With the COVID-19 pandemic still wreaking havoc on the world’s supply chains, food and beverage companies need to be even more aware of their inventory management processes. Unprecedented challenges like ingredient shortages, logistical inefficiencies, dramatic shifts in consumer demand, stringent workplace safety requirements and processing gaps mean that companies who aren’t able to adjust their operations and maintain real-time visibility of their inventory will likely struggle to stay in business.
Fortunately, an industry-specific Enterprise Resource Planning (ERP) solution can help food and beverage companies improve their inventory management by providing insight into inventory levels, managing multi-site operations and monitoring expiry dates to better manage waste.
Below, we highlight some of the common inventory issues food and beverage companies face and how software like FoodBusiness ERP can help overcome these challenges.
Common Inventory Issues
Lack of Real-Time Visibility
Most small or growing food and beverage businesses can get by using spreadsheets or manual processes to monitor and account for inventory. But as companies expand, they need a more complex system for managing inventory.
To minimize loss and inventory spoilage, leading food and beverage companies rely on real-time access to their inventory data. This visibility allows decision makers to ensure ingredients are being used before they spoil and helps avoid over-ordering and stock-outs.
Software built for the food and beverage industry centralizes inventory data from across your entire business, giving you full view of inventory levels. This holistic approach to inventory management makes it possible to keep costs and discounts low, while keeping production running efficiently and customers happy.
Inability to Manage Multi-Site Operations
Adding more manufacturing facilities and warehouses is a critical part of growing your business. But without the proper systems in place to accurately account for inventory levels and movement, you risk stunting your business’ growth rather than encouraging it.
With multiple locations, you now need to maintain stock counts for multiple warehouses, which takes time and resources, especially if you’re moving material between sites. A lack of communication between locations is a common problem for businesses without an enterprise-wide software solution in place. And when multi-site manufacturing is involved, it’s even more integral to accurately manage material inventory to ensure the right ingredients are at the right facility at the right time.
Industry-specific software comes equipped with the multi-site inventory management functionality your business needs to be successful. A solution like FoodBusiness ERP, for example, has Material Requirements Planning (MRP) features built right in, which helps manage inventory and production at multiple locations at the same time. Visibility into inventory at each warehouse or facility gives you a clear idea of product volume, ensuring you don’t order too much or too little of a specific ingredient. With the right tools in place to account for overall inventory and product transfers, your staff saves valuable time trying to find items and focusing on production instead.
No Visibility into Inventory Valuation
The most successful food and beverage companies have strict inventory valuation processes in place to account for costs of goods sold and the cost of unsold inventory. This visibility allows manufacturers to accurately manage excess or shortages of inventory, both of which can affect production and the profitability of a business if not measured correctly.
An industry-specific ERP solution like FoodBusiness ERP allows for multiple costing options for valuing inventory. Since the price of inventory is always changing as it is sold and then restocked, it’s important that business owners analyze the different methods for inventory valuation and choose the one that suits their companies best.
With FoodBusiness ERP, business owners can use varying costing methods to value inventory, such as First-In, First-Out (FIFO) costing, average costing or standard costing. Choosing the right method can have a direct impact on a businesses’ profit margins, so it’s critical that companies have the tools in place to accurately value their inventory.
Accurate inventory management is critical for food and beverage manufacturers, especially during these times of uncertainty. FoodBusiness ERP is purpose-built for the food and beverage industry and includes features that some of the world’s most respected companies are using to run their businesses. To learn more about how to take control of inventory management in your manufacturing facility, check out our eBook on the topic. For more information on FoodBusiness ERP, reach out to us. We’d love to chat.