5 signs you need to optimize the supply chain in your food manufacturing business
The food & beverage industry is undergoing rapid change, with customer demand and new trends creating considerable challenges for manufacturers. As pressure continues to mount from consumers and distributors like grocery chains and supermarkets alike, this shift is especially evident in F&B companies’ supply chains and logistics operations. And any company that wants to survive, must keep up. Let’s find out what some of the main challenges that need to be addressed are.
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Being able to track products throughout every stage of the supply chain has become a must in the food & beverage industry. It is a step that needs to be taken to avoid a lack of transparency and unnecessary risk of weakened customers’ trust, or even legal issues. But most importantly, it’s a paramount step in the direction of safety and compliance with industry regulations like GMP, HAACP, etc. Any company that has difficulties tracking its products is opening itself to problems in the future.
As consumers become more conscious about the products they buy, the pressure on manufacturers to produce and distribute safe high-quality products has become higher than it has ever been. And there are plenty of factors that can compromise the safety of an F&B product – the way its ingredients have been stored, how it has been produced and whether there have been any delays in its transportation. The list goes on.
In case of a problem with any product, the manufacturer must go through a costly and complicated product recall that can cause substantial damage to the brand’s reputation. And if the manufacturer hasn’t properly followed protocol during the production phase, finding the batches across the distribution network can prove a nearly impossible task.
Inefficient communication between different parties
Most food & beverage manufacturers function in a multi-country (or at least a multi-location) setting. This leads to various parties being involved in the supply chain without necessarily being directly connected with each other. As a result, information can become fragmented and communication may suffer, leading to inefficiency or even mistakes. It’s incredibly important – especially how easy it is to achieve nowadays – for any F&B company to maintain a sufficient level of communication without it becoming convoluted.
The costs included in a food supply chain are by no means insignificant. Some of the major expenses are related to energy and fuel, manpower, logistics, investments in new technology, etc. With costs already being high, it’s especially important to keep track, understand and control them. Though some fluctuation here and there is nothing out of the ordinary, a lasting trend that raises your expenses for no apparent reason means that your company might not be managing them in the most efficient way possible.
Sloppy inventory management
Inefficient inventory management is a telltale sign of issues in the supply chain. There’s a fine balance that needs to be achieved when it comes to inventory – having too much may lead to spoiled products that go to waste and lost income. Having too little may mean that you can’t answer customer demand. And what does that lead to? Lost income. Efficient supply management provides real-time visibility into your inventory and leads to your company producing and storing exactly the right amount at exactly the right time.
Does any of the above sound familiar? Indeed, these are very common problems in the food & beverage manufacturing that are addressed by an industry-specific ERP solution like ours. To find out if Food & Beverage for Dynamics 365 is the right fit for you, contact us!