Top Supply Chain Challenges in the Food and Beverage Industry – and How to Overcome Them

Let’s take a brief look at several of the common supply chain challenges Food and Beverage managers are grappling with as market demands evolve.

Supply Chain workers in the warehouse checking data on tablet computers with a forklift in the background

If you talk to Food and Beverage executives today, you’ll likely find that many organizations face the same supply chain management (SCM) challenges and frustrations in bringing their products to market – and an increasing number are turning to ERP (Enterprise Resource Planning) solutions to help them maintain a competitive edge.

That’s because, when it comes to logistics and supply chain management, the Food and Beverage industry faces a slew of unique challenges, ranging from volatile commodity pricing and inventory management to quality and safety requirements. Add to that the pressure of frequent new product introductions, high demand uncertainty, complex manufacturing constraints, and perishability, and the list is daunting. Inventory optimization is becoming increasingly important in the industry as customer demand rises, product portfolios expand, and supply chains lengthen.

So, what does it all mean for Food and Beverage managers?

As market demand fluctuates, the pressure is on leaders in the industry to overcome challenges quickly with effective decisions that keep goods moving, customers happy, and profits soaring.

That’s where an ERP SCM solution can keep your organization sharp and give you a winning edge.

With an ERP SCM solution, you can have a single pane-of-view of your entire scope of organizational needs, make informed decisions in real-time, and take the guess-work – and surprises – out of the equation when dealing with challenges, such as:

Demand forecasting accuracy

Food and Beverage industry companies have undertaken studies on the importance of an accurate and repeatable demand forecasting process. Accurate forecasts aid in increasing production efficiency, reducing inventory, optimizing distribution, streamlining purchasing, and providing confidence in growth projections. However, creating a demand plan that people in various roles and areas can use to build global supply chain management plans can be extremely difficult.

Inventory management that works

Inventory management is a line item on the balance sheet under current assets and one of the highly visible global supply chain management expenses in the food and beverage industry. The amount of inventory needed results from supply chain design, customer service levels, product quality, and the company’s ability to predict demand and produce a product on time. Misaligned inventory positions will result from essential warehouse management that does not consider customer service targets, unique demand variability, lead-time, and lead-time variability of each product/location combination. Inventory management solutions are the most effective way for businesses to free up capital, improve service levels, and give employees time to focus on higher-value tasks.

Time-phased planning for replenishment

Inventory and demand planning results in improved future visibility of the product, customer demands, and material requirements and is one of the best global supply chain management practices. The output also directs the actions required by suppliers and manufacturers to meet market demand efficiently. Food and Beverage manufacturers are increasingly expected to manage inventory at customer locations or guarantee a quick replenishment cycle. Advanced replenishment planning can aid in developing cost-effective global supply chain management strategies that ensure high levels of customer service while minimizing costs.

Improve supply chain management by optimizing master data

As the complexity and speed of the food and beverage industry increase, you may discover that your business solutions and ERP do not provide the depth and breadth of data capabilities required to support advanced global supply chain management. The continued adoption of mature business processes and the ability to leverage the Internet-of-Things (IoT) drives the need to connect multiple systems within your organization.

Sales and operations planning

Sales and operations planning in the Food and Beverage industry focus on balancing and aligning supply and demand over the tactical time horizon while ensuring the company’s financial objectives are met. It can combine data from finance, sales, production, marketing, procurement, and transportation in the food and beverage industry to create a powerful central resource for analysis and decision making. With a comprehensive sales and operations process in place, you can shorten the supply chain management planning process by days or weeks, streamline the planning cycle, and complete multi-divisional analysis in a fraction of the time. Best practices enable you to compare multiple “what-if” scenarios, evaluate critical decisions, and plan contingency plans to avoid risk and outperform your competitors when market conditions change.

Can you relate?

Regardless of how big your organization, if you can relate to any of these challenges, an ERP solution might be the answer to your sleepless nights.

Imagine making intelligent decisions in real-time, freeing up your resources to manage the business rather than dealing with problems that arise from unforeseen circumstances.

Your business is worth investing in. Many of today’s Food and Beverage managers have seen first-hand how an ERP solution can give them a competitive edge, increasing the flow of goods – and the bottom line.

Love what you’ve read so far? Read our awesome blog, 6 Key Inventory Challenges That Impact Supply Chain Management In The Food & Beverage Industry – And How To Overcome Them.  

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest