The Benefits of Inventory Control Systems in Food & Beverage Manufacturing 

Inventory control in food production is a process that allows a business to manage and monitor stock levels of food products. This can be done through a range of methods including FIFO (first-in, first-out), demand forecasting, and inventory management software. By having an inventory control process in place, businesses can ensure that stock levels are optimal, matching supply and demand, while minimising cost and waste.  

Businesses can keep an eye on stock levels for all food products from manufacturing, such as raw ingredients, to the finished products.  

There are a few different methods a business can use to ensure that the freshest products leave the warehouse. This can be done by making sure that the first stock into the warehouse is the first to leave or by only manufacturing products that are required, based on customer demand. These methods are used to reduce costs, waste and optimise inventory stock.  

First In, First Out (FIFO) & First Expired, First Out (FEFO) 

First in, first out (FIFO) is an inventory control method that ensures that products  arriving at the warehouse first, are the first to leave the warehouse. In the same way, first expired, first out (FEFO) ensures that products with a closer expiration date leave the warehouse first. These two methods help to reduce the risk of having a warehouse full of unsellable stock, such as products that are past their expiry date.  

FIFO or FEFO is also being used in supermarkets. According to Chowhound, shoppers should pick their perishable items from the back of the shelves. This is because products that will expire first are in easier reach.  

Just-In-Time (JIT) 

Just-in-time (JIT) is an inventory management method that ensures  you receive  raw ingredients only when you need them, allowing you to only manufacture products to match customer demand. This is done through:  

• Accurate forecasting - Accurately predicting customer demand based on historical sales data 
• Building strong relationships with suppliers – Finding reliable suppliers who can deliver the exact quantities of ingredients, exactly when they are required.  
• Streamline the production line – Ensuring that your businesses production is carefully planned out and is synchronised with the delivery of ingredients.   

By only manufacturing the number of products  required, businesses can reduce product waste and storage costs while increasing efficiency and product quality.

Inventory Management Software 

Real-time inventory management software (IMS) simplifies the way businesses manage their inventory by giving them the tools to streamline inventory practices, including optimising inventory levels to match customer demand, allowing businesses to make decisions that are backed by data.  

From barcode scanning to integrating eCommerce platforms, such as Shopify or WooCommerce, an inventory management system allows you to take control of how you manage your inventory by giving you visibility to all aspects of the warehouse,  allowing you to have full control of how your business manufactures and stores products.  

An inventory management system allows you to manage sales through a range of channels such as online, in-store or over the phone.  It will populate important information, including products, quantities, delivery address and payment information, followed by allocating stock to orders, ensuring that you have enough stock and update the inventory count once allocated.  An IMS will also update with real-time updates, such as ‘picked’, ‘packed’, ‘shipped’ and ‘delivered’.  

An inventory control system can improve customer satisfaction, optimise stock levels, reduce holding costs and much more by giving businesses a tool that allows them to see everything in their inventory.  

Optimise Purchasing and Stock Levels  

An inventory control system can optimise purchase and stock levels. This is done by analysing data, tracking stock in real-time, and demand forecasting, ensuring that a business has the stock levels to match customer demand based of real-time data. These data insights reduce the possibility of stockouts or overstocking, waste, and unnecessary costs.  

Reduce Stock and Holding Costs  

Holding costs are the expenses involved in storing unsold stock. As mentioned above, an inventory control system can reduce the amount of unsold stock because of the ability to analyse data and predict demand, allowing businesses to match their inventory levels to meet customer demand,automatically reducing holding costs.  

Methods, such as JIT inventory, can also be put into place to support reducing stock and holding costs. 

Improve Customer Satisfaction 

Using an inventory control system to optimise inventory levels and ensure products are always in stock will improve customer satisfaction. This boosts a business’s reliability, leading to returning and loyal customers. 

Automation, including  order capture and validation or inventory updates, in an inventory control system can help process orders in a timely manner by updating stock numbers or validating customers’ orders, eliminating manual data entry. When orders are processed, shipped and delivered in a good time frame, such as two business days.  This will  lead to a positive customer experience, resulting in the likelihood of customers returning.  

Improve Efficiency 

An inventory control system can improve efficiency by streamlining processes - such as inventory tracking, demand forecasting and picking strategies. Improving these processes can reduce the possibility of overstocking or stockout, increasing customer satisfaction, profitability and better order fulfilment.  

