Food & Beverage: Five Ways SYSPRO can Alleviate Your Headaches (Part 2)

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Part 2 – view part 1 here

SYSPRO’s association with process manufacturers is longstanding, and we continue to enjoy significant growth in our food and beverage customer base. I tend to think that we attract food and beverage customers with our industry-specific functionalities, our service, and the modular, cost-effective nature of our offering. SYSPRO’s enviable track record of retaining customers through periods of growth I credit to the scalability of our solutions, and to the dedication of our service representatives.

In my last blog, I discussed ways that food and beverage companies use SYSPRO to optimise traceability and trade promotions. Today I’m going to move on to cost control and inventory optimisation, and finish up with a short discussion of the Cloud.

Cost Control

It’s easy for costs to skyrocket, and the reasons are not always obvious. SYSPRO, integrated across an entire food and beverage company, provides 360-degree visibility into every facet of accounting, distribution and operations, unveiling important insights into metrics such as job cost performance, margins and pricing. Process manufacturers often utilise LEAN methodologies, and SYSPRO’s 360-degree visibility gives manufacturers the power to go LEAN, further their LEAN aspirations, or simply streamline and optimise their value chain.

End-to-end costing analysis allows manufacturers to assign more accurate production and overhead costs, and creates opportunities to eliminate redundancies, initiate improvement plans, and minimise non-value-add activities. SYSPRO can also facilitate the automation of processes that used to eat up surprising amounts of time, labour and resources, such as reconciliations, communications, paper-based documentation, etc. With an accurate picture of costs, it becomes easier to maximise profitability, even in a low margin environment.

SYSPRO’s bill of materials (BOM) provides detailed costing and an expected cost at each level of a production run. The Work in Progress (WIP) module, used in conjunction with the BOM, allows for the comparison of expected versus actual costs, often revealing realistic targets for cost savings.

One of my favourite SYSPRO tools is the Executive Dashboard. Dashboards are highly configurable, and give executives an ‘at-a-glance’ summary of complex information. In the office, at home, or on the road, dashboards allow managers to monitor key performance indicators (KPI) in real time. In addition, our ‘what-if’ costing features make it easy to compare the cost effects of different raw materials, production routes and labour rates. In a business environment as fast-paced and constantly changing as food and beverage, dashboards can shorten reaction time and decision making, heightening agility and giving the company a competitive edge.

Inventory Optimisation

One of the biggest balancing acts in manufacturing is inventory management, with some companies carrying as much as 50% of their capital in inventory. Those making proper use of SYSPRO, however, are usually able to minimise their inventory investment, while still maintaining appropriate levels of stock for demand management capability.

The inventory managers I know appreciate the fact that SYSPRO helps to determine optimum levels for basic, seasonal and safety stock, by factoring in metrics such as target service levels, depletion rate, order lead time and standard demand deviation. By connecting the inventory system to Order Entry, book inventory becomes an exact image of real inventory, providing unprecedented control over inventory and its associated costs. In addition, SYSPRO is an enormous help in enforcing a FIFO (first in-first-out) methodology, and in tracking expired product.

SYSPRO Inventory Forecasting predicts future sales based on historic demand. With Forecasting, managers can identify important products based on factors such as sales value, gross profit, quantity sold and cost of sales. In my experience, Pareto analysis – the famous https://en.wikipedia.org/wiki/Pareto_analysis – 80/20 rule – can really help clear the cobwebs from an outmoded view of a company’s inventory management.

Transformation on the Cloud

By now, you are probably aware that the Cloud can save money on capital expenditures. Not needing a server room, servers, and a high-paid IT department can be a major relief to the old P&L. There is also no doubt that the Cloud provides food and beverage companies with efficiencies that help them to scale. Efficiency and cost reduction, however, are only part of the picture when it comes to Cloud services.

We’ve all read articles, some of them verging on science fiction, about the oncoming ‘Fourth Industrial Revolution’. Whether you buy into the vision or not, there’s absolutely no doubt that manufacturing is changing to embrace new technologies, including automation, artificial intelligence, robots, blockchain (or blockchain-type technologies) and the Internet of Things. It is time, I think, to talk about the Cloud as an enabler of business transformation.

