The food and beverage industry is a competitive marketplace and businesses need to have an edge to maximise their revenue and minimise their costs. Food waste is estimated to cost the Australian economy $20 billion each year, with the commercial and industrial sector disposing of 2.2 million tonnes annually.
If you work in the food and beverage industry you know that one of your largest unavoidable costs is the product you sell. However, there are ways to minimise this cost by managing stock more efficiently through inventory management software.
Ordering and advanced inventory management
A manufacturer or supplier of food and beverage products first needs the raw materials to make their finished product. While there are reasons for holding inventory, if a manufacturer has too many raw materials, then they risk wasting the raw products as they pass their use by date.
Ordering which is supported by inventory management software allows businesses to track the raw materials they hold along with forecast future demand patterns for each raw ingredient based on previous trends such as seasonality. Cloud-based software can even alert you when you are running low on ingredients and show how much stock ordering is costing the business. Ensuring a business does not hold too much stock in raw materials reduces both the amount of capital tied up in stock not being used and also the amount of finished products wasted.
Just-in-time supply inventory management reducing waste
Inventory management software also benefits the customers. By predicting each customer’s demand for products, the business can ensure they have the products available through varying demand periods, leading to better inventory control for the supplier. This, in turn, raises the customer service levels while minimising costs by not overproducing stock.
Stocktaking to manage inventory levels
Food and Beverage manufacturers need to be aware of the stock they hold of both raw ingredients and finished products. If stock is not reviewed regularly and centrally compiled, then over stocking of finished products can occur. An overstock that cannot be moved may need to be sold at a lower price to customers or even dumped leading to food waste and loss of revenue. Food manufacturing software allows stock taking to regularly undertaken and compared against expected levels. Real time analytics are available through cloud based food manufacturing software showing the amount of stock held immediately.
Data management within inventory management
Within any business, a large amount of data is produced by various departments including manufacturing. Effectively using this data to increase business productivity may seem like a big task however inventory management software makes this complex task easier.
Understanding the data will allow food and beverage manufacturers to adjust their production methods and stock control for greater efficiency. It can also integrate with other software to allow businesses to have greater knowledge of different departments of the business. This may not seem related to waste yet understanding large amounts of data allows for effective production processes, warehousing space and supply chain, therefore leading to less wastage of products and resources.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.