An inventory control system in food and beverage manufacturing is a system that allows you to track and manage different aspects of your supply chain. These include stock levels, orders, and sales history on all products as well as tracking expiry dates and predicting future sales.  

There are many benefits to having an inventory control system in food and beverage manufacturing. From enhancing product quality to better traceability, an inventory control system can help a business  increase productivity, efficiency and profitability.

Enhances Product Quality 

An inventory control system  ensures that ingredients are being used at the freshest point by tracking expiry dates. This guarantees that the products are at their highest quality, giving them a longer expiry date and can mitigate customers receiving products that aren’t as fresh as they should be.  

Waste and Cost Reduction 

Because an inventory control system can track expiry dates, this helps businesses to send out products or use ingredients that came in first, though the first expired, first out (FEFO) stock management method. By doing this,  a business isn’t left with unsellable stock leading to a reduction in cost and waste.  

Increase in Productivity  

An inventory control system  increases productivity by  streamlining operations, reducing errors and optimising the allocations of resources. This is because an inventory control system can automate tasks, provides real-time data reports and visibility and helps to improve order fulfilment, giving your staff the time  to focus on more pressing or manual tasks, such as product manufacturing or reporting. 

Decisions Made Using Data 

An inventory control system can provide real-time reports and visibility. You can gain useful insights into sales pattens, demand forecasting and historical trends, enabling you to make decisions that are backed by data and without guesswork. 

Increase in Profits 

Inventory control systems help optimise stock levels, reduce waste, and improve operational efficiency, which can directly contribute to increased profits. By avoiding stockouts and overstocking, businesses can reduce unnecessary spending, improve order accuracy, and streamline production schedules. These improvements lead to better resource management and lower overheads, which in turn support stronger profit margins. 

Improve Customer Satisfaction 

An inventory control system allows you to keep in line with supply and demand, ensuring you have the right number of products in stock, exactly when you need them.  By meeting customer needs, such as having the right quantity of products in stock when customers need them, businesses can improve customer satisfaction and loyalty.  

Improve Demand Forecasting  

Demand forecasting analyses sales data and inventory trends to give insights and predictions to help optimise your businesses stock levels. Demand forecasting can be improved by using an inventory control system through real-time data and insights, stopping guesswork. This allows you to prepare for peak selling seasons and avoid product sellouts or overstocking.  

Better Traceability 

Traceability can be improved through unique identifiers, such as barcodes and serial numbers, and real-time tracking. An inventory control system can track specific products through their lifecycle. You can easily find where products are in the warehouse, and how much you have of it, making it easier to decide what you need to do with it.  

Traceability doesn’t just stop at where your stock is in your warehouse, it can go further. Businesses can track where their stock goes after it has left the warehouse, allowing for full visibility. For example, if a specific batch gets recalled, businesses can see exactly where it is and get it off the shop floor or notify customers.  

Better Pricing 

An inventory control system allows businesses to optimise their costs based on sales data. Through real-time data and demand forecasting, businesses can find the products that aren’t selling or not selling as quickly as others. Using this data allows pricing to be adapted to help boost sales while also reducing waste. For example, if a product isn’t selling, prices can be reduced to clear out stock to avoid waste.  

Staying in Line with Compliance  

Compliance guidelines, such as accurate labelling, documentation of ingredients and hygiene protocols are enforced in the UK by the Food Standards Agency (FSA). In the United States, hygiene protocols are enforced by the Food and Drug Administration (FDA). These regulatory bodies ensure that a business is manufacturing products that are safe for consumption and all components are traceable. An inventory control system can keep track of batch numbers and serial numbers and produce real-time reports  to make meeting compliance requirements easier and give businesses the confidence that their products are of the highest and safest quality. 

Modern inventory management systems like Unleashed’s real-time inventory management software offer capabilities such as total traceability, in-depth real-time reporting and global flexibility, allowing you to have full control of every aspect of your stock. 

See all stock movements as soon as they happen, including stock coming in and out of the warehouse, where it is and if stock is being used in production. You’ll constantly be up to date with stock levels, locations and batches, making managing your inventory a breeze. 

Ready to reduce waste, improve compliance, and boost profitability with better inventory control? Experience these benefits firsthand with a 14-day free trial today.