ERP software for food manufacturing companies is somewhat more complex than other industries, as it must address several key regulatory requirements that have become commonplace in the industry – these include those guided by the FDA and the CDC under strict and increasing regulations.
All food manufacturing companies must have processes in line with these regulations, which means the ERP systems put in place to support them must have high traceability capabilities to accommodate the regulations.
ERP Target Areas for Food Manufacturing Companies
Depending on the product line, food manufacturing companies can have various priorities in optimizing their business processes. For large volume producers, a primary area of focus includes the reduction of scrap waste.
However, for higher margin products, such as organic or health/allergen-sensitive products (like gluten-free or dairy-free goods), quality assurance is of the utmost importance, especially as it relates to the content of allergens via contamination. Additionally, food manufacturing companies are met with constant pressures that require an ongoing scrutiny of new efficiency improvements, ways to reduce inventory, and creative ways to reduce recurring costs.
The right food ERP software for food manufacturing companies can help fulfill these priorities, and is important for managing, scaling, and adhering to regulatory changes in the industry.
A Look at an Ultra Food Manufacturing Client
One of the food manufacturing companies currently on Ultra’s roster is a processing and packaging company that manufactures various pre-packaged and frozen shrimp, other seafood, and vegetable products. The company engaged Ultra in their ERP project because they needed help navigating their ERP system selection process.
Currently, the company is functioning with a PRMS system that is 25-years-old. The antiquated state of this system is just one of the reasons the company is looking to implement a new solution. Here are some other things a new ERP system could accomplish for this client:
- The expanded functionality of a modern ERP system will help manage the company’s growth, and allow them to stay one step ahead of industry regulations.
- Their selected solution will be able to scale as they continue to take market share from their competitors. This will help the company expand their business by managing more locations and growing beyond their current multi-plant channel.
- A new solution would have a positive impact on how the company manages their multi-plant operations, especially in respect to warehouse management.
- The current system requires heavy customization to accommodate even the smallest of regulatory changes. This often results in taking on more manual processes, as opposed to having access to available integrations within an up-to-date system.
How Number of Goods Produced Affects Manufacturing Processes
Of all of the food manufacturing companies we work with, this client stands out due to the vast number of products they manufacture on a continual basis. Because the company offers over 2350 finished goods as part of their product offering, their demands for product and data management are extremely high.
In the product development and production phases, this includes the need for multiple ERP features and functionalities, from MRP scheduling and planning, to sourcing and warehouse management. Lastly, the company produces mainly low margin goods, so optimizing lean manufacturing production is a major key to maximizing turnover.
Key Software Functionalities Desired by the Client
Although the client wanted to have access to several areas of focus and functionality in their new solution, here are three areas that carried additional resonance:
1. Deduction/Rebate/Promotion Management
Since the client engages with a variety of brokers and suppliers on a daily basis, it is critical they have a system capable of managing dynamic rebates and promotions. This includes the capability to call out invoices with deductions for rebates, chargebacks, setting up invoice promotions, weekly vs. monthly vs. annual rebates, and vendor chargebacks. Additionally, due to the high sales volume and various vendor types and pay structures used by the client, they need to be able to handle broker commissions in a simple yet effective way.
2. Warehouse Management & Administration
Since the client is multi-site and has several warehouse locations, it is necessary for them to find a system with advanced warehouse management functions. The best Warehouse Management Systems (WMS) are extremely helpful when it comes to traceability, and will be able to accommodate the client’s regulatory needs after the system modules are customized to their business operations.
Reporting tools such as KPI dashboards and available inventory & status are also particularly important.
Other key tools within the umbrella of warehouse administration include customer order visibility, the capability of setting up several warehouses, and inventory movement tracking and reporting. Notably, the barcode capabilities are critical with regards to lot/serial number tracking and cycle/physical count capabilities.
3. Traceability in Production & Quality Control
Our client requires in-depth traceability functionality within the context of production, like the ability to split or combine lots. Additionally, in the context of quality control, there are a couple of functionalities that need to be available to the user in order to conduct recalls. These include lot tracing by specific time sets given a number of lots, audit trail reporting for document data control and record retention, and intensive lot traceability and control.
Transitioning from the Long List to the Short List: Deciding Between Software Vendors and What Lies Ahead
After concluding the future state business processes mapping stage, we delivered a long list of potential ERP software vendors to our client. Currently, Ultra is in the vendor qualification phase with the client, which consists of two-hour demo sessions with each vendor.
After this initial demo stage, our client will then narrow the long list of ERP vendors down to a short list and choose between two vendors and their ERP products. Once the decision has been made, we will then discuss an ERP implementation methodology with both vendors and determine which will be the best fit for our client, from both a technological and cultural standpoint.
Once our client has selected their ERP system, we will help them through the negotiation process and begin implementation planning. The company has a contract finalization meeting targeted for February 28th, and the implementation project will commence shortly thereafter.
To learn more about ERP software for food manufacturing companies, and how Ultra can help you in your search, contact us today.