WHITE PAPER 5 TIPS FOR MANAGING FOOD AND BEVERAGE SUPPLY CHAIN

WHITE PAPER 5 TIPS FOR MANAGING FOOD AND BEVERAGE SUPPLY CHAIN

CONTENT AUTOMATE, AUTOMATE, AUTOMATE... 1 PLAN FOR FUTURE DEMAND... 2 MAINTAIN DETAILED REGULATORY COMPLIANCE DATA... 3 CONTROL COSTS BY MINIMIZING WASTE... 3 LINK MULTIPLE LOCATIONS... 4 SUMMARY AND SUGGESTIONS... 5

5 TIPS FOR MANAGING FOOD AND BEVERAGE SUPPLY CHAIN The high-volume, transaction-intensive nature of food and beverage supply chain logistics presents significant challenges. When raw materials, ingredients and manufactured products have a limited shelf life, processes such as order intake, allocation, picking, packing, and shipping become increasingly difficult to manage and predict. Managing the many moving parts of the supply chain process is difficult, but vital to the success of manufacturing operations. Changes in market demand, vendor offerings, material process and regulations, among many other reasons, may lead to the need to adjust your supply chain processes. If your operation is so rigid that an adjustment to the supply chain causes issues, the situation may prove costly. How can your organization s supply chain remain agile and efficient? Carefully managing the flow of materials and finished products into and out of your manufacturing center is vital to effective operations, but is also useful in pinpointing areas of improvement, as well as potential deterrents to agility. In this white paper, we will examine five tips that could help your organization streamline supply chain, maintain compliance with food safety guidelines and improve productivity, all while cutting costs. AUTOMATE, AUTOMATE, AUTOMATE It is very likely that your supply chain involves many steps and processes, most of which continually repeat as operations progress. These repetitive processes present the perfect opportunity for automation. Seizing automation opportunities can provide instant and long-term benefits; the more steps and procedures you can automate within your supply chain, the less time employees will have to spend ensuring that processes are completed as planned. Unfortunately, automating your supply chain isn t always as easy as it sounds. The process involves a number of steps, and potential expenditures. When automating your food and beverage supply chain, it is important to: Explore available technology: From handheld bar code scanners to tablets, manufacturing supply chain technology is always improving. Utilizing the best technology possible will help to streamline your operations by limiting human error and improving information gathering. 1

Centralize information: In food and beverage supply chain operations, information is invaluable. Collecting data relating to shelf life, inventory counts and future demand in one centralized location will help to maintain the flow of materials and products throughout your manufacturing center. A comprehensive enterprise resource planning (ERP) software, such as IFS Applications, is a sound strategy to automate your information gathering and centralization efforts. Create detailed processes: Outlining the many processes involved in your supply chain in great detail is important to efficient operations. The more detailed your processes are, and the more consistent they become, the easier it is to automate them. IFS Applications offers the power and functionality you need to integrate a range of technology, information-gathering software and process management software into a single solution, thereby improving your supply chain s efficiency. PLAN FOR FUTURE DEMAND Taking a proactive approach to address the future of your food and beverage supply chain will result in a reduction of surprises, shortages and unnecessary spending. Carefully considering and planning for both the near future and the long term is the only way to keep pace with the competition. When planning for future demand, it is important to consider many variables, including: Market fluctuations: As market demands change, your supply chain will need to evolve. Predicting market fluctuations isn t always easy, however. Fortunately, the more information you have, and the more attention you pay to the changing market, the more agile your supply chain will be. Most companies shape demand by promotions and campaigns. It is often a challenge to align the supply planning with these activities. It is very important to make sure the manufacturing plans are aligned with the marketing activities. Changes in customer base: As your target market changes, your approach to producing products must evolve. Tracking trends in data related to demand, sales and other key areas will help you to maintain the ability to continually serve your target market. Material costs and availability: The short shelf life of food and beverage materials means that companies must purchase when necessary. This makes it important to carefully manage margins and maintain cost visibility. An ERP system will improve cost visibility and support decision making. 2

