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Why Food Companies Face ERP Functionality Problems
By Thomas R. Cutler, President & CEO, TR Cutler, Inc.
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The plant floor automation issues unique to the food manufacturing sector are significant. Finding an ERP (Enterprise Resource Planning) system, which addresses the idiosyncratic nature of food manufacturing, is not easily accomplished. Despite claims, promises, and elements for success, few ERP vendors are comprehensive in providing the full spectrum of needed functionality.
The plant floor automation issues include the following:
- Online tracking of engineering change orders with electronic routings for approvals.
- System generated BOMs and routings for configured products.
- System generated production schedules from MRP module.
- Automatic yielding for finished goods and BOM components/ingredients.
- Where used and mass replace capabilities.
- System generated work orders for make to order environments.
- Fully attributed inventory from order entry through production and shipping.
- Online order promising by exploding the multi-level BOM, reviewing BOM stocking levels, and production space.
- Online messaging for production managers on plant floor exceptions.
- Integrated dashboards for management's KPIs.
Finding a balance between industry sector nuance and a solid core ERP system is tricky. The basic ERP functions are often lacking when the focus is too heavy on the bells and whistles. Rebecca Gill, Vice-President of Toledo-based TGI, Ltd., and Enterprise 21 Food ERP, says, "Many vertical ERP applications in the food sector lack strong financials and must integrate with bolt-on third party systems." The ERP functionality should also include complete multi-company, multi-currency, and financial reporting capacity.
Maximizing Lean Efficiencies in Food Manufacturing
Specific and unique tools to affect maximum lean efficiencies for Operation Managers should include:
- Fully EDI enabled which offers automatic order entry, acknowledgements, ASN submittal, invoicing, purchase order transmittal, vendor acknowledgements
- Automatic check input and matching for bank deposits
- System generated forecasts based on sales history
- Online system (MRP/DRP) generated requisitions with purchase order creation and submission
- Online messaging with exception reporting
- Fully barcode enabled system
- Directed putaway, pick, and restocking locations in warehouse
- Various picking methodologies for complete optimization of the warehouse
- Centralized purchasing and payment for multiple facilities, divisions, or companies
- Fully integrated e-commerce
- Integrated to Microsoft Outlook
- Fully integrated CRM
Many companies within the food and beverage industry struggle due to lack of system integration and poor visibility of major business functions. Food quality managers do not want to simply manage their business; they want to lead and direct the future of their company. Today's food management executives need real-time sophisticated tools to make educated decisions.
Whether viewing inventory levels or reviewing production capacity, food ERP software must allow CEOs, Plant Managers, Quality Managers, Production Managers, and Food Technologists to gain this information quickly. Advanced decision support systems and business planning models using linear programming can take the average executive's day to the next level by placing all relevant business data at their fingertips and within their reach whenever they need it.
Thomas R. Cutler is President and CEO of TR Cutler, Inc., one of the largest manufacturing marketing firms worldwide. Founder of the Manufacturing Media Consortium consisting of 2700 journalists and editors, Thomas is also the lead spokesperson for the ETO Institute and the author of "Manufacturer's Public Relations and Media Guide". He is a frequently published author within the manufacturing sector with more than 300 feature articles authored annually. For article feedback, contact Thomas at trcutler@trcutlerinc.com
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