In the last few decades of the 20th century, companies made the choice to stick with their old, manual methodologies, or to join the IT revolution. Those that chose to transform were more likely to thrive. Of those companies that chose not to transform, very few are still around. In my opinion, we are now sailing similar seas – most companies cannot afford to ignore the advantages that accrue on the Cloud. Fortunately, SYSPRO ERP Cloud Services have been designed to provide a seamless, painless and profitable transition into the new manufacturing paradigm.

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Food & Beverage: Five Ways SYSPRO can Alleviate Your Headaches

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(Part 1)

Last weekend a group of colleagues, most of us in the ERP field, broke out the barbies and commandeered a stretch of shady beachfront. The group shares a passion: we are all in one way or another obsessed with manufacturing, which is why we began analysing the value chains that brought us the food and drink we were consuming. As we cleaned up our rubbish, we offered a silent and non-denominational prayer of thanks to the companies that bring us our modern cornucopia of beverages and food.

Back at work on Monday, I found myself brain-storming a blog topic. My mind, still half in weekend mode, turned gratefully to our food-manufacturing conversation. SYSPRO, after all, is the ERP of choice for hundreds of food and beverage companies. Our industry-specific functions are designed to ease the rigours of an extremely competitive industry, by managing financial complexities, optimising operations, guaranteeing quality, and offering precise control over every aspect of the supply chain.

Food Safety & Compliance

If you want to avoid giving a food manufacturer a nightmare, don’t mention Salmonella, E.coli, SARS, melamine, mad cow disease or bio-terrorism. All food production, in-home or in-factory, carries the potential for risk, but for manufacturers, the responsibility is vastly multiplied. Food and beverage companies need to ensure complete food security, as specified by government-mandated, industry-required food safety programs.

Food safety regulations begin with expiration dates and packaging, but extend to traceability of product throughout the entire supply chain. With SYSPRO’s Lot Traceability module, both tracking (farm-to-fork) and tracing (fork-to-farm) per product, lot and supplier ingredient is automatic and easily retrieved. For raw materials, products, packaging materials and processing equipment, a wealth of information is preserved at every point along the value chain, including incoming materials, manufacturing operations, inventory management and customer shipments. For every action that can impact food, at any point in the supply chain, SYSPRO enables a food processor to trace all ingredients back to their source, and all finished products to their retail, wholesale or food-service destinations.

Of course, all that information needs to be made actionable in the event of an emergency, both for consumer safety, and for brand protection. Government-mandated audits are bad enough, but there’s usually a grace period if procedures aren’t quite up to snuff. Mock recalls aren’t always as forgiving. Many processors that supply retail chains are now conducting mock recalls on a quarterly basis, and the cost of failure can be catastrophic, immediate, and final. With SYSPRO’s Lot Traceability, mock recalls are fully automated. Many of our customers can conduct a flawless mock recall in thirty minutes or less.

Of course, SYSPRO is, at root, accounting software, and discussions of functionality inevitably return to ROI. There’s even a value-add to our compliance measures. Lot traceability increases visibility along the supply chain, which can be leveraged to ensure food freshness and quality, improve customer service, streamline schedules and generally reduce the costs of business. In the warehouse, for example, traceability allows pickers to easily adhere to FIFO (first-in, first-out), while fulfilling longer-distance orders from lots that are in no danger of becoming outdated.

Trade Promotion Management

Trade promotions are an enormous element of the Sales & Marketing mix for most consumer goods companies, and food manufacturers are no exception. In fact, many of our customers cite trade promotions as a key component of growth. Promotions campaigns increase sales and provide companies with valuable information on consumer trends and changes – how well these campaigns are managed can be critical to success.

In years gone by, promotions were generally managed by sales team, but these days the prevalence, variety and importance of promotions necessitate the use of ERP. Fortunately for our customers, SYSPRO Trade Promotion Management makes it simple to negotiate the complexities of contract pricing, volume discounts, trade promotions, rebates, multitier credit checking and comprehensive reporting. SYSPRO TPM tracks off-invoice allowances and promotion deductions, and provides efficient reconciliations that result in increased collections. And of course, TPM is integrated into SYSPRO General Ledger, Accounts Receivable, Inventory Control, Sales Order & Invoicing modules. The bottom line? Reduction of confusion and complexity, huge savings in time, better information, better customer relationships, and (the pièce de résistance!) improved cash-flow and profitability.

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In Part 2 of this blog, We will go deeper into SYSPRO’s industry-specific offerings for the food and beverage industry, and how all of these functionalities can be utilised – with lower capital costs – on the Cloud.