What Is a Food ERP System?
Purpose, Functions and Benefits

By: | Category: Distribution / Manufacturing, ERP

How do you manage your food or beverage manufacturing or distribution business? If the answer revolves around inefficient, old-fashioned processes, you have a lot of room to improve.

It’s not uncommon for companies to rely on manual tasks and disconnected software to oversee everything from recipes and formulations to inventory management. These systems may have been in place for years or decades, and they can feel entrenched. There’s a much better option out there, however: a modern, specialized enterprise resource planning (ERP) system.

ERP in food and beverage manufacturing is a category of solution that exists to streamline and connect every management function. This software is the go-to option for departments ranging from sales to quality assurance, and helps you keep every employee on task.

Simply buying a new piece of software isn’t a cure-all for your business’s needs. You’ll have to verify that your chosen platform is designed for the industry, technologically sophisticated and packed with the right feature set. Food ERP solutions that do meet those criteria, however, come with a long list of benefits that can help you maintain a competitive advantage.

Why Do You Need a Food Manufacturing ERP System?

In the simplest possible terms, you need an ERP platform because it can serve as a centralized hub for your business. Today’s food manufacturing and distribution companies are complex, especially when they span over a large area or offer numerous product lines. Whether you presently operate a major food company or plan to grow, it’s worthwhile to use technology to bring your operations under control.

Not only does an ERP system unite all your departments and facilities, from offices to warehouses and distribution centers, but it also incorporates every relevant task. If you’re using separate pieces of software to manage inventory levels, logistics, analytics and more, there’s a real risk of information being lost in communication and of wasted time and effort. It’s difficult to stay competitive in a fast-moving industry with those disadvantages, making ERP a competitive must-have.

Those connectivity and efficiency benefits of ERP software apply across industries. There’s a way to unlock further value, however: by purchasing an ERP system specifically designed with the food and beverage industry in mind.

Specialized food ERP software stands in contrast to industry-agnostic offerings because it can offer highly relevant functionality without the need for excessive configuration. Useful tasks to complete with the aid of a food and beverage ERP platform include:

  • Management of formulas, ingredients and potency, ensuring consistency and precision across product lines and locations.
  • Compliance management, keeping your items in line with Food and Drug Administration (FDA) rules and regulations, such as the Food Safety Modernization Act (FSMA).
  • Quality control, including oversight of food production and shipping, as well as testing of products in your facilities.

From the everyday tasks of running a business to the specific practices that can set your food company apart from the rest of your field, an advanced and purpose-built ERP system can help you thrive. 

Key Features of Food ERP Systems

Not every food ERP software offering will contain every possible feature, and not every business comes with the same needs. Finding a solution with a long feature list, one that matches your specific needs and also gives your business room to grow, is your best bet to find a technology tool that will deliver real value.

When dealing with specialized food and beverage technology, features tailored to the field can be especially important differentiators, helping the best ERP platforms stand out from the pack. Impactful capabilities to look for include:

