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5 Hidden Costs that Food and Beverage Software Solutions Can Help Mitigate
5 Hidden Costs that Food and Beverage Software Solutions Can Help Mitigate
25 May 2023John McCurdy
Much has been made of the rising cost of doing business in the food and beverage markets, with manufacturers, distributors and consumers alike feeling the effects. The combination of inflation, supply chain disruptions and shortages of both skilled labor as well as certain raw materials has created a “perfect storm” that companies like yours must weather successfully to remain competitive.
The findings in IDC’s Global Food and Beverage Industry Trends and Strategic Insights 2022 whitepaper, commissioned by Aptean, confirmed that these concerns are top-of-mind for industry decision-makers. Among the five trends predicted to have the greatest impact over the next five years, higher operating costs took the top spot and the pressure to cut costs and lower prices ranked fourth.
We recently shared our list of cost-saving tactics for food and beverage companies, but that post focused on the more obvious and easily measurable expenses and how purpose-built software can help reduce them. Here we’ll go deeper and explore the “hidden” costs that your organization may be incurring and how industry-specific solutions can help mitigate them.
We’ll primarily be covering the capabilities of two different systems along the way—enterprise resource planning (ERP) and enterprise asset management (EAM) platforms. We’ll also highlight how Aptean’s products are uniquely well-suited to the complex challenges you’re facing and how our approach as a provider sets us apart.
1. Low-Volume Orders
Purchasing raw materials in small amounts on an as-needed basis can lead to spending less on individual transactions, but in reality this approach means you’re forgoing the potential savings on both per-unit prices and shipping that can be unlocked by procuring supplies in bulk. That, in the long run, can increase your costs.
Food and beverage ERP solutions include forecasting features that help you take advantage of bulk purchases by generating reliable predictions of your needs in advance so you can order larger quantities at discounted rates with confidence that they won’t go to waste.
Along the same lines, the production planning features of food and beverage software inform more precise alignment of supply with demand, allowing for the side-by-side comparison of available stock with orders to calculate requirements and identify situations where bulk ordering can be advantageous.
Meanwhile, food ERP’s expiration management capabilities help to ensure that you can make the most of the ingredients you buy in bulk before they spoil by automatically deploying alerts when viability windows are closing. Aptean Food & Beverage ERP’s vendor item catalog also makes placing recurring bulk orders simpler and less prone to error.
2. Employee Recruitment
Various factors—including negative perceptions of manufacturing jobs, difficulty retaining talent and a shallow labor pool—have together put an onus on food and beverage organizations to recruit new workers. But that can be expensive, sometimes prohibitively so, and adding more talent doesn’t actually alleviate the problems at the root of this trend.
That’s why it’s imperative that you get more out of the staff you do have by helping them be more efficient through the use of automation. Food and beverage ERP systems offer several features on that front, such as automatic digital data capture through integrations with handheld devices that can be used in warehousing activities to streamline tasks and free up time for more mission-critical responsibilities.
Production scheduling features of industry-specific food ERP software can also automatically add manufacturing runs according to the orders you need to fulfill, which spares your factory floor managers from having to do that manually.
Aptean Food & Beverage ERP also offers a robust advanced workflow engine, which can automate handoffs between teams and help you identify bottlenecks in your processes that can be rectified, thereby boosting efficiency.
3. Unplanned Downtime
While it’s inevitable that your production lines will be idle occasionally, unexpected stoppages that result from equipment breakdowns and emergency repairs represent wasted time and lost productivity. Your business needs to get the most from your equipment—especially if rising costs are eating into your margins—and that’s where EAM software comes in.
These solutions facilitate the creation and implementation of a preventive maintenance program to keep your machinery functioning efficiently and reduce the chances of a sudden malfunction bringing manufacturing to a halt. This approach also preserves the longevity of your assets and can lower their total cost of ownership.
Meanwhile, EAM’s work order management features make your technicians’ jobs easier by providing them with the information they need while also balancing responsibilities among team members for greater assuredness that all necessary tune-ups and repairs are attended to.
What’s more, the analytics and reporting capabilities of Aptean’s EAM keep you in-the-know regarding equipment operation by tracking hundreds of different key performance indicators (KPIs) and presenting them via intuitive dashboards.
4. Dated Legacy Technology
Early on in its existence, a food and beverage company may be able to get by with generic, “one-size-fits-all” software or home-brewed solutions, but as a business grows, those systems will show their flaws and potentially limit success. They can require expensive add-ons and customizations to suit the needs of your sector, and when you’re using several systems that aren’t integrated with one another, critical data can end up caught in a silo.
That’s why you need the unified, organization-wide database that an ERP can provide. By acting as a “single source of truth” for all departments, it can facilitate faster, more informed decision-making and reduce the chance of errors.
Food and beverage-specific capabilities are also crucial. In fact, the research referenced above finding that companies with specialized food and beverage solutions can drive revenue by as much as 2.5% more compared to standard options. Aptean Food & Beverage ERP really shines on this front, with features to serve the full spectrum of sub-verticals.
What’s more, our software offers all of that unique, industry-specific functionality on the Microsoft Dynamics 365 Business Central platform, which affords the interface a familiar and user-friendly feel. Better still, Aptean Food & Beverage ERP can be integrated with a number of our other offerings, including Aptean EAM, Aptean Electronic Data Interchange (EDI), Aptean Routing & Scheduling, Aptean Pay and more.
5. On-Premise IT Management
Every business these days needs one or more qualified IT professionals in-house, but hiring a whole team of your own and tasking them with both maintaining your on-premise hardware as well as your software systems isn’t always an option considering how expensive that can be. And considering that outages affecting critical components of your tech stack tend to be regarded as emergencies, you’ll be paying overtime wages more frequently if you try to handle matters in-house.
For those reasons, cloud implementations on the Software as a Service (SaaS) model have become quite popular as a means of both keeping internal IT costs in check and achieving greater technological stability. With remote hosting and redundant backup servers, these setups provide better reliability and also facilitate scaling your operations and updating as new features and versions are rolled out.
Deploying your food and beverage solutions from the cloud has even more benefits, including stronger cybersecurity, enhanced flexibility, facilitated integrations and broader accessibility since all that’s required to log in is a Wi-Fi connection and internet browser. Our food ERP and EAM systems are both cloud-based, as are several others in our complete cloud software ecosystem.
Want to learn more about this topic? Take a look at the key differences between on-prem and cloud ERP deployments or explore these four compelling reasons to move your food and beverage ERP to the cloud.
Get the Edge with Solutions from Aptean
Your company faces a challenge with rising costs of doing business dragging down your profitability, but this post hopefully has showed you that the application of purpose-built technology—particularly in the form of ERP, EAM and other systems—can help you mitigate the increases and drive holistic improvement. If you’re ready to start your digital transformation journey, there are some great reasons to consider us as your provider.
To begin, there’s our team’s considerable industry expertise developed over decades of collective hands-on experience with food and beverage businesses. Our staff know the ins and outs of the space and can help identify best practices to employ for better results while also navigating the complexities of the many niches in the larger food and beverage world.
Next, consider our collaborative approach to implementation, helping to sketch out a project roadmap with observable milestones and rolling out additional features as necessary. Aptean is dedicated to helping all of our customers succeed, and we pride ourselves on the level of service we provide—not to mention the strength of our solutions.
Speaking of, there’s one last point to make with regards to the quality of Aptean’s products. Recently, The Software Report ranked us at the 30th overall spot in its Power 500 Software Companies of 2023, which is a testament to the performance of our offerings as well as our organizational commitment to the industry.
Now, if you want to learn more about Aptean’s food and beverage software and how it can help your organization mitigate the hidden costs of doing business, contact us today. You can also request a personalized demo.