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ERP system for Food industry: Opportunity and Challenge

The food and beverage industry enjoys enormous sales volume daily. That’s why businesses need Enterprise Resource Planning (ERP) to adapt to this rapidly changing.

Food manufacturers are currently struggling with the problem of resource allocation while ensuring food safety and cost reduction. As the production scale gets larger, the control system becomes more complex, which requires modern and appropriate software to manage the production process.

Furthermore, recent customer rights laws require Food and beverage companies to provide the details of the product printed on the package, including the origin, traceability, and transparency. So, what is the solution for F&B business in combining production management as well as real-time data pools? The answer is Enterprise Resource Planning (ERP) software.

Overview of ERP system for Food and beverage industry?

In practice, ERP software has proved their benefit in helping food manufacturing company to boost the overall performance and maintain the stability of the operation system. In fact, roundly 95% of businesses agree that our manufacturing process runs more efficiently when using the ERP system. Additionally, ERP software cut down 11% cost of production in comparison with traditional managing method.

What is the ERP system 

ERP software for food manufacturing refers to a type of management tool, which can be a mobile app or web-based app for controlling production operations. ERP system integrating multi-processes to provide a comprehensive dashboard, combining several components throughout the business operation.

Typically, ERP system commonly designs as the custom software development to serving the unique requirement of each business. It updates the work progress of all company departments on a real-time basis. As the technology revolution, ERP systems had been no longer the privilege of Food giants; SMEs also keen on automated software to limit the error of human tasks.

As mention above, Food and beverage industry suffers the tired regulation and law to protect the consumers. It requires Food producers to publicize shelf-life, safe ingredients, consistency, and Food safety. Besides, the Food manufacturer has to follow the guideline of label and packaging governance. All of those criteria can be managed via the ERP system.

How food industry ERP software benefit Food industry 

Enhancing business performance and reduce errors during productions tend to be two main advantages of using an ERP system for Food manufacturing. In fact, approximately 50% of Food and beverage production companies in the market had already used an ERP system. They claimed that ERP software works effectively to cut down process times; while increasing the collaboration efficiencies among employees.

According to Aberdeen Group, there were 96% of successful food businesses perform better with dramatic improvement when adopting the ERP system. The point is that companies keen to develop ERP software that serves appropriately for their need and want. In which, it promises to improve performance even with business-facing rapid scale changing.

In a real-time reporting context, a cloud-based ERP system for food manufacturing provides automatic reports with updated data. In addition, ERP software also keeps operation information secure from external attacks via the latest security technology. The system will thoroughly define user permission, which eliminates the risks of unauthorized access.

Opportunity and Challenges in applying ERP for Food industry

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Inventory management trouble

Since the food and beverage industry trade short self-life products, companies have faced with inventory management challenges to optimize the usage and reduce waste. In which, organic good producers would be struggling with tightened regulations on food preservation. An ERP system combining with the Inventory management program can be a weapon for a company fighting with spoilage, track expiration dates by notifying users of the stock status on a real-time basis.

Related article: How coronavirus outbreak changes online groceries services and food industry 

Food traceability problem

Forbes report that the majority of food companies got trouble with transparency due to its rapidly changing hourly. Customers reserve the right to track all the product status and producers responsible for supply such information.

In practice, detailed ingredient labeling is commonly used in product packaging. However, as technology gets more innovative, End-to-end traceability will be the comprehensive solution for supply date across the value chain. With IT support, companies expectedly maintain flawless data records more adequately.

Strict regulation in Food and beverage industry

In several countries, especially America and the EU promulgate the strictest requirement in production and circulation food products. Particularly, the FDA (The US Food and Drug Administration) controls over 70% of the food supply in the American& market, which published their change in regulation regularly regarding food safety. Consequently, missing any regulation cause enormous losses in both the capital and reputation of these companies.

Online trading challenge

Obviously, e-commerce is the recent and future of food trading industry. The online sale volume expected to reach US$ 100 billion in 2022, accounted for 20% retail revenue. Unfortunately, according to FDI, major food manufacturers and retailers do not fully adopt the context of online grocery. In this case, a proper ERP system working simultaneously with multi e-commerce platforms will be a realistic solution.

Main features that every ERP system for food manufacturing focus on

The report shows that the expected market share for the ERP system, in general, reach US$ 47 million up to 2022. The main reason related to ERP software is believed to help F&B companies come over the challenges in the market. If your business is struggling with ERP software development projects, let take a look at the suggested feature below.

  1. Tracking and reporting: ERP system for the Food industry is expected to assist businesses dealing with a high level of regulatory compliance. This software will show you how to appropriately control every piece of ingredients and recipe during the production process. In which, Food manufacturers might save time and effort when ensures the strict follow food safety regulation.
  2. Quality control: Literally, ERP software helps food companies to deal with policies from regulation sectors. ERP system has to consist of the ability to detect any uncertainty in the process chain and supply notification in case of failure in input’s quality.
  3. Manufacturing management: repetitive and uniform stages refer to the core characteristic presenting the production process, which requires a high level of accuracy. Regardless of any delay in raising the possibility of encountering product issues, which damages the whole production. ERP software provides the ability to monitor the process with the elimination of delays in tasks.
  4. Synchronization among multiple systems: ERP system is required to include integration capabilities, which means the ability to works in multi-devices and connect with other systems. As a result, users can use only one software to access the entire data of the whole system to deliver reports and analysis.
  5. Inventory management and financial integration: Several businesses leverage the potential of ERP systems to combine the feature of raw materials delivery with inherent traceability. Furthermore, companies can aggregate with cost tracking and product lines to estimate the finance status.
  6. Vender supporting and deployment: ERP software should be the bridge to connect F&B companies with their vender. Especially in technical support, food manufacturing companies should search for experiences software development companies to adopt the support of deploying and maintaining the system.
Related article: Top IoT solutions in Food and Beverage industry

In conclusion, using the ERP system is inevitably tools for food and beverage industries for resource optimizing. The fear of lagging behind force food companies constantly adopting innovation in eliminating the technology gap. Obviously, the limited resource suggests businesses seeking help from a custom software outsourcing company. If you are still struggling in choosing the right vendor, look out Adamo Digital. We got rich experience in outsourcing software development for food and beverage companies. Talk to us for more details.

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