Providers?

As a manufacturing business, you need a centralized system to provide end-to-end visibility into your manufacturing processes, and to connect all functions, departments, and partners. This is naturally challenging, as there are countless moving parts and priorities to consider in the food space, from managing recipes to preventing waste of ingredients.

ERP is this central hub, connecting everything from procurement, inventory management, and production planning to compliance, quality control, and customer relationship management. When you have a strong ERP in place, your employees don’t have to juggle a variety of disconnected software tools. They simply log in and get their work done.

Not just any generic ERP will suffice for this role, however. Standard ERP solutions that haven’t been built with the food manufacturing industry in mind may be lacking key features or require modifications to get the job done. That’s why your job isn’t just to implement an ERP, but to implement the right ERP.

What Everyday Challenges Can Food Manufacturers Address With ERP?

The value of a new software tool can be measured by its ability to resolve common issues for its users. In the food and beverage space, the problems and challenges are well-known and demand a tech-driven response. These include:

• A need for quality assurance and compliance: Your brand must carefully manage and measure the quality of its products. This is true in terms of compliance with Food and Drug Administration (FDA) rules as well as the Food Safety Modernization Act (FSMA). Of course, these regulations are just the beginning — QA should use them as a starting point rather than an end goal. The visibility and traceability provided by a comprehensive food industry ERP are crucial factors.
• Supply chain oversight and recall capability: Visibility and traceability are also essential in case a recall is issued for your products. While it’s clearly ideal to never incur a recall in the first place, when one does occur, you need to be ready. Having clear traceability and reporting regarding your supply chain and partners means you can run a fast and efficient recall, affecting only the products that are truly impacted.

A capable ERP system is also helpful in terms of universal manufacturing challenges like the need for inventory optimization, efficient logistics operations, and continuous improvement. The powerful connectivity of a modernized ERP system delivers value throughout your organization.

Amid escalating recalls, see how the right ERP helps with FDA compliance and FSMA compliance.

12 Benefits of ERP in Food Manufacturing

The value of a high-quality ERP system touches every corner of your food manufacturing operations. Some of these benefits are about managing the specific issues that come with the sector, while others are more general. Taken together, they represent a significant return on investment.

With an effective food manufacturing ERP system, you can:

1. Maintain consistent recipes and formulas and manage changes.

You need to keep a close watch on the consistency of the formulas and recipes you use in food and beverage production. Keeping the recipes accurate is essential for the quality of the finished products and, ultimately, your customers’ satisfaction. An ERP system that keeps recipes for the whole company is the key.

Especially when you produce goods across multiple sites, you must have a centralized way to keep track of your formulas and to make sure any changes are applied consistently. Furthermore, if there’s ever a recall, you need exact traceability of which recipe was followed. That knowledge leads to efficient, quick recall management.

2. Trace supply chain movements.

The food manufacturing supply chain consists of many levels of suppliers and producers, often dealing with perishable items that need careful oversight. Using ERP to provide centralized visibility enables effective tracking and timely delivery of either raw materials or finished goods.

This improved level of supply chain oversight provides increased customer satisfaction and prevents waste. Effective supply chain management that begins at the raw materials level can prevent disruptions that could result in losses for your company and its partners.

3. Track expirations and manage shelf life.

Managing the shelf life of both ingredients and products is an important money-saving practice for food manufacturers and distributors alike. Using a purpose-built food manufacturing ERP system allows you to track quality and freshness testing and keep your items at peak quality.

By using testing protocols like pH, viscosity, temperature, and weight measurement, you can keep watch over each ingredient. Then, once those ingredients have become finished products, you can apply shelf life rules and alert criteria to ensure items never stay too long at warehouses or distribution centers.

4. Comply with FSMA and other FDA regulations.

Staying on top of regulations like FSMA calls for clear, effective visibility traceability at every step of manufacturing and production. Purpose-built ERP technology provides these traits, allowing your business to stay compliant during day-to-day operations and provide proof when inspected.

The element of automation is also important in compliance. Relying on fewer manual processes reduces the risk of mistakes, both in production and in record-keeping. A smooth, automated, and highly visible manufacturing process is ideally positioned for compliance.

5. Control product quality.

As a supplement to recipe and formula management, your organization can use an ERP system to record quality specifications for recipes and ingredients. This ability to keep a centralized and visible database of standards and specifications ensures it’s easy to maintain high standards.

Quality control matters for both compliance and customer service. Items made to carefully managed quality standards are well-positioned to comply with regulations and please your consumers.

6. Achieve better trade promotion management.

Marketing your products to wholesalers or retailers is a complex process separate from the actual manufacturing of the items. ERP integration with trade promotion management (TPM) technology allows these two functions to sit side by side.

