Complexity creates chaos, and in the world of food manufacturing, chaos can be extremely costly. Lean manufacturing is driven by the principles of waste elimination and simplification of processes and procedures, therefore improving quality and speed of delivery. Within the food manufacturing industry these elements, if implemented successfully, significantly reduce operation and labor costs, eliminate or drastically reduce wastage and speed up the delivery of products to customers.
For food manufacturers, the JIT (Just In Time) approach to inventory management is not a new or revolutionary concept. By its nature, food manufacturing guarantees that a business hoping to be successful will have a firm grasp on key lean manufacturing processes and practices. The industry demands it, since food manufacturers deal with perishable products. Therefore, any food manufacturer must be acutely aware of the importance of eliminating WIP (work in progress) and surplus inventory levels.
Food manufacturers need to have an awareness of the dangers of inaccurate inventory levels, reducing work in progress and other macro elements of traditional lean manufacturing processes. What is often not identified and addressed within their operations however, are the subtler causes of wastage and loss in their supply chains. This is simply because, unlike in other industries, waste isn’t necessarily as easy to identify.
Skilled lean manufacturing in the food industry is geared toward identifying and addressing areas of loss in a number of key areas within the organization and manufacturing process. These include:
Product flaws or defects are one area in particular where quality control is essential. Flaws in manufactured produce can have a devastating effect on both the reputation and bottom line of the business. This is where operating a powerful inventory management software solution that integrates and aligns each node within the supply chain is essential. Food manufacturers, such as those operating outdated spreadsheet reliant systems, who do not have the ability to track, trace and account for each item of inventory moving through their supply chain are bound to suffer issues with defective produce as well as bloated inventories.
Producing more than necessary is a major cause of revenue and productivity loss for businesses and is an area of waste that lean manufacturing targets. Often, what drives over-production within a food manufacturing operation is inaccessibility to accurate, relevant data in real-time.
A manufacturer operating off outdated data will have a flawed appreciation of its inventory levels and demand. Holding on to surplus inventory in any business is costly as it holds working capital hostage, ramps up operating costs and leads to higher instances of damage, theft and obsolescence.
A food manufacturer operating without a capable inventory management software system stands to suffer significant losses, both in terms of reduced inefficiency and productivity as well as revenue losses and wastage.
Lean manufacturing also emphasizes the importance of reducing or eliminating wastage as a result of unnecessary or avoidable downtime. Losses due to waiting are of prime importance within the lean manufacturing model. These may be the result of delivery from a tardy supplier, factory floor inefficiencies, reliance on outdated machinery, or communication issues, among others.
Just In Time manufacturing strives to eliminate downtime altogether by integrating and aligning the key nodes in the supply chain to the degree that inventory is delivered and utilized as it is needed.
Small and medium-sized food manufacturers who were previously excluded from attaining the level of integration and sophistication of more established industry leaders are now able to harness the opportunity that today’s cloud based SaaS (Software as a Service) solutions afford.
Something as simple as incorrectly labeled storage bins within a warehouse can have a ripple effect that disrupts the entire supply chain. The same principle applies for an inefficiently laid out factory floor or distribution center where workers waste time tracking down inventory.
Inventory management software improves efficiency, whereby staff can see whether a required product is in stock, how many units are available and exactly where they can be located.
By using JIT as a manufacturing model, the business can expect to enjoy considerable returns on its investment. Customer service targets are met and exceeded, product quality is increased and efficiency and productivity are improved as the business grows.
Sluggish supply chains ramp up losses as a result of preventable inefficiencies and wastage. This is why even small businesses are turning toward powerful and highly customizable inventory management software solutions to drive their operations from traditional manufacturing operations to lean manufacturing models.
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.