In order for a food and beverage process manufacturer to find an enterprise resource planning (ERP) system, the software they choose must fit the functional requirements for that specific organization. This is true in the food and beverage field perhaps more than any other due to the highly complex nature of the industry. Fast Moving Consumer Goods (FMCG) is a term used to describe the products we use every day. The food and beverage industry falls directly in the FMCG. Because of this, there are certain key components that any food and beverage ERP system must have to be fully functional.
Suited for Process Manufacturing Food and Retail
Process manufacturing for the food and beverage industry involves a large number of various ingredients. It is also difficult to predict accurate yields, which differ from discrete manufacturing when it is much easier to determine the exact number of finished products. Also included in the mix are the many by-products and co-products, as well as the re-working of product that is common in food and beverage production.
When a food and beverage process manufacturer implements an ERP system designed for discrete manufacturing, they will find they have invested in a system that will not meet their needs and may in fact be more harmful to the success of their process than if they had never installed it. Highly complex businesses must have a system in place that will meet their unique needs and support their process.
Food and Beverage manufacturers often sell their products to a retail marketplace. This is typical of all FMCG industries. Retailers, of course, have very different buy-in and sell-out cycles between them. They will implement different sales and promotions at different times and there are a great number of promotional types. In order for an ERP system to support the web of distribution channels, it must have the ability to function properly in these areas.
Forecasting and demand planning is an area that many ERP systems are not adept at managing. Because forecasted values can be so varied, an ERP system must have the flexibility to handle the burden. It also must be able to apply and manage the pricing involved in the various promotional projects. Also important is the ability for a food and beverage ERP system to properly analyze the financial and sales effects. This must involve input from multiple departments including sales, marketing, and accounting.
There is perhaps no greater consideration than that of regulatory control. The need for lot traceability, raw material insulation, regulatory compliance, and environmental guidelines must be successful at the highest level. The system must be thorough, agile, and rapid in case product recalls occur. Furthermore, the regulations are constantly changing and becoming more exact. This is true organization wide from eliminating the chance of cross-contamination to packaging.
Ensuring that you use an ERP provider that specializes in solutions designed specifically for your industry, and working with the provider to make sure the system will meet the needs of your business can make the difference between a valuable investment and a waste of capital.
Kathryn McDowell is a finance writer and writes on a variety of topics that benefit manufacturing facilities. Food and beverage software offers reliability, value, and accountability to manufacturing operations of all sizes.