Food and Beverage ERP Requirements: What You Need to Know

In our experience, the most important thing to note about working with such a wide range of manufacturing companies is the fact each industry is different, not only in their processes but also in what they look for in an ERP solution. The food and beverage industry is no different, and this blog serves to highlight the main functional areas that need to be addressed in a food and beverage ERP solution.

Recipe Management

The first main area of focus for food and beverage ERP is recipe management. All manufacturing companies are defined by the products they produce, but food and beverage companies face a more stringent expectation in this area. Each recipe ingredient not only impacts the taste of the product, but also the nutritional value, a metric monitored strictly by numerous governmental regulatory agencies. Food and beverage ERP solutions hope to offer the following feature functions to aid in recipe management:

• Version control of items such as batch sheets and recipes/formulas allows the manufacturer to strictly manage which version is to be used in production.
• Formulation helps manage what ingredients are being used to create the end product. There might also be a requirement to calculate nutritional values that result from the formulation.
• Alternate BOMs assist the manufacturer in quickly and efficiently identifying other raw materials that can be substituted if an out of stock is encountered.
• Alternate Routings provide a means to predefine multiple ways of manufacturing an item. These alternative ways could be driven by factors such as batch size, overcapacity of a work center, etc.
• UOM conversions (lbs to kgs) assist with accurately managing different units of measure for items. Examples of this include selling in a specific unit of measure (e.g. in pounds) versus purchasing (e.g. kilograms) versus warehousing (in cases).

Inventory Control

Inventory control addresses how the product is stored within the warehouse after production. Once the product has been made according to the recipe, it is extremely important for a food and beverage ERP solution to monitor the storage of the product to ensure an efficient packaging process. There are a few specific functions that need to be monitored, including:

• Lot Control
• FEFO/FIFO – First Expiration First Out / First In First Out
• Expiration Date Management
• Shelf life
• Bar coding & use of technology (e.g. RF) to increase accuracy of information

Kitting

Kitting is the grouping together of a predefined group of items. This process is essential to the food and beverage process because oftentimes clients order multiple ingredients to create one product. The ability to create and track kits in a food and beverage ERP system is imperative.

Quality

With any manufactured product, quality is essential for customer satisfaction. When food and beverage ERP solutions are capable of quality control in the following areas, manufacturers thrive:

• Management of allergens, colors, gluten free, kosher, etc.
• Quality testing
• Incoming inspections
• Test plans by item, customer, vendor

Planning & Scheduling

There are many tasks for a food and beverage manufacturer to take into consideration when planning and scheduling manufacturing runs. For one, they need to have the ability to manage runs based on the many constraints, like allergens, and change-overs.

A change-over occurs when you’re making one product in a work center and then move onto another product at completion of the first product. Sometimes this change-over could be as simple as brushing down the machine. In another instance, you might need to take all of the equipment apart and completely wash it down and sanitize it. This is especially important when you’re manufacturing products containing allergens.

Forecasting

Forecasting is important for many reasons, but especially for manufacturing companies to allocate an accurate budget. Food and beverage ERP solutions need to address this area while taking a couple things into consideration:

• Seasonality – The demand for certain products changes with the seasons, and a food and beverage manufacturer needs to account for this fluctuation.
• Customer Forecasts – Manufacturers need to be aware of the forecast cycles of their customers in order to know how much of their product to produce. Integration of customer forecasts.

Reporting

Food and beverage manufacturers are required to adhere to strict regulations and achieve certain levels of certification. Some examples of groups and documentation that detail these regulations and certifications include:

• British Retail Consortium (BRC)
• CFR21
• Global Food Safety Initiative (GFSI
• HAACP
• GMP
• Safe Quality Food (SQF)

Resources

• Check out a detailed Food and Beverage Industry White Paper summarizing key considerations for food and beverage processors in regards to ERP requirements.
• To learn more about regulations and certifications for the food industry, read our blog post “ERP for Food and Beverage Industry: 3 Mission-Critical Focus Areas.”