ERP software for the food industry comes in a range of shapes and sizes, but what should you look for when you’re thinking about using it for your business? What are its most important features – and how and why are they valuable?
Here we cover the 10 most important features to look for in your food manufacturing software so you can achieve product consistency, production efficiency, and regulatory compliance.
1. Inventory control
Food manufacturing involves handling perishable goods, and there’s always a risk that these ingredients will spoil before they can be used – which can be costly. This makes it important that you can accurately track where and for how long ingredients are stored in your warehouses.
This is where inventory control software comes into play. The features this software usually includes are:
- Real-time stock levels
- Stock storage locations
- Stock expiry dates, with automatic alerts when an expiry is coming up
- Automatic communications with suppliers when stock is running low
- Tracking of incoming shipments
Automated features are an important part of effective food inventory control, and the best software usually comes packed with these so stock can be managed without human intervention – and potentially human error.
Inventory management software gives you a clear top-down view – in real time – of all of your goods, both incoming and outgoing. This will help you find any money pits and fill them in, and often you’ll even discover ways to optimise your processes – like finding ingredients with low demand that you’re overstocking, leading to high rates of spoilage.
2. Supplier management
A feature related to inventory management is supplier management – sometimes called supply chain management.
This software feature is designed to track and monitor everything coming into your premises and who’s sending it.
The functions of supplier management software may include:
- Contact details, including the location of the supplier
- Supplier price, currency and discounts
- Transaction histories
- Incoming ingredients, including changes from the norm or known risks (e.g. allergens)
- Certifications, accreditations and insurance documentation
With these combined, you can track who you’re dealing with and how much it’s costing your business. It’s quick to find optimal pricing based on quantity – including quantity discounts – compare approved suppliers to find the best price, and keep a record of new ingredients entering your premises.
In an industry like food that is regulated and has a potentially complex supply chain, being able to store all of this information in one place and access it efficiently is a must.
3. Bill of materials
A bill of materials is a blueprint for a product – a sort of recipe for it – and arguably one of the most important aspects of any manufacturing business.
The bill of materials explains exactly which ingredients go into which end products and in what quantity – so they are essential for ordering accurate quantities of materials for production runs of any size. Using a high-quality bill of materials will ensure a consistent product and reduce waste – and of course, save costs.
From a software point of view, it’s important that any ERP system you invest in for your business contains a bill of materials feature. This should:
- Record every recipe in your business
- Record the specific ingredients and their quantities for each recipe
- Detail the packaging requirements of each end product
- Offer instructions on how each end product is to be produced
With this information on hand, your team will always be able to purchase the right goods at the right time for your end products.
Coupled with inventory management software, you’ll also be able to track in real time what stock you’ve got on hand and what you need. When both of these are then paired with forecasting, you’ll also be able to plan your stock levels ahead of time (which we’ll cover below).
4. Traceability software (batch and serial tracking)
Batch and serial tracking are both vital for a food manufacturer – they are keys to knowing the ‘where’ and ‘when’ of your ingredients.
Batch tracking, aka lot tracking, is a system manufacturers use to track their products along the distribution chain from production to consumption. Here ‘batch’ refers to a single group of goods produced with the same ingredients at the same time – and which have the same expiry date.
Batch tracking is important for:
- Monitoring expiry dates
- Quickly recalling batches
- Meeting compliance requirements for food safety
Serial tracking, meanwhile, takes this traceability to the level of the individual product. It lets you follow single products from the supply chain through your facilities out to the customer, with the journey updated each time the product’s barcode is scanned.
Serial tracking is vital for:
- Tracking products after they have been passed down the supply chain from your business
- Proving your compliance
- Speeding up returns of individual products and assessing if a recall is required
- Creating reports on products by warehouse, availability, product code and beyond
Batch and serial tracking are often both offered as part of an inventory management package, since they are vital to tracking inventory – and mandatory for some industries.
- Learn more: Batch Production Explained
5. Demand forecasting
Predicting peaks, troughs and seasonal changes will mean you can plan ahead and get the right stock when you need it – and that you reduce waste and improve your business’ efficiency.
This is where a demand forecasting feature becomes an important element of any food manufacturing software.
Put simply, demand forecasting is when data is used to predict demand for a particular product and in what quantity – in other words, to forecast what you’ll need to purchase to minimise waste caused by either stocking out of a product or overstocking it.
Anyone using a Just in Time (JIT) business model will need to employ demand forecasting, or else it’s a much riskier strategy.