With data from your ERP software fueling a TPM system, you can engage in:

• Volume forecasting.
• Financial forecasting.
• Trade budget management.
• Deduction.
• Settlement.

7. Enable continuous improvement

Continuous improvement in the manufacturing industry depends on reliable, up-to-date data. With this information, you can ensure your operations are on track to steadily improve and target areas for attention, down to a highly granular level.

Identifying non-conformance and acting on it is a way to enable continuous improvement. By detecting when quality doesn’t meet either industry or internal standards immediately, you can follow up quickly, make adjustments, and track the results.

8. Lower excess inventory and free up working capital.

Inventory management is another area where up-to-date data can make all the difference. As long as your organization is aware of current levels, production capacity, and projected demand, you can minimize excess inventory.

Improving inventory through high visibility and proactive management is a good way to run a more efficient and less wasteful organization. This can free up working capital, allowing you to apply that cash to other operations where it can have a greater impact.

9. Reduce forecasting time.

The accuracy and speed of forecasts depend on the quality and availability of data from throughout your organization. Centralizing this data in an ERP can drastically reduce the time needed to create forecasts. Those projections in turn help you optimize other parts of your manufacturing process.

Introducing a dose of automation into parts of the forecasting process such as data collection and management, a purpose-built ERP helps you become adept at understanding what’s coming next for your organization.

10. Improve fill rates.

Managing inventory is about more than just keeping items on hand as long as possible. You want to ensure your items are at a sweet spot, where you don’t incur stockouts, meaning you run out of needed products.

An ERP system with effective inventory management capabilities helps you precisely hit your targets, fulfilling orders and not encountering stockouts, while also avoiding the costs of excess inventory.

11. Manage active ingredient concentration.

Carefully overseeing the potency of your food batches — the percentage presence of the active ingredient — has major implications for your business. Higher potencies generally equate to higher raw material costs, and recipes call for specific levels of potency.

Calculating the perfect potency via manual processes is challenging and potentially imprecise, which makes this process a perfect candidate for automation via ERP. A food manufacturing ERP platform with the right tools for concentration management is key to ensuring quality while cutting costs and reducing waste.

12. Link to eCommerce systems.

Whether you’re making business-to-business sales to retailers or selling directly to customers, eCommerce management is a complex area of your business. Linking your food manufacturing ERP to your eCommerce system is a way to provide a valuable source of data for your order management marketing and sales.

With this type of ERP integration, your ERP software can still act as the single source of data truth for your business while you work to improve the performance of your B2B or B2C eCommerce efforts.  

These advantages are yours when you use Sage X3, the purpose-built food manufacturing ERP available from Net@Work. Get deeper into the advantages of food manufacturing ERP with Sage X3 resources.

How Do You Choose and Implement ERP in Manufacturing?

Unlocking all the benefits of manufacturing ERP is only possible when you choose an effective solution for your specific needs. Rather than just settling for any system and provider, you should make sure you select technology that can serve as a key piece of your tech ecosystem for years to come.

Here’s what you should ask during the selection process:

What Defines a Good ERP System in Manufacturing?

There are a few marks of a suitable technology tool for your needs. The first is suitability for your industry. A generic ERP solution that would require excessive modification to suit your day-to-day needs as a food manufacturing company can’t compete with one that is effective from day one.

Furthermore, you should make sure your technology provider offers a helpful and supportive experience both during implementation and on an ongoing basis. This level of partnership can help you make the most of the technology.

What Does the ERP Implementation Process Look Like?

ERP implementation requires integration with your other applicable systems — this ensures that the platform can live up to its potential as a central hub for data. You should also ensure every user is trained on the new system — low uptake rates or a failure to understand the system’s features can limit effectiveness.

What Are Some Potential ERP Implementation Challenges?

Potential issues with ERP implementation include:

• Choosing a system that can’t grow alongside your business and will require replacement within a few years.
• Picking a solution that requires expensive or time-consuming alterations to suit your industry’s needs.
• Failing to train your team on the new system and achieve high usage rates.
• Neglecting to integrate the ERP with your other enterprise software.
• Working with an ERP provider that won’t support you or offer effective customer service.

Now that you’re aware of what you’re looking for in an ERP solution, you can learn more about Sage X3, a next-generation ERP for the food manufacturing space.

Ready To Get Started With a New Manufacturing ERP?

Unifying your food and beverage manufacturing processes around the right ERP system is a leading way to digitize your everyday operations, boost operational efficiency, and stay competitive. From compliance to inventory to eCommerce, every element of your business runs through this type of system.

Sage X3, designed for the food and beverage industry and overseen by the supportive, experienced Net at Work team, is your ideal choice. Contact an expert and learn more about ERP for food and beverage manufacturing.