Inventory management is critical for every food business. Lost or mismanaged inventory can be a significant drag on your profits and productivity, not to mention the wastage involved.
It’s a serious problem; the Department of Agriculture, Water and the Environments estimates that one-third of the world’s food is wasted. In Australia, we waste around 7.3 million tonnes of food every year. That’s about 300 kilograms per person or one in five bags of groceries. The cost to the economy is more than $7 billion.
Raw ingredient wastage is the food industry’s second-highest cost, at around 25 per cent. The third-highest cost is about 4 per cent. With minor errors potentially causing major problems down the line, it’s worth investing in an accurate and easy-to-use inventory management system.
What is inventory management?
Inventory management covers your entire supply chain, including acquisition, tracing, storage, purchasing and supply of final product. The individual processes are interconnected and often span geographies as raw materials may be sourced from different locations around the globe.
Poor inventory management can lead to lost, spoiled or late shipments, delaying production and incurring unwanted costs. And while some businesses may be able to purchase their way out of trouble by acquiring additional raw materials to cover any shortfalls, it’s not a good solution. Any extra purchases will be subject to the same inventory management risks as the original ones.
Good inventory management does more than save you from financial losses due to extra purchases and lost time. It gives team members and other stakeholders confidence in your processes and can significantly reduce compliance-based risks.
ERP is the solution you need
Spreadsheets and other manual or partly automated solutions can only take your inventory management so far. The better solution is to consider an enterprise resource planning (ERP) solution for best results and best return on investment.
An ERP system can help optimise your inventory management and more. An industry-specific solution is usually the best way to go, as it will have modules and capabilities purpose-built for your particular needs.
Critically, an industry-specific solution integrates all your functions, departments, processes and partners on one platform. This integration avoids needless duplication and functions as a ‘single source of truth’ for your planning needs.
The potential upside is significant. Taking control of your data will streamline inventory management. It can also provide accurate, timely and insightful data visualisations that will inform your strategy and planning for future projects and products.
We recommend Aptean Foodware 365
At Eagle360, we recommend Aptean Foodware 365. Built on Microsoft’s industry-leading Dynamics 365 ERP, its foundations are rock-solid, and it’s supported by one of the world’s leading software vendors.
Aptean is one of the world’s leading industry-specific software providers. With teams of industry experts on hand, it creates solutions that meet current needs and are adaptable to future requirements.
Our deep expertise with Dynamics 365 means we can develop and customise a solution for your business, no matter how small or large. Contact us today to learn more – we’d love to help you take control of your inventory management.