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Over the past few weeks, we have looked at ways to reduce waste in the food manufacturing industry by using technology to improve warehousing and manufacturing practices. Another tool you can use to reduce waste is business intelligence connected with an enterprise resource planning (ERP) system like Sage EM (formerly known as Sage X3). Overstocking is a Primary Source of Food Waste Increasing manufacturing automation and improving traceability are certainly key components in reducing waste; however, a large portion of food waste results from overstocking which comes when companies are unable to sell their finished products. Of course, the danger of lowering stock levels is to run into stock-outs which will also reduce profitability. Business Intelligence Tools Optimize Inventory Success in the food manufacturing industry is tied to the ability to accurately forecast consumer demand. Because supply and demand can fluctuate dramatically, it can be a challenge to maintain the right stock levels.  Business intelligence tools are critical components to your systems because they can help take the guesswork out of when to buy and how much to stock. Even small improvements in the problems below can make a big impact on your profitability. Excess inventory Stock-outs Inaccurate counts Warehouse inefficiency […]

The food manufacturing industry is highly competitive. With low margins and fluctuating demand, food manufacturers need to use every means to maximize efficiency. That is why food waste is an important matter; small amounts can accumulate into big costs. Reducing food waste will lead to decreased costs and increased profitability. Reduce Waste Using Process Automation One way to eliminate food waste is to be focused on operational excellence on the manufacturing floor. (See last week’s blog to learn about reducing food waste in the warehouse.) Putting the following practices in place will improve manufacturing success and reduce waste. Automate your production lines using intelligent equipment and improve recipe management. Apply lean manufacturing practices to eliminate wasted steps in the manufacturing process. Continuously innovate to improve processing equipment and material handling. Track ingredients and products throughout the manufacturing process. Collect process data to meet regulatory compliance and make improvements. Knowledge is the First Step to Maximizing Efficiency Awareness of where food waste occurs is critical to knowing where to focus innovation. Having a thorough understanding of where food waste occurs makes it possible to maximize efficiency. That knowledge comes from having the right technology in place to gather and analyze data. […]

One of the biggest challenges a food manufacturer can face is managing inventory. Excess inventory is an issue for any manufacturer, but for the food manufacturing industry, the repercussions are even greater. With inventory that has a shelf life and expiration dates, effective inventory management is mission critical. Last week, we looked at the high cost of waste in the food manufacturing industry and how having technology with tracking capabilities can reduce that cost. (See The High Cost of Waste in the Food Manufacturing Industry.) This week, we will look at how better warehouse management can reduce food expiration and spoilage as well as eliminate cross-contamination—two sources of food waste. Reduce Food Expiration and Spoilage Poor inventory management in the food manufacturing industry directly leads to food expiration and spoilage.  Although technology and improved processes can help reduce food expiration and spoilage by speeding up the production process, the real issue is in distribution and the inability to move products down the supply chain at an appropriate rate. A robust ERP solution can support efforts to manage your inventory by tracking lots and shelf life so that products can be pushed out before they expire. Eliminate Cross-Contamination Contamination of food […]

Food waste isn’t just a global problem; it impacts profitability in the food manufacturing industry. Food waste is an indicator that there are inefficiencies in manufacturing processes, contributing to high overhead and lower profits. Momentum is building to address the global food waste problem. Non-profit organizations, regulators, and consumers are making waste an urgent issue due to their concerns about sustainability and world hunger. According to the Food and Agriculture Organization (FAO) of the United Nations, 30% of the food we grow is never eaten. While the majority of waste occurs at the consumption level, over 4 billion pounds of food are wasted in the manufacture and distribution of food. Reducing Food Manufacturing Waste Increases Profitability Generally, food manufacturing companies accept a certain amount of waste as a part of the cost of doing business and include it as overhead. Estimates say that industry-wide disposal costs are more than $100mm. Food companies could increase their profits by as much as 10% simply by reducing food waste. In a market where companies face high volume and thin margins, reducing waste can make a major impact on profitability. Traceability is at the Core of Eliminating Food Waste Within the food manufacturing industry, […]