Post COVID-19 Pandemic, there has been a significant change in the consumer behavior related to their food habits and buying preferences. The consumer demand is increasing day by day for good quality food, new and different formulations & recipes. It is expected that Indian annual household consumption will be tripled by 2030, which will make India the fifth largest consumer in the world.

In this growing economy, the food manufacturers have great possibilities of expanding and achieving success. Today, the trend in consumer demand is frequently changing to new recipes, as people now-a-days look for something good and innovative, which will not only provide them good taste but also good health.

Challenges faced by food manufacturers to meet the demand: 

The food manufacturing industry is overly cluttered with many competitors, vastly differentiated products and the ever changing consumer demand, which act as critical hurdles for manufacturers in achieving their business profitability. 

It is becoming challenging for the manufacturers to keep up with all the requirements and keep long lasting relationships with consumers. Let’s see some major challenges faced by the manufacturing industry to timely meet the demand of consumers:

Understanding and meeting the demand:

Manufacturers often find it difficult to understand the changing demand trend of the consumers at the right time and fulfill the requirements with retailers. Not solving the demand at time may cost the company in terms of consumer’s changing their brand preference to the products which are timely available at the store shelves.

Regulations and food quality:

Ensuring the food quality and meeting the compliance regulations is of utmost importance for food manufacturers. From procuring raw material to manufacturing, distribution and maintaining the quality of food till retail shelves is an important task which has chances of lacking in manual operations. Hence a quality control system is required to keep a check on goods throughout the process.

Need for product development:

Consumer preferences are ever changing and to keep up with the market trends, companies are required to develop their products with the latest recipes or research and come up with new ones. Many manufacturers find it tough to manage food data and research about new recipes.

Controlling costs:

Controlling cost and minimizing waste is important for every industry. With so many things to handle, manufacturers find it grinding to fully optimize their resources. Hence many manufacturers are not able to retain continuous profits for their organizations.

Visibility in inventory and supply chain:

One of the biggest challenges of this industry is the limited shelf life of the ingredients. Storing goods in inventory for long can be daunting when an ERP system is not in use. The duration of perishability is important in this aspect as proper production and supply chain planning is needed to safely send the product to consumers. Balancing stocks to deal with the overstocking and understocking of goods is also a challenge which can be adequately handled with an ERP system.

Hence a business management tool like ERP Software is mandatory for managing the business efficiently. It can be used to productively manage all the operations of the business like manufacturing, supply chain, inventory and product life cycle.

An ERP system can help companies to recover from all the above challenges by providing a robust solution, it helps with below mentioned features:

BI tools and Advanced Reporting:

ERP solution is equipped with business intelligence tools and analytical reporting features. It helps with analyzing the data and predicting the future trends based on the past reports. 

Production reporting & analytics feature enable manufacturers to measure performance in production efficiency, resource utilization, delivery accuracy, and customer satisfaction. Hence effective business decisions can be made at the right time by demand forecasting.

Recipe management:

With ERP, one gets a proper recipe management tool. It helps to create, store and scale recipes. It is a part to be precisely taken care of as it deals with proper quantities and measurements in particular units. On the basis of the past data, it becomes easier to manage and create new recipes and formulations.

Financial Management:

ERP helps to control the overall finances of the organization. It provides a special AP and AR automation feature, which keeps the track of all the payments and gives real time updates of the same. It eliminates paper invoices, automates data entry and enables electronic payments.

Inventory and supply chain management:

ERP gives real time updates related to inventory and goods in supply. Management can have real time insight into the inventory and see which goods are overstocked and which are understock, hence timely demand can be met. Further its advanced features help to anticipate demand, avoid stock wastage, reduce surplus, have a real-time view of the inventory levels which leads to increased sales.

Quality Control:

The quality control module enables the organization to track quality-related data throughout manufacturing, producing higher-quality products while reducing production time and costs. With set targets and methods employees already know which procedure to follow and how. Quality control is also essential to meet customer requirements and legal standards.

BOM Planning:

Bill of Materials (BOM) planning is the critical feature that allows tracking and managing the raw materials, components, and sub-assemblies used in the production process. It allows users to create and manage a list of all the resources used in the manufacturing process, including their quantity, cost, and supplier details. This information is important for ensuring that materials are always in stock and that you have an accurate picture of the costs associated with production. Raw material shortages and uncertainty of Data can be avoided.  

Integration and collaboration:

ERP system provides an integrated platform which can be used by different users present at different locations. It can be easily integrated to other platforms for a smooth consolidated work. It updates the data in real time across all the departments and thus leads to better collaboration between departments which are operating at far locations and also saves time.

With the help of ERP, companies can address all the challenges like quality control, perishability, space management, meeting compliance regulations, controlling cost, managing inventory & supply chain leading to increased efficiency and productivity. Thus to meet timely demand of the market and keep up with the production trends, a company should employ an efficient ERP system that has features of analytic reporting, real time updates and provides customized solutions according to the needs of the company.

Author Bio:-

Deepali Daiya is a communication expert who excels in understanding customer needs. She writes powerful sales scripts and articles with very high conversion rates. Currently, she is associated with Sage Software Solutions, a leading distributor of high-quality ERP system and CRM systems to small and mid-sized businesses in India.
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