Enterprise Resource Planning (ERP) systems have been around since the 1960s when they were introduced to help large manufacturers control their inventory. They’ve come a long way since then. Software that streamlines businesses by coordinating information from every section of their operations, these ERP systems now incorporate artificial intelligence and machine learning and have become standard for many companies. Even so, according to the most recent statistics, manufacturing occupied a whopping 34% of the ERP market in 2021. And all signs are that it’s still a growing sector.
While most manufacturing plants use ERP in similar ways, some industries have more specialized needs than others. Food production comes under that category. For these companies, health laws and safety precautions have to be adhered to, ingredients have to be used within a specific timeframe, and care needs to be taken to keep wastage to an absolute minimum. Factors like these dictate the need for food manufacturing plants to have an ERP system designed especially for them.
In this blog, we’re going to take a close look at how ERP software caters to the food-manufacturing industry, with specific reference to the ways it can improve their operations and increase their profit margins. In order to give the best understanding of that, we’re going to start with the basics and examine how ERP works for manufacturing in general.
ERP for manufacturing explained
A regular ERP has standard modules for aspects like sales, marketing, finance, accounting, and human resources. When it comes to ERP for manufacturing companies, these modules are expanded to include functions specific to their needs.
Manufacturing involves processing raw materials to produce goods. If the operation is large scale, heavy machinery could be involved and there could be a sizable workforce. As can be imagined, running an operation like this well is a challenge. The amount of raw materials needed to produce enough goods to fill orders has to be meticulously worked out; the number of workers needed to run the production line has to be precise; the amount of time it will take to fill an order has to be known; and if there’s a glitch in the system, it has to be possible to recalibrate right away. All these considerations can be taken care of, and be taken care of immediately, by ERP for manufacturing.
Why investing in DEAR’s manufacturing ERP software is a good idea
DEAR Systems has an advanced manufacturing module that’s specifically designed to optimize the production process.
These are some of the ways DEAR ERP for manufacturing can do this:
- It can ensure the output of the production line targets the filling of customer orders only, so the company won’t be left with excess finished goods on its hands.
- It can organize the production process in real time, making any required adjustments to finished goods happen with a minimum amount of down time.
- It can ensure the best use of resources, both raw materials and workforce, is made.
- It gives complete visibility into all aspects of the supply chain.
- It can oversee planning and scheduling in its entirety, automating complex Cost of Goods Sold (CoGS) calculations.
- It will assure that high-quality products are delivered on time, consistently.
A breakdown of DEAR manufacturing ERP’s advanced features
More detailed bills of materials
A Bill of materials (BOM) is a comprehensive list of the components needed for the manufacturing process. DEAR is a cut above because it offers various types of BOM. These include Assembly BOM, Production BOM, Make to Order BOM, and Product Family BOM. While still a listing of components, each groups items in ways that are helpful for different kinds of industries. As a consequence, DEAR’s BOMs give in-depth insights that are specific to a particular manufacturer’s needs.
Better estimates of manufacturing costs
DEAR has a Finished Goods Assembly module that tracks the use of raw materials and constantly updates the total cost of assembling the goods. It’s a useful tool that lets manufacturers know the exact costs being incurred at all times while keeping them abreast of the amount of raw materials they have in stock. An added benefit is that the system can automatically reorder, so there’s never a possibility of running out of anything.
Inventory write-offs made easy
We all know that inventory can get damaged, lost, stolen, or become obsolete. They’re called inventory write-offs. The challenge comes in keeping accurate records of them in the accounting department. DEAR’s Inventory Write-Off module makes this easy. Moreover, it can be applied to service-based expenses as well.
Disassemble your bulk inventory into individual items
It’s common for manufacturing companies to buy raw materials in bulk but sell completed items in small quantities or even individually. DEAR has a disassembly operation that can take all the items on the BOM and break them down into their separate units. It’s a facility that simplifies costing.
Sort out goods
DEAR helps you put goods together when there are orders for them, then take them apart if they’re returned.
DEAR and food-manufacturing plants
Of course, our primary purpose here today is to discuss how manufacturing ERP software can help drive revenues for the food industry. Here are some of the features DEAR offers for companies that manufacture food.
Batch tracking. Batch tracking keeps on top of expiration dates and defective products, so there’s no chance of sending anything out that isn’t in top form. DEAR does this by assigning batch numbers, expiration dates, and serial numbers to finished goods. It’s how you know where everything is in the process at all times, even across multiple locations, and whether they’re still fresh or not.
Recipes that are consistent
The importance of maintaining high quality and taste in the food industry and consistently producing the product customers expect goes without saying. To achieve this, DEAR’s detailed BOM assures you’ll always be using the right ingredients in the right amounts. It also makes it easy to create new recipes.
When it comes to food manufacturing, it’s especially important to know what you have in storage at all times and when those items that are perishable reach their expiry dates. DEAR’s inventory management system can do this effortlessly. In addition to letting you know what you have and when it’s going to become unusable, the system can be programmed to reorder items when stock levels reach a predetermined low.
All your expenditures in one view
This can be achieved with DEAR’s Job Costing module. It can combine all your expenses from the amount you spend on inventory to production costs – which include third-party manufacturing and packaging – to the actual cost of all the services you provide. The financial insights this software gives are almost immeasurable when it comes to helping a company become more profitable.
Rapid order fulfillment
If your food-manufacturing facility fills online orders, this is a boon. DEAR automates the entire order-fulfillment process while allowing you to track your goods with a single click. It will free you from those painstaking manual processes and give your customers a great shopping experience.
Different industries have different requirements, and when you consider the fact that food has limited shelf lives and restrictions for health and safety, you need a software that can manage the unique requirements of food manufacturing.
DEAR has all the modules food manufacturing needs, automating processes to ensure efficient, smooth-running operations and, ultimately, greater financial success.