Demand forecasting software generally utilises the following to make its predictions:
- Historical sales data
- Seasonal factors
- Manufacturer forecasts
- Other constraints or business rules, such as purchasing at certain levels to reduce freight expenses
Combining these elements allows demand forecasting software to determine when a peak or trough is likely so you can plan accordingly.
- Learn more: What You Need to Know About Demand Forecasting
6. B2B eCommerce
B2B eCommerce platforms are traditionally used to sell products from one business to another.
But they are also used by franchise businesses that have a central kitchen or distributor from which multiple franchisees order stock. The B2B store acts like a regular eCommerce storefront – but the customers are your franchisees.
Through a B2B portal, franchisees can usually:
- Order or reorder products
- View stock availability
- Check their order status
- Create lists of favourites for repeat purchases
As the central administrator, the franchisor can usually:
- Set universal or custom prices
- Create product categories and catalogues
- Set automatic freight charges
- Manage multiple warehouses
Case study: How Pinjarra Bakery uses eCommerce software to streamline its operations
Western Australia’s Pinjarra Bakery operates multiple stores across the state, and uses a B2B eCommerce store for its centralised distribution model.
When a franchisee needs more stock they jump on the Unleashed B2B Store and raise an order. That data then goes to the company’s central inventory management system. If more stock is required, a purchase order is sent to the relevant suppliers straight from the platform.
Pinjarra owner Daniel Pantaleo estimates the business is saving AUD$30–40K a year in time that was previously wasted on manual processes.
Many of the software features we’ve talked about so far either require or generate cost figures. As a food manufacturer you’re going to be generating a lot of these figures, especially if your ERP suite plugs into a shopfront like Shopify.
To save your back-office team from being bogged down by spreadsheets and tedious data entry, you’ll need to adopt accounting software designed to work for food and beverage industry businesses – and software that integrates with your inventory management system. This software automates much of your data collection, entry and organisation.
Good accounting software can:
- Create, send and receive invoices
- Provide a real-time view of business finances
- Automatically generate dashboards and reports
- Quickly reconcile sales orders with cash flow
- Connect with other aspects of your business – like inventory management and sales – to share data across platforms
Learn more: Xero + Unleashed
8. Quality control
With stringent rules and regulations guiding the food manufacturing industry, good quality control – and the software to achieve this – is essential.
Inventory control is also important to maintaining quality, since it allows manufacturers to identify areas where improvements can be made in the production process – from identifying problems in the supply chain to streamlining production processes.
Much like software for other aspects of the manufacturing process, QC software is about automating and aggregating. Basically, it’s designed to take a range of QC-related activities and store them in one accessible location, so your business can manage and monitor the process – and all its many moving parts.
Good QC software will offer a range of features that cover:
- Audits and audit requirements
- Compliance standards
- Document management
- Training controls
- Corrective or preventive actions and their plans
- Customer complaints
9. Compliance and food safety
Governance, risk & compliance (GRC) software is another key component in making it easier to comply with food safety standards.
When it comes to keeping food – and food-related workplaces – clean and healthy, there’s a lot to remember, from knowing the rules to training staff and filling in paperwork. And if this task is not managed properly, it can lead to huge penalties.
So what does GRC software usually include?
- Document and certifications management for storing and accessing key paperwork
- Risk analytics and data management, including reporting tools to gain visibility over risk
- Audit management for conducting internal audits
- Workflow guidelines for following GRC-related processes
- A central administration dashboard to track GRC activities
GRC software may also include individual apps that staff can use for their own tasks – for instance, signing in to their workplace, reporting problems, and monitoring food safety tasks like temperature checking.
10. Cloud and mobile optimisation
Last but not least, you’ll want to use software that’s portable, easy to use and update, capable of keeping your data safe and cost-effective.
For many businesses – especially SMEs – this means looking for a software solution that’s hosted in the cloud. What this means is that the software provider owns and operates the platform, licensing out its use to individual businesses – known as software as a service (SaaS).
How is it better to license SaaS tools rather than own them in-house?
SaaS software is generally cheaper to set up – because these run on a subscription model, software is a manageable operating expense, rather than requiring a heavy up-front investment.
But for the most part, using SaaS products is about convenience and safety.
Cloud-based tools are designed to be used anywhere at any time – even on a smartphone or tablet. This means you can check and monitor your business on the go – you could be halfway around the world negotiating with new business partners and still have access to the same systems as if you were physically in the office back at home.
Another consideration is digital security. SaaS companies generally employ the world’s best security measures to protect customer and business data – far beyond what a small manufacturer can manage in-house. This means your business is less at risk of either a cyber breach or other events that compromise your system.
- Learn more: Cloud-based software – the way to go!