Selecting ERP for the Food Industry
There is endless discussion about the best way to choose an ERP vendor and implementation partner, such as: should you hire an independent software consultant to help you assess vendors? To help you roll out the implementation? There is just as much energy spent discussing that old chestnut – the generalized risk of ERP implementation regarding time taken, cost, ROI, etc…
All important discussions, no doubt – but is enough focus placed on the issue of choosing an ERP vendor and implementation partner who specializes – genuinely specializes – in your industry, the sub-segment of your industry in which you do business? Sounds logical, even obvious – but in point of fact, many ERP vendors serve very broad markets. Their websites may claim “we focus exclusively on process manufacturing industry” – but how “exclusive” is a focus on adhesives and sealants, paint, ink and coatings, cosmetics and personal care products, food and beverage, pharmaceutical…” as their website further describes their market. In fact, claims by software vendors that they suit company’s specific industry specific needs have become such a contentious point they’ve resulted in lawsuits – such as chemical products manufacturer Avantor Performance Materials suing IBM over an SAP-based software package being “woefully unsuited” to its business and brought ERP implementation to a “near standstill,” according to the lawsuit.
Under the Hood
To avoid such a nasty fate at your company, you need to drill deeper to find out how much – on a day-to-day level of operations in the plant and/or warehouse – the software fits food companies. Look under the hood of the ERP system and put your dipstick into specific functionality. For example:
- If you work in the meat or seafood industry, you need software that accommodates a high number of processing steps, unique issues such as catch weight, and variance in raw materials (cuts, by-products). When you sell by discrete units, such as cases, but your prices and costs are by weight of each case, inventory management and sales profitability can get complicated.
- If you are a freshpack or cannery business, or grower, you are going to need lot tracking processes that support the Product Traceability Initiative, as well as grower accounting, and production processes supporting co-products useful for repack operations and product grading.
- If you make or distribute par-bake, fresh or frozen baked goods, you have specific issues such as a potentially shorter shelf life (for fresh bakeries), recipe/batch management, as well as demand forecasting and dynamic route management in the case of DSD.
- If you are a private-label food processor, you need an ERP system that can handle frequent reformulations to bring new products to market quickly, with easy scale-ups to take the guess work out of recipe management.
- Food companies in any segment must have full traceability and recall functionality, which includes bidirectional tracking across the supply chain so that every ingredient is tracked through the processing, packaging, warehousing, transporting and shelving stages. Ever-changing food regulations must be met, so having dynamic food software means you can comply with FDA, BRC, SQF, HAACP and other standards.
One-size-fits-all process manufacturing ERP software may or may not be ideal for a food company – considering both sides should be the first step you take in your assessment of ERP vendors and implementation partners. And if you do hire a third-party software consultant to help you, he/she should be checking out food industry specific functionality, or they aren’t worth their weight in salt!
Heather Angus-Lee has a background as a trade journalist, including a long-time stint as editor of a national manufacturing magazine. She now works as a writer with JustFoodERP which provides ERP software to food processors and distributors across North America. She can be reached at firstname.lastname@example.org
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