Effective inventory management is crucial to reducing costs in any manufacturing business. This is particularly true in the food manufacturing industry, which characteristically has a high volume of products stored, the need to fill existing client orders and to match ongoing consumer demand with product availability. Cost reductions in food manufacturing can be achieved using inventory software to improve ordering processes and minimise overstocking of expensive raw ingredients. Software will also improve operational processes, boost warehouse efficiency and reduce waste.
Further, inventory software provides a means to track inventory, in real time, through every step of the supply chain. This allows food manufacturers the ability to maintain control of their products while ensuring adherence to food safety standards and legislation.
The capability to track both origin and the supply channel of individual ingredients can also facilitate rapid response should some misfortune necessitate a food product recall.
Fresh and fast moving
High levels of fresh or fast moving consumer goods are common in the food manufacturing industry and inventory levels of raw material, in-progress and finished goods needs to be effectively managed to reduce the holding costs of this inventory.
When working with fresh produce and raw ingredients food manufacturers run a high risk of spoilage and waste. Even pre-cooked, processed and vacuum-packed products are perishable items with a limited shelf life. All of these items present various operational, planning and inventory management challenges.
Implementing new technology will enable food manufacturers to monitor and manage inventory and subsequently cut down on product waste. Improved efficiencies can also be realised through cohesive supply chain cooperation, online collaboration and the ease of real time data transfer between partners.
Operational manufacturing costs
Food manufacturing generally takes on multiple processes and operations. Employing inventory management software will help the operations team measure spillage and waste against input materials and identify areas for process improvement and efficiency.
Digitising processes provides transparency of these operational processes and will deliver reliable data to allow manufacturers to make more effective business decisions to maximise productivity and drive operational excellence.
Understanding operational expenditure also allows manufacturers to manage their associated warehousing and insurance costs of holding finished goods.
Inventory management software provides a means to reliably measure the operational expenses associated with the cleaning and maintenance of machinery and equipment as well as the clothes and tools required by employees to perform tasks. Providing a platform to determine the true costs of food manufacturing from input of raw ingredients through to operational processes, packaging and distribution.
Managing product recalls
Inventory management software is designed to improve visibility through the entire supply chain. With forward and backward traceability, inventory software aids efficient recall implementation, identifying affected batches for product recall easily.
Without this valuable data, manufacturers may undergo the unnecessary expense of recalling 100 percent of a product in instances where only ten percent of the goods were actually affected.
Food for thought
Inventory is a financial component of manufacturing. Numerous costs are associated with the product, process and operation of inventory. Software tools to manage inventory help reduce these costs and lower operation overheads through increased efficiency.
Inventory management software is flexible and products will adapt to meet the changing needs of food manufacturers. Surely that is worthy investment in your business.