Keys to Inventory Optimization for Food ERP
In the food and beverage processing industry, inventory optimization is crucial for the success of the business. Inaccuracies in inventory can lead to a variety of problems, such as wasted products, lost sales, excess inventory, and even food safety hazards. In this blog post, we will discuss several strategies and keys for improving inventory accuracy and optimization for a food and beverage processor.
Use Barcode Scanning
Barcode scanning integrated with your ERP solution can help you to quickly and accurately track your inventory. By scanning products as they come in and out of your inventory, you can keep track of the exact quantity of each product and quickly identify any discrepancies.
Audit and Ensure Accurate Bill of Materials or Formulas
An accurate bill of materials (BOM) or formula, as part of a food-oriented ERP, is essential for inventory optimization. A BOM is a list of all the materials and ingredients needed to produce a product. Having an accurate BOM allows you to know exactly how much of each ingredient is needed for each product, reducing the risk of over or under-ordering. Additionally, an accurate BOM can help identify any potential production issues, such as a shortage of an ingredient, before they become a problem.
Prevent Food Expiration via a FIFO/FEFO System
One of the most important steps to optimize your inventory is to ensure the proper turn of your inventory to prevent food expiration. This can be done by implementing a strict first-in, first-out (FIFO)/first-in, First Expire Out system, where older products/closest to expiration are used before newer ones. This will ensure that the product is being used before it has a chance to expire, reducing the risk of wasted products. A food-oriented ERP such as Aptean Food and Beverage including the JustFood Edition will direct your team to utilize short code-dated lots first to ensure spoilage is kept to a minimum.
Use MRP and Forecasting
Another key strategy for optimizing your inventory is to use MRP (materials requirements planning) and forecasting. MRP is a system that helps to plan the production of products by taking into account the inventory levels, sales forecast, and production schedules. By using MRP, food and beverage processors can ensure that they have the right materials on hand to meet customer demand.
For long lead time items traditional MRP driven by orders is inadequate. By using a statistical based forecast to either drive raw material demand through MRP or to inform reorder points, forecasting can help to ensure that an optimal level of inventory for those long lead time items is available for consumption.
How Adroit Can Help
Adroit North America can help you to improve inventory accuracy and to optimize your inventory through multiple strategies including bar code scanning, adoption of First In First Expire inventory rotations, an audit of a bill of materials to ensure accuracy, and leveraging MRP and forecasting. By working with Adroit, food and beverage processors can ensure that they have the right products and materials on hand to meet customer demand while also enhancing their bottom line.