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ERP Inventory Management Must-Haves: Attribute- and Date-Code System

Enterprise Resource Planning (ERP), Manufacturing Intelligence, Traceability
November 13, 2020
technician examining olive oil

Country-of-origin. GMO. Non-GMO. Organic, transitional, non-organic. Heavy metals. Allergens. Inventory management of customer-specific quality parameters is growing more complex by the day. Having the capability through a single digital system to easily manage these attributes alongside expiration date is a must for food and beverage plants. We do mean “a must.” Whether you use FIFO (first in, first out) or FEFO (first expired, first out), controlling expiration date along with the quality attributes of your products is crucial. It enables you to meet customer requirements, comply with regulations, protect consumers (and your reputation) and operate profitably. But here’s the trick, without the ability to collect actionable data you can’t manage and use data to make better decisions in-the-moment. Failing to manage your inventory to the degree customers demand could, on one end of the spectrum, cost you revenue; on the other end, it could cost you your business. But many food and beverage plants — manufacturers, distributors, and processors alike — are unable to connect their entire supply chain to manage inventory at the attribute- and date-code level.

Why can’t food and beverage manufacturers take control of inventory management?

Legacy systems, multiple systems, and outdated spreadsheets that lack the capabilities. We see a lot of food businesses struggle, with many attempting to do it manually. (Don’t.) We’ve seen companies make expensive inventory errors when their inventory management systems can’t manage both attribute and expiration date. One distributor was inadvertently sending organic strawberries to customers that were paying for non-organic. Another was unable to meet an important customer’s urgent request for additional product because the distributor’s customer service team didn’t have good enough visibility into when the next batch that met said customer’s requirements would arrive from the supplier. Good, real-time inventory management systems can alert supervisors to potential mix-ups. Say an operator pulls the wrong item. Would your people rather find this out after the fact, or while there’s still time to correct it? Take our word for it — the drinks packager whose operator pulled the wrong flavor juice-concentrate drum and had to stop the line for 4.5 hours to drum it off and get the correct flavor in the tanks? Definitely would have liked an alert. Substitutions are also impacted. With an automated, prioritized list of substitutes, supervisors eager to meet shipping deadlines won’t mistakenly give operators a substitute meant for another order. Or, if you’re out of the best substitute, your operators can easily see the next-best one to pull. One flavorings business saw its on-time shipments improve by 20% once it gained the capability to manage substitutions by attribute and date code.

The use of systems that are not integrated and don’t support real-time information only leads to confusion, risk, and revenue loss.

What degree of control do you have over your date-sensitive inventory? What degree of control would you like to have? Is your current inventory management system able to do the following tasks? …

  • Manage date codes and attributes
  • Alert operators when the “best” item was not selected
  • Recommend, and prioritize, optimal substitutes to avoid ingredients going out of date and being discarded
  • Track, as you make substitutions, what went into each batch
  • Connect attributes to specific customers and orders
  • Provide clear predictive models on-demand to prevent overstocking
  • Map where products are stored and trace usage at every stage to avoid contamination
  • Prompt your management and operators to make good business choices

Because at the end of the day, that’s what you need your inventory management system to do — support choices that help you get the right date-sensitive products to the right customers at the right time. Date control isn’t a luxury or some nice-to-have software feature — it’s essential. A smart manufacturing platform helps you optimize your manufacturing process end-to-end with ease.

Time for your inventory management to get smart and keep pace with industry demands and requirements.

The food and beverage industry is a competitive one. Why crack the door for a competitor to step in or risk losing valuable retail placements? Why let inefficiency cause you to leave profit on the table? Why risk running afoul of regulations? Think about how your customer service and profit margin could improve if you were able to minimize overhead and increase efficiency by removing silos and automating bottom line processes. Consider assessing your current inventory management system and talking with an outside expert who can demonstrate what’s possible. Learn how Plante Moran can help you increase productivity and take the guess work out of your inventory management. For more information on what it takes to error-proof your operations, download the Ebook 6 Ways Error-Proofing Protects Your Plant Floor.

About the Author

Joseph Puglia Principal, Plante Moran, Technology Consulting | Manufacturing & Distribution

Joe has 30+ years of food and beverage manufacturing and supply chain experience, with over 15 of those years as an executive-level leader. Joe has led or been a part of over 15 business system implementations in companies ranging from small family-owned companies to Fortune 500 companies. He has helped businesses select and implement WMS, ERP, and subscription enterprise software. Client’s appreciate his advice on working through process reengineering and critical change management challenges. Joe has managed large capital projects including new distribution centers and new manufacturing plant design and startups. His certifications and accreditations include— ISO 9000, SQF Practitioner, FSMA Qualified, and HAACP. He holds a BS degree in Industrial Engineering and an MS in Management Engineering from New Jersey Institute of Technology, and an MBA from Rollins College.
joseph puglia