Much like in the automation process, an ERP solution is vital to predicting the future of your food and beverage supply chain. IFS Applications integrated planning tools offer full support for demand planning, as well as production and procurement planning. The solution allows you to review trends and historical data, making it possible to conduct strategic forecasting to streamline ordering, inventory and production. MAINTAIN DETAILED REGULATORY COMPLIANCE DATA Few industries face the same level of scrutiny as food and beverage. With a wide array of state, federal and global food safety guidelines to adhere to, maintaining compliance is a difficult task. Demonstrating that compliance in the event of an audit is just as challenging. To maintain compliance with food and safety guidelines, it is important to: Gather precise data: It is important to be thorough and precise when addressing regulatory compliance issues. When facing an audit or attempting to gain a certification, the amount of information you can provide will directly impact the outcome of the process. Track everything: Organizations that make the effort to carefully track the flow of materials into and out of their operation centers are better equipped to address regulatory issues. Keep detailed records of materials, processes, maintenance, and cleaning efforts. The more you track, the better prepared your organization is to address compliance audits and certifications. Maintain historical records: Predicting compliance audits is all but impossible, making it important to keep detailed historical records. By keeping these records, your organization can quickly respond to regulatory reviews, and can pinpoint trends that may lead to future regulatory issues. ERP solutions often provide the power food and beverage manufacturers need to track and monitor regulatory compliance. IFS Applications offers the tracking and reporting functions needed to ensure compliance with each and every regulation governing your organization. CONTROL COSTS BY MINIMIZING WASTE Many costs associated with the supply chain are difficult or impossible to control, including fuel rates, labor and materials costs. With that in mind, it is important to explore other areas where costs can be controlled. One cost that your organization can directly control relates to material waste. By 3

controlling the amount of raw materials and finished products lost to waste, your business will reduce production costs and improve overall profit margins. How can you control waste costs in your supply chain? There are many strategies for doing so, including: Managing expiration dates: The vast majority of materials involved in the production of food and beverage products have a limited shelf life. Maintaining real-time awareness of the shelf life of materials in your supply chain and ensuring that materials are used properly within that time frame will dramatically reduce waste and the costs associated with it. Avoiding overstocking: An overstocked inventory is a hotbed for wasted materials. If your organization cannot utilize an overstocked material within its shelf life, that material is lost to waste. Maintaining adequate inventory without overstocking materials by accurately forecasting demand and maintaining lean manufacturing helps to eliminate waste. Addressing quality issues: Final products that do not meet quality standards or food safety guidelines must be disposed of. Pinpointing and managing quality control issues quickly and accurately will help to eliminate waste stemming from subpar final products. Sequence production: Maintaining optimal production sequences helps to eliminate waste. By tracking production levels and sequences, organizations can alter processes to improve efficiency and reduce waste. Utilizing an ERP solution to aid in your waste reduction efforts will increase the likelihood of success. IFS Applications offers comprehensive materials tracking capabilities, allowing you to remain ever-aware of spoilage dates, inventory levels and trends in quality control issues. LINK MULTIPLE LOCATIONS If your food and beverage manufacturing operation spans more than one location, it is important to ensure that your supply chain flows logically through each site. Linking multiple locations together using ERP software will aid in your efforts to maintain consistent inventory, shipping and production. Without this link, the strength of your supply chain is likely to deteriorate, with each location left to handle the challenges of operation without support from the others. An ERP solution is invaluable when attempting to streamline supply chain between multiple sites. By connecting the data from each location, your supply chain becomes more manageable. IFS Applications supports traceability throughout multiple locations, making it easier to manage every aspect of your organization s supply chain. 4

SUMMARY AND SUGGESTIONS Managing the many pieces involved in a complex food and beverage supply chain requires a great deal of effort. Fortunately, the more real-time information you have on your supply chain, the easier it becomes to manage. Comprehensive ERP solutions provide the data you need to automate supply chain processes, plan for future demand, manage compliance, control waste, and integrate multiple locations. If your organization does not currently employ an ERP solution, or struggles to manage supply chain with your current software, consider making a change. IFS Applications offers the wide range of functionality you need to streamline supply chain management and reduce overall operating costs. 5

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