One of the most important decisions to make during an ERP implementation is selecting the right software. For the Food and Beverage industry, there are several unique requirements to consider.
Accuracy
Does the ERP offer the tools to record the data that is needed?
Data accuracy needs to be looked at through two lenses: operations and costing. One of the key operational factors is to validate whether the system can support process manufacturing. Process manufacturing can provide features to record production as formulas (or recipes) as opposed to traditional bills of materials. This can provide a variety of additional data recording options such as production yields. Going hand-in-hand with this is Material Resource Planning (MRP), which ensures the ERP can handle things such as material substitutions, which is critical for long term success.
Additionally, there are several ways that inventory costs can be recorded based on the selected costing method. An ERP implementation is a great opportunity to change costing methods based on the needs of the business. Some common costing methods for Food and Beverage are Standard Cost, First In, First Out (FIFO), and Last In, First Out (LIFO). Selecting an ERP with the right costing method is essential.
Traceability
Will the ERP solution record enough data easily and accurately enough to produce timely recall reports?
Traceability is not only a regulatory requirement, but it can drastically reduce risk and cost to a business if done correctly. Having lot control in an ERP system is a must, but having the ability to configure the lot sizes is also critical. The smaller the lot sizes, the smaller the potential recall buckets could be, based on how specific the raw material consumption recording is.
Additionally, having a solid traceability reporting stack can reduce effort not only during actual recalls, but also during periodic mock recalls. This can help keep the quality team focused on improving end products, not administrative work.
Flexibility
Can the ERP solution adapt to changing business needs?
Business requirements can change daily in the Food and Beverage industry, whether it is from the raw materials the come through the door or customer specific expiration requirements. Many food and beverage manufacturers produce items with short shelf lives and to complicate it further, some customers have even stricter shelf life requirements. Being able to select the right product and lot for each customer is paramount.
It is also important to be able to account for approved substitutions for raw materials. If a specific raw material is out of stock or out of season, having the system dynamically use substitutes is crucial to reduce manual work of replacing items in the recipe and preventing the continuation of the production process.
Quality Control/Quality Assurance
Will the ERP offer tools such as quality testing to ensure the highest quality product reaches the end customer?
Ensuring that the end product is safe and meets or exceeds acceptable standards for end customers is crucial in the Food and Beverage industry. While most ERPs are not full-blown Quality Management Systems (QMS), many have fully-featured quality control modules that can take businesses off of spreadsheets and into an integrated system. This ensures the production and quality teams are transacting in real time to correct quality control issues before the production process is finished. This could be anything from recording metal detector tests to microbiological testing to periodic testing of the color of the product.
When something does go wrong, systematically quarantining the product and ensuring it is not shipped to customers until the issue is resolved will increase customer satisfaction and reduce costs. In addition, some ERP systems can offer non-conformance recording to ensure that when something does go wrong in the production process, team members are provided steps to resolve those issues and progress on those steps are recorded.
While many ERP systems offer the functionality described above, Microsoft’s Dynamics 365 for Finance and Supply Chain excels at going beyond these requirements. Read more about this powerful functionality and why D365 for Finance and Supply Chain is a top contender for Food and Beverage manufacturers.
Get in touch with us! At Ascendex, one of our core values, “Passion,” drives us to help you be successful in selecting and implementing the right ERP software for your business.