The holidays can be an exciting time for food manufacturers, promising a dramatic increase in sales. For example, Easter will see a surge in demand for certain confectionery foods like Easter eggs, hot cross buns and Easter bunnies. While this can be great for boosting sales, holidays seasons also have some negative consequences for food manufacturers. This article examines how the holiday season can influence food manufacturing businesses’ inventory control processes and their capacity to be productive in general.
Seasonal Demand for Food Manufacturers
Particular times of the year can have a huge influence on demand for particular food products. For example, during the Christmas period, manufacturers can expect to see an increased demand for food items such as turkey and pudding. Likewise, during Halloween manufacturers can expect an increased demand for foods such as pumpkin and confectioneries.
This increase in demand can boost sales and therefore increase profits for food manufacturers selling such items. Holiday seasons therefore require that food manufacturers order enough stock to meet this demand, to keep customers happy and make the most of this period during the year.
The Plus Side
The positives of this for food manufacturers is that it can give them some idea of when to start manufacturing particular products to be ready for the increase in demand. It may also help them to ascertain inventory manufacturing needs, in terms of the amount of each product that might be required to meet demand.
This means that food manufacturers can properly prepare for the wax and wane of demand for particular products, possibly making their operations more efficient.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. When not writing about inventory management, you can find her eating her way through Auckland.
Although the holidays can therefore be a promising time for food manufacturers looking to boost sales, they can also be a great challenge. For one thing, although manufacturers can make a generalised prediction about expected sales trends, it will be very difficult to ascertain when this demand will begin to wane, and it will also be difficult to ascertain the extent of the increase in demand.
For inventory control processes, this can pose a real challenge. Food manufacturers will need to order enough stock to meet the increase in demand, but must also avoid over-ordering, which puts them at risk of having obsolete stock once demand drops.
If food manufacturers order too much stock and sales begin to drop prematurely, for example, the company has wasted money and resources which they must now find a way to offset. This can be a challenging thing to pull off and it can derail you inventory control processes.
Similarly, food manufacturers may be able to predict an increase in demand, but demand may end up being higher than expected, putting manufacturers at risk of being under-stocked. Customers will likely turn to competitors to fulfil their needs, and having an inadequate amount of stock can tarnish your reputation in general.
Both of these extremes can inhibit a food manufacturer’s’ ability to remain productive and profitable, by derailing the company’s inventory control processes in general. Excess stock, especially perishable items, are problematic because they inhibit profitably unless manufacturers find another way to sell them off. Likewise, a lack of stock restricts your capacity to make the most of the busy holiday season.Topics: food manufacturers, inventory management, seasonal demand, stock control