The food industry is one of the most challenging for manufacturers when it comes to optimizing their inventory control. The sheer complexity of having to manage such a variety of perishable components and ensure that customer service targets are consistently met means that powerful inventory control software is essential. Many large food and beverage organizations rely on incredibly sophisticated, resource sapping and expensive ERP (Enterprise Resource Planning) systems to meet their requirements. However, small to mid-sized food manufacturers are under no obligation to make the same sizeable investment of working capital and resources in setting up an integrated inventory control software solution for their business.
The right inventory management system is key to fostering greater efficiency, productivity and profitability for businesses. Food manufacturers in particular can limit or eradicate unnecessary losses as a result of inventory mismanagement. It can also promote faster, more efficient growth that is geared to helping the business scale.
One of the most significant advantages of implementing a cloud based SaaS (Software as a Service) inventory management solution is the highly customizable nature of the software. The ability to refine and modify critical components of an inventory management system to better integrate and align with the business’s unique supply chain is advantageous in many ways.
With the right inventory management software at their disposal, procurement managers are better able to integrate their data with their suppliers. This ensures that lead times are kept to a minimum and the lines of communication are open, clear and free of misinterpretation. This leads to a marked decrease in under or over supply of inventory and when dealing with perishables can lead to significant savings as a result of less wastage or delays in production due to inventory being out of stock.
Traceability – The importance of visibility of the supply chain
When dealing with short shelf life produce, it is vital that inventory managers have the ability to track, trace and account for each item of inventory at any time. Visibility into the supply chain is exactly what an effective inventory management software solution is tasked to achieve.
Total visibility into the movement of each item of inventory through the supply chain creates a ripple effect which generates greater efficiency and efficacy along every node – from demand forecasting, through purchasing, manufacturing, distribution and sales.
Being able to locate each item of inventory in real-time leads to a significant reduction in loss as a result of mismanaged, misplaced and mishandled inventory.
Inventory can be kept at optimal levels thereby insulating the business against the risk of overstock and under stock issues. These issues include: obsolescence, tied-up cash flow, missed sales due to stock-outs and off-target forecasting and purchasing.
Automation = efficiency = boosted profitability
A smart inventory management solution is able to leverage the power of automation to further enhance the efficiency of procurement, production, distribution and sales. Without the capability to track, trace and account for inventory from source to sale, process managers have no dependable and accurate way to enforce FIFO (First In First Out) inventory protocol.
Food manufacturers, in particular, need to ensure that loss as a result of wastage is either eliminated altogether or kept within the lowest manageable margin. The way to do this is to set up the flow of inventory from purchasing, storage, production and distribution in such a way that goods most susceptible to wastage are used up first.
This is where the customizable nature of inventory software becomes a major plus to the business. The task of automating which items are used up first is easily achieved, as is the ability to set up automated re-order points that alert purchasing managers when inventory is approaching above or below optimal levels.
A final advantage for food manufacturers is being able to mitigate against the likelihood of a product recall, and in the event that a recall does become necessary, the ability to execute the recall as effectively and efficiently as possible.
Total visibility into the supply chain means that the team tasked with carrying out the product recall can quickly and easily identify which product is in need of recall, where it is in the supply chain, and to whom the products have been sold to.
The ramifications of a poorly managed product recall can be devastating to a food manufacturer. The ability to track, trace and account for inventory in real-time affords businesses the advantage of containing the threat quickly and planning and acting strategically.
Scale and evolve for growth
Greater operational efficiency and productivity inevitably leads to business growth and success. It seems almost counter intuitive, but success can cripple a business that is unprepared.
One of the greatest challenges new and emerging successful businesses face is the ability to scale effectively. Fixed or static inventory management systems can dramatically impede a business’ ability to transition to the next level of profitably.
Forward thinking businesses understand this and know that one of the most vital components of their inventory management software must be the ability to adapt and evolve ahead of the needs and requirements of the business as it scales.
No margin for error using inventory control software
SaaS inventory control software solutions are tailored to ensure that updates and improved functionality for the individual requirements of their customers are carried out without disruption to the manufacturer. In an industry where every second counts and every item of inventory has a use by and sell by date, the margin for error when implementing a powerful inventory control software solution is simply non-existent.