How can ERP-enabled insights help small and midsize food and beverage manufacturers get ahead?
Today’s industry conditions can make it challenging for any small or midsize manufacturer to remain competitive. But for food and beverage manufacturers, there are hurdles inherent to the business. Perishable goods, strict safety standards and supply chain variability are all factors that must be contended with to be profitable.
In order to get ahead of these hurdles, food and beverage manufacturers are turning to enterprise resource planning (ERP) software, which offers deep insights on plant efficiency, quality control, point of sale and more.
From departmental metrics to enterprise-level monitoring, here’s how ERP-enabled analytics can support your food and beverage manufacturing.
Forecasting and Demand Planning
There are several factors that go into your inventory needs. For food and beverage manufacturers, it’s important to take into account the purchasing cycles of your customers as well as seasonality patterns that pertain to your products.
Many companies try to determine inventory needs by tracking numbers in spreadsheets and then budgeting a cushion of safety stock – a process that can be both tedious and prone to error. Fortunately, modern ERP systems incorporate sophisticated forecasting tools that make it easy to keep an accurate pulse on your inventory needs so you can make intelligent purchasing decisions based on tracked supply and demand.
Modern ERPs include forecasting features which help food and beverage manufacturers automate the following analytics processes:
- Gather data: Compile unit and dollar historical data for product sales and usage of components
- Calculate forecasts: Use historical insights and algorithms with what-if analysis, as well as optional input from customers, managers and salespeople, to calculate forecasts
- Analyze data: Analyze forecasts, bookings, sales and material usage and compare forecasts to actual demand and historical trends
- Adjust the forecast: Adapt forecasts for promotions, new opportunities, competitive situations and other market factors at the group or item level
- Optimize inventory levels: Calculate ideal safety stock, order size and reorder points
- Conduct top-down forecasting: Use planning bills to calculate a single forecast for an item group and then consume the forecast upon sale for configure-to-order products; for common components with unlimited end-item possibilities, forecast components rather than end items and consume the forecast when components are used
Production Planning and Scheduling
The other side of the profitability coin is keeping operating costs in check and maintaining high levels of productivity in order to achieve an ideal margin. Through the dynamic workflows facilitated through ERP software, food and beverage manufacturers can now optimize their production scheduling to minimize downtime and maximize efficiencies.
Today’s ERP solutions offer an Advanced Planning & Scheduling (APS) tool that can help increase on-time performance throughput and reduce operating and inventory costs. APS helps manufacturers create lean manufacturing plans for each order, connecting supply with demand and orders with jobs and POs in the system. With these dots connected, the APS engine can then run “what-if” scenarios. For example, a user could input additional overtime hours or a high priority order to see instantly which customer orders would be affected and how delivery timing would shift. With these insights at their fingertips, manufacturers can remain agile to shifting priorities while maintaining timelines for their customers.
Market conditions are ever-changing for food and beverage manufacturers. Some of them are cyclical, and others are unexpected. To be successful, small and midsize manufacturers especially must continuously improve their processes. But without visibility into your operations, how can you know that your improvements will make a difference?
Don’t leave your efforts to trial and error. Implementing a modern ERP system with analytics capabilities will help you play out what-if scenarios to ensure operational changes large and small yield positive results, for you and your customers.
How can ERP kick-start your organization’s digital transformation?
Download our e-book, “ERP in the Age of Digital Transformation: A Guide for Manufacturers” to learn more.