  • Shelf life and expiration management: The ability to oversee shelf life and inventory levels includes a few separate practices at different stages of the production process. You can test and use raw ingredients at the right time, while also monitoring the shelf life of finished products as they move through your warehouses and distribution centers, allowing you to strategically move products before they expire and go to waste.
  • Quality control: By managing the differing quality specifications across your separate recipes and product lines, you can ensure you’re using ingredients that meet your standards, while keeping your finished goods in line with industry norms and regulatory guidelines..
  • Traceability and recall management: A recall is always a challenging and expensive process. It is especially so if you can’t track specific batches of product digitally. An advanced ERP lets you find the destinations of items as they pass through distributors’ and vendors’ hands. This allows you to execute an efficient, compliant recall when necessary.
  • FSMA compliance: Recent updated FDA rules like FSMA mandate that food and beverage providers effectively implement visibility and traceability of their products. A food ERP system grants you these capabilities without excessive manual effort from your team.
  • Ingredient potency management: Striking the exact right balance around raw ingredient concentration is a key calculation in terms of product quality, cost management and waste reduction. A purpose-built ERP system lets your team perform these calculations accurately and quickly.
  • Continuous improvement and non-conformance management: By implementing an ERP system that can identify instances of non-conformance —  when your products, services or products don’t conform to internal or industry standards — you can set up quick and effective continuous improvement functions.
  • Recipe and formula management: Using a food ERP system to implement consistent recipes and formulas across all your locations, you can create reliable quality for customers while promoting internal traceability. You can even manage variations, all without requiring heavy hands-on input from your employees.
  • Change management: Overseeing changes and updates to your recipes and formulas is an essential niche within the overall recipe management process. By analyzing all potential changes and documenting them in detail, you can keep your updates purposeful and apply them consistently, with minimum disruption and no unnecessary resource waste.
  • Trade promotion management: Essential trade promotion management processes, such as implementing discounts, making forecasts and reconciling costs with sellers, are more streamlined when handled through a centralized ERP system.
  • eCommerce integration: Linking your internal processes, as controlled by your ERP, with eCommerce solutions allows you to seamlessly connect food production and shipping management with a commercial website.

ERP for the food industry puts these features and more into a single interface. Properly implemented, it’s the beating heart of your manufacturing or distribution business.

Advantages of Using Food ERP

The benefits of ERP in the food and beverage industry aren’t academic. You can start to feel significant process improvements, starting soon after you adopt a new platform. There are two main classes of advantage: first, the types of effectiveness boosts that come from using ERP software in general, and second, upgrades specific to food and beverage.

General ERP advantages tend to include:

  • Reduction in manual effort: When employees have to perform a large number of manual processes, it takes time away from value-adding work they could be doing. Automating common functions via ERP puts hours back in the day, letting you accomplish more with the same number of people.
  • Increased data accuracy and deeper analytics: Data entry and analysis are among the most important functions that can benefit from ERP use. A centralized ERP system allows you to work from a single source of data truth, performing in-depth analysis based on consistent numbers with less risk of human error and less work associated with data entry.
  • Effective, strategic raw material and inventory movement: Planning out your supply chain moves works best with automation. A capable ERP system grants you visibility into your warehouses and distribution centers, as you track ingredients, equipment and products, both at rest and in transit.

Specific capabilities from food manufacturing ERP software can include:

  • More accurate fill rate projections: Serving orders to wholesalers, distributors and merchants is a challenging process tied up with complex variables, including differing expiration dates. A purpose-built ERP system can optimize fill rates and minimize stockouts.
  • Improved recall performance: If and when a recall becomes necessary, a food industry ERP system helps food manufacturers maintain centralized visibility, allowing these producers to execute that recall in a quick and orderly manner, meeting requirements and limiting the resulting budget hit.
  • Strong FDA compliance: Obliging FSMA and related regulations is a necessary way to avoid fines and other penalties. When all the necessary compliance functions are embedded within a central ERP system, this process becomes a natural part of business operations.

Effective Food ERP Adoption

Finding the right partner for ERP adoption ensures you’ll receive both the best Food manufacturing ERP software for your purposes and a smooth, effective implementation experience. You should look for:

  • A feature set designed with the food industry in mind.
  • Cloud-based infrastructure to enable seamless companywide access.
  • Support from an expert team of personnel.

The Sage X3 Food ERP solution, provided and enabled by the Net at Work team, is designed to deliver a quick return on investment, as well as lasting value. This ROI comes from a fine-tuned and user-friendly feature set paired with responsive, helpful support.

Get Started with a New Food ERP System

If your business doesn’t currently use an up-to-date ERP system, or it’s been too long since you assessed the performance of your current system, there can be significant benefits in upgrading. The gains in productivity, precision and overall capabilities that come with a new food ERP system can boost your competitive advantage in the years to come.

Contact Net at Work to see how Sage X3 can address your specific needs and challenges.