Food and Beverage ERP Buyers' Guide
Food manufacturing and distribution companies face a set of challenges that set them apart from others in the sector.
It follows that you want an ERP that is designed to overcome these challenges. And whilst there are plenty of these out there, it is often hard to know where to start.
That’s where we come in. This guide, packed with real-world advice from experienced project managers, will help you answer the following questions:
- What features should you look for in a food and beverage ERP?
- Which food ERP vendors should you consider?
- How much does food ERP cost and how should you build a budget?
Which features should you look for in an ERP for the food and beverage industry?
The food manufacturing and distribution industries face a number of business challenges to remain viable. The most pressing of these are:
- Compliance and traceability: the food industry, like all consumables markets, is regulated by a number of industry and government bodies to ensure product safety
- Speed: food expires quickly, so inventory needs to be turned around quicker than in non-consumables markets
These needs should be reflected in the list of requirements you create before selecting a new ERP. This is just the tip of the potential ERP selection iceberg, so is worth spending some time on - use this guide to selecting process manufacturing ERP to ensure you’re doing it right.
Which compliance requirements should a food ERP help me hit?
In the USA, there are two main regulatory bodies in the food industry. These are the FDA (Food and Drug Administration) and the EPA (Environmental Protection Agency).
Key FDA compliance initiatives include:
- HACCP compliance (Hazard and Critical Control Points): manufacturers must identify what hazards might exist and establish control points best suited to capture and control those hazards
- FSMA compliance: Food Safety Modernization Act. Each facility is required to prepare and implement a food defense plan
- CGMP: Current Good Manufacturing Practices. These ensure the quality of processed foods and dietary supplements
For further detail, check out our food manufacturing compliance checklist.
Which features does food ERP need?
Alongside core ERP features like accounts and financial management, an ERP for the food industry should therefore offer an extended set of inventory management features and the ability to help your business comply with industry regulations.
Core food and beverage ERP features
- Recipe management: this is essential for standardizing units (your American supplier might sell in lb, whilst your European clients buy in kg) and for automated recipe formulation. A good recipe management module can re-calculate ingredient amounts based on what’s in your inventory, so that a shortage of flour doesn’t mean you have to wait for the next shipment.
- Lot tracking: this should be bidirectional, and be accompanied by a functionality for product recall to help meet key traceability requirements. You’ll want to respond quickly in the event of a disaster to avoid losing a chunk of business
- Inventory optimization: should include at the very least put-away rules (based on allergens, kosher or other handling/storing requirements), picking and packing, BOM by location and shop floor integration
Advanced food and beverage ERP features
- Coproduct and byproduct management: a coproduct is something left over from production that can also be sold in a different market, whilst a byproduct is something produced in the making of something else. These are common across the food and beverage manufacturing industries, so a good food and beverage ERP must help manage them.
- Catch weight: In some cases, you’ll need to convert inexact measurements (e.g chickens from a truck) to precise, measured inventory (1lb of chicken for inclusion in a frozen chicken dinner). Catch weight functionality in your ERP helps you do this
- Extended WMS functionality: expand on basic inventory optimization with a fully-featured WMS module to optimize further, reduce human error and ensure that inventory isn’t left to go off in your warehouse.
For more functionality to consider during your requirements gathering phase, check out this guide to 70 ERP features to consider for your next software purchase.
Which food ERP vendors should I consider?
There are many vendors that offer ERP for the food industry. Some of these are specifically designed for food or process manufacturing companies; others are general use ERPs that can be customized to food-specific processes.
We profile a few of the most prominent below, but you can find an extensive comparison of ERP providers that sell into the food manufacturing and distribution industries here.
ProcessPro ERP: designed for small to medium sized batch process manufacturers across a number of industries. As such, it offers a range of useful features for food manufacturing and processing, including recipe management, lot traceability, quality control and inventory management.
JustFood ERP: caters to food manufacturers and distributors of all sizes. Businesses making the first leap from QuickBooks or Excel spreadsheets will appreciate the system’s flexibility - it is available on-premise or through the cloud in three editions, which companies can move between as they grow.
DEACOM ERP: DEACOM ERP is a standalone ERP designed for companies with multi-geographic batch or process manufacturing needs, so is mainly in use across medium and large sized enterprises. It offers a comprehensive set of inventory management features, full lot control and traceability and formulation management, with 24/ support available.
Aptean Ross ERP: Aptean’s process manufacturing-specific offering used by process manufacturers of all sizes who need a flexible on-premise solution. Ross is modular, meaning that users can add functionality as and when they require it. The ‘Traceexpess’ module provides comprehensive forward and backward trace and product recall functionality.
bcFood ERP: bcFood is a food manufacturing-specific ERP designed for companies of all sizes. Built on Microsoft Dynamics NAV, bcFood expands on NAV’s comprehensive set of core ERP features to offer food manufacturers quality control features, recipe definition, advanced notifications and more.
Obviously, different food ERP vendors will suit different companies, so be sure to shop around and find one that matches your specific requirements and company culture.
How much does food ERP cost, and how should you build a budget?
It’s not easy to put an exact figure on how much a food ERP should cost you.
WorkWise estimates that the total cost of selecting and implementing an ERP could fall anywhere between $75,000 to $750,000 for a small to medium-sized business.
As a start, you can use this ERP pricing guide to gather some baseline costs for a number of ERP systems. Here are a couple of examples from vendors who provide food-specific solutions:
- ProcessPro: $3000 per user (annual subscription)
- Epicor: $645 per user (annual subscription)
- DEACOM: $7000 per user (perpetual license)
Remember: these are baseline prices only. Some vendors will charge more for more advanced features, support packages, training and implementation consultancy.
Once you’ve budgeted for the price of your food ERP system itself, you’ll need to add the following costs to your overall total:
- New hardware (particularly for on-premise solutions)
- Extra staffing requirements during implementation (including staff overtime and external temporary staff, e.g consultants)
- Staff training
- Any extra support costs agreed with your vendor