Cloud ERP: The Next Big Thing in Food Manufacturing Industry
The modern food manufacturing industry faces many challenges. Manufacturers presently confront the need for greater variety and faster product development, along with a constant struggle to ensure efficient replenishment and timely distribution. In addition to the supply chain disruptions caused by COVID-19, increasing demand for plant-based food alternatives and rising awareness about sustainable business practices has added to the pressures on food manufacturing.
But… With the great challenge, comes great opportunity.
These challenges have placed the food industry on the precipice of a great transformation. Food manufacturers are looking at this dynamic business environment as an opportunity to transform outdated business practices and automate critical business functions. Production automation has been adopted by manufacturers for quite a while already and now, Cloud ERP software is emerging as the champion of business automation for companies in the food business.
The application of industry test cases in the development of true cloud ERP results in industry-specific solutions for each business segment and micro-vertical. Companies that manufacture or process bakery products, dairy products, chocolates, confectionaries, poultry and meats, organic foods, packaged foods, edible oils, and other food products, are embracing cloud ERP to integrate all business functions on a singular yet portable platform. The existence of work-from-anywhere software can be very helpful for these hyperfunctioning businesses.
What is Cloud ERP?
Cloud ERP is a web-based software solution that replicates the traditionally modular structure of an ERP system on a secure URL. The user can log in to the application with valid credentials to access modules like procurement, inventory management, production, quality, compliance, finance, sales & marketing, etc. using a web browser. No additional infrastructure is needed on the client’s end to implement a true cloud ERP, which results in more than 31% cost savings as compared to on-premises ERP according to a survey. Food manufacturers are beginning to understand the unlimited scope of the freedom to access, enter and modify data into a singular system from any location. With countless business transactions happening every minute, users need to be updating the ERP database in real time. Companies involved in the production, distribution, processing, preparation, preservation, and packaging of food items can keep track of material throughout all these steps with handheld mobile devices and scanners (Barcode, RFID).
Let’s understand the importance of portability with an example:
During a cycle count, employees find surplus lots of oranges, butter, and eggs in the inventory. Now, instead of having to remember the excess quantities or noting them down on paper, the employees can simply log in to the cloud-based ERP and feed the numbers into the system. This would negate the chances of human error and standardize the process of cycle counts. Many processes can be similarly automated with a cloud ERP system.
Benefits of Cloud ERP in food manufacturing
Cloud ERP encapsulates all the business benefits of traditional ERP software and delivers important additional benefits on top of it. Right from fast-tracking innovation and managing perishable inventory to improving product quality, precise regulatory compliance, end-to-end traceability, accurate financial processing, and customer relationship management, true cloud ERP does it all. Above and beyond these functionalities.
The Overlying Benefits of Having Your cloud-Based Food ERP Software Are Listed Below:
- Low entry barrier
- Convenient Mobility
- Rapid Innovation
- Enhanced Visibility
- Supply Chain Control
- Process Compliance
- Easy Scalability
Low entry barrier – Not all food manufacturers are big corporations. Small and medium-sized food manufacturing is a sizeable industry that needs cloud ERP to compete with established conglomerates. Cloud ERP sets a considerably low entry barrier with its economic ticket size and free software updates. A small manufacturer can simply buy a periodic (monthly, quarterly, yearly, etc.) subscription to access a full-fledged ERP system.
Convenient Mobility – If an urgent bulk order for bread loaves is received at a bakery and the production manager is not present in the factory premises, they can still issue a requisition from wherever they are. Cloud ERP can be accessed over any secure internet connection and data can be accessed at the click of a button. Executives can create, release, update and monitor work orders in real-time to keep up with delivery schedules.
Rapid Innovation – Coming up with new contemporary food flavors/recipes based on market demands is the rage right now. As the Sales/CRM departments observe current market trends, the product development team can innovate products according to customer expectations and approvals can be accelerated. The recipe can be shared with the production manager instantaneously, irrespective of the geographical distance between departments, thereby enabling food manufacturers to capitalize on the first mover’s-advantage.
Enhanced Visibility – With cloud ERP, a potato chips manufacturer can assign unique IDs to spring or summer produce potatoes (having different water content) right at warehouse entry. The unique IDs can be scanned with handheld devices at the time of picking and unique machine settings can be applied for production. All throughout the production and delivery process, materials can be identified, traced, and located for verification and updates.
Supply Chain Control – When food manufacturers receive orders for their products, the sales executive can punch them into the system right from the field. Cloud ERP shares the details of the order with all the relevant departments in real time. Instant alerts are sent to production managers and inventory controllers for production to commence as soon as possible. Then, the WIP material is traced throughout the production process to ensure on-time delivery. Thereby ensuring a streamlined and tamed supply chain.
Process Compliance – Regulatory bodies have been notifying food companies to maintain complete traceability of their goods. In such situations, cloud ERP offers better compliance, by ensuring step-by-step traceability. Upholding cGMP norms, complying with FDA regulations, following HACCP guidelines, declaration of allergens, and separating halal/kosher foods can all be made supremely easy with cloud ERP.
Easy Scalability – When a cheese and butter manufacturer looks to expand their business by opening new manufacturing locations to serve bigger territories, they can easily scale their existing cloud ERP to match the new identity of their business. Cloud ERP scales on demand, without requiring any additional servers for more users, locations, or subsidiaries. The ability to manage multiple business units from a single ERP solution irrespective of their location gives the business a standardized culture of operation.