A United Kingdom (UK) based bakery manufacturing company receives a huge order of a croissants for a wedding occasion. Initially, everything was going smoothly, the production was in full swing, but in the midway, they run out of fresh flour. Result: Production on halt.
Now, the manufacturers will have to wait until fresh flour supplies arrive from the supplier. Also, this disruption will not only interrupt the entire workflow but will lead to increase in unnecessary costs. The flour merchant may also charge a premium on restocking the material on urgent basis and there is also no guarantee that supplies will arrive on time to resume production because they may need extra time to prepare and dispatch the order, further compounding delays and increasing the risk of missed deadlines.
If the manufacturers had tracked the materials earlier and accurately predicted how much was needed, they could have ensured the required supplies were available in advance, avoiding such situations. This approach would have also kept production running smoothly and prevented unnecessary delays. Here, the manufacturers would have enjoyed streamlined operations, on-time deliveries, and satisfied customers, without the added burden of unexpected costs or wasted resources.
This is a common scene for manufacturers who fail to track their inventory. Inventory tracking, by definition, means monitoring raw materials and finished goods throughout the supply chain, ensuring the right stock levels to meet customer demand and timely production. Inventory management software for food industry is super important due to the perishability of products. Tracking inventory helps:
Proper inventory tracking helps maintain the right stock levels to avoid running out of essential items.
Reduce Waste:By monitoring perishability dates. expiry dates and shelf life, inventory tracking ensures materials are used before they spoil.
Control Costs:Tracking inventory helps maintain optimal stock levels, avoiding over-ordering, surplus inventory, excessive storage costs, and urgent restocking fees.
Ensure Quality:Proper inventory methods like FIFO (First in First Out) or FEFO (First Expired First Out) ensure that ingredients are used in the right order.
Improve Efficiency:Real-time inventory insights help streamline supply chain management, align production schedules, reduce downtime, and optimize workflow efficiency.
Enhance Customer Satisfaction:Proper inventory methods like FIFO (First in First Out) or FEFO (First Expired First Out) ensure that ingredients are used in the right order.
Gain Real-Time Visibility:Inventory tracking provides visibility of each product throughout lifecycle, from the moment it enters the warehouse to when it leaves in order to monitor stock levels and location at all times.
Avoid Shortages:With accurate inventory counts, manufacturers can identify when stock is running low and reorder in time, avoiding stock outs and ensuring sales never get missed.
Predict Better:Analyzing inventory data helps predict future demand – be it seasonal or change in customer preference, allowing businesses make informed procurement decisions.
Multiple Location Tracking:For businesses with multiple warehouses, inventory tracking systems help consolidate data on one platform, reducing complexity and ensuring accurate stock levels across all locations.
Faster Error Detection:Continuous inventory monitoring helps quickly identify discrepancies or issues such as misplaced items, allowing for quick corrective action before they impact operations.
But, with numerous product types and range, tracking inventory can be challenging. Managing raw materials, WIP, semi-finished goods, and finished products requires a systematic approach to avoid errors. Here are some of the methods through which food and drink manufacturers can track inventory:
The manual method involves tracking inventory using spreadsheets or physical logs, where products are recorded with details like quantity, expiry dates, and price. Sales are logged by subtracting sold items from stock.
Automated inventory tracking improves accuracy, eliminates manual errors, and boosts efficiency. Implemented alongside Food and Drink ERP software, automated methods like barcode scanning and RFID enhance inventory management.
The UPC/Barcode System assigns a unique barcode to each product, allowing businesses to track inventory in real time using handheld scanners at the point of sale or during stock checks. RFID Technology, on the other hand, uses tags that are wirelessly read by RFID readers, enabling contactless scanning of multiple items at once for efficient and error-free tracking. Lastly, the Tag System involves tagging products at regular intervals, which are removed at the point of sale and compared to physical stock to determine sales. Inventory tracking, whether manual or automated, is essential for food and drink manufacturing businesses. However, automating the process is crucial, and transitioning from manual methods to an automated system is seamless with the right ERP solution. One such Manufacturing ERP Software in UK is BatchMaster ERP. If you're looking to automate your inventory tracking for your food manufacturing business, get in touch with us at sales@batchmaster.co.in.