Leverage Technologies has successfully been helping food and beverage customers across Australia run their businesses better.
Background: The food and beverage industry in Australia is growing at a rapid rate as we continue to build food processing plants, distribution facilities and retail outlets to feed a growing local and global population. The food industry faces several challenges associated with supply chain management across retail, distribution and processing, regulatory requirements and price pressure.
As the industry grows there is increasing demand on the food and beverage industry players to deliver in several different areas:
- On time in full delivery
- EDI integration to major retails (for example Coles, Woolworths, David Jones)
- Management of HACCP
- Allergen management
- Weigh scale integration
- Manufacturing management
- Expiry dates and lot traceability
- Inventory management
- Supply chain
These multiple touch points can provide opportunity or pain for any food and beverage supplier – in food processing and / or food and beverage distribution. By addressing these challenges a food and beverage processing or distribution company can get ahead of the competition by:
- Covering the required legal / regulatory requirements (for example HACCP)
- Providing better customer service (through on time in full delivery)
- Freeing up cash flow (by holding the correct inventory levels and improving the quote to cash cycle)
- Keeping staff members happier by providing them with the tools to do their job better, easier and quicker (with an easy to use interface, mobility and workflow).
Industry addressed with SAP Business One for Food and Beverage: Food and beverage processing, food and beverage distribution.
Food and Beverage Industry Pain Points: any business considering an ERP solution will usually have a reason, or number of reasons for going to market for ERP. These “reasons for going to market” are considered “pain points”. Let’s explore these pain points in more detail as they relate to the food and beverage industry. Let’s also discuss how ERP solutions for food and beverage can address these challenges:
Whilst we will focus on the operational aspects of ERP for the food and beverage industry it is worth noting that you should implement a complete business management (ERP) solution. This means that your ERP solution should offer all the functionality that a food and beverage customer might require:
- Financials – including financial and tax reporting
- Purchasing and purchase planning
- Supplier and raw materials management
- CRM (Customer Relationship Management)
- Inventory control and warehouse management
- Manufacturing (including manufacturing planning / scheduling)
- Mobility (get the information that you want, when you want it)
- Reporting, analytics, business intelligence and dashboards
- Food industry specific requirements
- Proof of delivery
Typical food and beverage pain points that need to be addressed:
HACCP requirements. HACCP Australia looks to provide world’s best standards and practice for the food and beverage industry. HACCP helps identify and manage risk in food safety through programs, education and solutions. A Food and Beverage processing or distribution company in Australia will be required to be HACCP certified. This is where there is a major requirement from the ERP solution provider to give assistance with reporting and solutions to manage HACCP requirements. These requirements will include:
o Expiry dates
o Recall protocols
o Ensuring compliance
EDI (Electronic Data Interchange). If you are trading with the major retailers in Australia, you will require EDI integration. This EDI integration will be used to automate the selling and fulfillment process. EDI will include document flows to and from your ERP solution (PO’s, ASNs etc.). An integrated EDI solution will provide a seamless workflow between the retailer and your business.
Traceability – we touched on this requirement when we mentioned HACCP (above). The requirement for traceability in the food and beverage industry usually relies full batch / lot traceability. This includes traceability of raw materials and finished product.
Product recall – as part of your HACCP accreditation you will be required to show that, in the unlikely event of a product recall your ERP solution can provide backwards and forwards traceability. This will be required to show not only which products are directly involved in a product recall but what other items might be effected. For example, what raw materials might have caused the issue and where else where these raw materials used?
Weighing scale – food products are somewhat unique in that they can be sold in packs and by weight. This can cause a major headache for ERP providers. Weighing scale integration becomes important for managing and checking raw material quantities used in recipes and finished goods about to be shipped. Weighing scale integration to ERP provides another check point to ensure accuracy.
POD (Proof of Delivery) – if you are processing or distributing food and beverage products you will without doubt be delivering the end product to customers. Very often these customers are broken into two broad categories – large retail (requires EDI) and smaller cafes, restaurants and specialist stores (require electronic POD). The pain point here is that multiple pieces of paper floating about in a truck or an old book with signatures scribbled on the paper based POD is not what you are looking for. Go with an electronic POD integrated to your ERP solution for fast, efficient proof of delivery.
Allergens – compliance is key in Australia and requires the declaration of certain substances and products on package labelling.
PLM (Product Lifecycle Management) – another aspect of regulation requires product lifecycle management in the food industry to monitor changes in a bill of materials or recipe. Think of the challenges associated with labelling all ingredients, allergens and composition of products.
Random weight / catch weight – the actual weight of the finished item is variable. An item might be sold as a carton and a carton could weigh anything from 2KGs to 2.1KGS – producing a variable weight per carton sold.
Sequence dependent changeover – another food industry requirement for processing / manufacturing whereby you need to process manufacturing in a particular order to minimise clean and set-up times on each manufacturing workstation. For example, if you manufacture yogurt you might need to process your planning in a particular order – vanilla before strawberry to avoid additional cleaning and machine set-up times.
Quality control – at the heart of every stock movement in the food and beverage industry is the requirement for quality management. This includes checking batches of raw materials as they arrive into the warehouse and completing sample checking of finished goods before they are shipped.
Leverage Technologies solutions for the food and beverage industry:
• SAP Business One
• Sage X3
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