Until early last year, consumer spending on food had remained remarkably stable. The industry had enjoyed a growth rate of about 4% over the last five years and trends were continuing in the same direction. Even total industry sales were split roughly evenly between retail (such as grocery stores) and food-service companies (such as restaurants, schools and hospitals).
But when the COVID-19 pandemic hit in March 2020, everything changed. Physical distancing mandates and country-wide lockdowns upended the stability the food industry had been experiencing. In that first month of the pandemic, retail sales of food grew 29% over the previous year as consumers stocked up on essential supplies. Meanwhile, sales declined 27% at restaurants and other public venues.
Even now, 18 months after the pandemic began, supply chains around the world are still being disrupted. Ingredients, packaging, maintenance materials and almost anything else a food processor needs to maintain and expand operations have been difficult to secure.
So how does a food manufacturer adapt? Supply chain management in the food and beverage industry has come a long way, but even those manufacturers who had nearly perfected production efficiency and just-in-time deliveries struggled throughout the pandemic.
Fortunately, the key to overcoming current supply challenges is within reach. Below, we outline some of the challenges our food manufacturing customers are currently facing, and the ways modern industry-specific software helps address these issues.
Current Challenges in the Supply Chain
Here are some of the biggest challenges food and beverage manufacturers are currently dealing with:
1. Supplier Management
Managing suppliers and vendors almost always seems like a chore. Between monitoring renewal dates, keeping track of certifications and overseeing audits and documentation, challenges abound in the onboarding of new suppliers or the management of existing ones. On top of this, many manufacturers have worked throughout the pandemic to diversify their supply chains due to global disruptions. When taken together, that’s a lot of emails, communication and documentation to keep track of, especially when this is all required to gain or maintain food safety and quality certifications.
2. Quality Management
Quality challenges are always top of mind for manufacturers. Throughout the pandemic, however, many food and beverage companies also had to consider how alternate suppliers, products and ingredients fit into their standards for production. Early in the pandemic, for example, Robin Hood was experiencing so much demand for its flour in Western parts of Canada, that it had to change its iconic yellow packaging to nondescript white bags. While this may seem like a relatively easy, short-term fix for the company, the switch could have major consequences on production if the size, weight or strength of the new packaging was different than what production was originally configured for.
Manufacturers like Robin Hood who had to turn to alternate suppliers as a reactive measure likely faced increased costs, a lack of consistency in quality and piles of paperwork to continue getting its products out the door.
3. Labor Safety Concerns and Shortages
While food manufacturing and processing facilities were deemed essential throughout the pandemic, manufacturers have still been required to follow strict health and safety measures to keep employees safe. This includes social distancing on production lines, reworking shift and break schedules to minimize crowding and increasing sanitation frequency. As a result, manufacturers have had difficulties keeping up with production and ensuring that they’re operating at full capacity.
On top of this, labor shortages throughout the industry (and beyond) have resulted in employment gaps as manufacturers look for qualified workers for entry level positions on the production line all the way up to management or highly technical positions.
Overcoming Supply Chain Challenges with Modern Software
To help our customers address challenges in the supply chain, we’re excited to introduce FoodBusiness ERP 2021 R2, the newest version of our industry-specific software. In this release, we’ve added additional functionality to address current industry shifts and regulatory requirements because we understand that food and beverage manufacturing is constantly evolving.
Here’s a look at some of the enhanced features found in our newest release:
1. Supplier Document Management
To better control the relationship between manufacturer and supplier, we’ve created functionality to help streamline the vendor and supplier management process. Triggers in the system notify users when updated supplier paperwork is needed, so manufacturers can ensure documentation is never out of date or incomplete when an auditor shows up.
For multiple suppliers, features in the system make sure product being received is consistent between suppliers so it can be used interchangeably without affecting production. Dashboards of supplier documents provide users with at-a-glance views of spec sheet data, supplier certifications and contractual obligations, which can be easily accessed in real-time.
2. Quality Audit Management
Ensuring quality throughout the manufacturing process is a tough task. That’s because there’s so many moving parts, products and vendors to manage. Enhanced quality management functionality in FoodBusiness ERP 2021 R2 includes features that automate and simplify the quality management and auditing process, including:
- Event-Based Audits that are triggered by a specific happening, such as the creation of a new supplier, to automatically generate required documentation within the system. This helps ensure that critical information, such as a new supplier audit, is never missed.
- Secondary Audits that can be created in the system if an issue arises during the auditing process. For example, an unclear test result upon receipt of a raw material can prompt a secondary audit to ensure that quality standards are met.
- Assigning Shifts to Audits so managers can assign and prioritize auditing tasks for shift-based technicians to better manage their time and ensure tasks aren’t missed or delayed.
3. Scheduling and Planning
The most successful manufacturers are flexible in their operations and able to adapt quickly to last-minute changes. FoodBusiness ERP 2021 R2 comes equipped with advanced production sequencing functionality that allows users to simplify scheduling and minimize production line setup to streamline overall production management. This control and production efficiency allows manufacturers to address labor shortages by grouping workers together as required, shifting technicians around based on different skill sets and adjusting operations on the fly.
The key to overcoming supply chain challenges is having control, insight and visibility into operations. That way, when unexpected events occur – such as labor shortages or large swings in demand – they’re easier to address and account for. With a plan in place to effectively manage suppliers, ensure quality and group production to increase efficiency, manufactures are better able to address whatever comes their way.
FoodBusiness ERP 2021 R2 is modern Enterprise Resource Planning (ERP) software built for the food manufacturing and processing industry. It comes with all the functionality required to keep up with evolving industry standards and supply chain challenges. Built in Sage X3, FoodBusiness ERP was developed from years of industry experience incorporating best practices from food and beverage manufacturers and industry leaders across North America. It is a single system that runs your entire business through manufacturing, tracking, inventory, sales, finance and quality.