To all our fellow Australian Food manufacturers,
You’d never want your consumers to eat a food product that tastes bad, or you would never want a bad taste product to enter the market.
Quite the obvious reason, first, it won’t satisfy the taste buds of the consumer. Second, it will tarnish your brand’s reputation, and third, it can put you in soup.
Alas! Leaving a bad taste is dangerous.
Not just on tongue, but in supply chain too. Now that you’re imagining situations like these, we recommend that you read the entire blog to learn the quick fix for managing your food supply chain operations smoothly and leaving the unpleasant taste of complexity behind.
The Current Scenario for Australian Food Manufacturers
This Food & Grocery Manufacturing 2023 report, produced by the Australian Food and Grocery Council with economic analysis conducted by leading economist Warren Hogan of EQ Economics, identifies major opportunities and vulnerabilities for the sector. The report finds that:
- Australia’s food and grocery manufacturing sector is under pressure from declining profitability due to a highly concentrated retail marketplace, resulting in a decade of stagnant capital investment and low innovation
- food and grocery manufacturing risks losing ground to imports unless steps are taken to boost investment in new technology
- non-food grocery, which includes vitamins and household products, should be included as a manufacturing priority alongside food and beverage under the federal government’s Modern Manufacturing Strategy
- the right policies and incentives can double the size of Australia’s food and grocery sector to $250 billion by 2030, with a resulting 54 per cent increase in employment to 427,000 people.
Source: https://www.afgc.org.au/industry-resources/sustaining-australia-food-and-grocery-manufacturing-2030
General overview
The customers of today demands both local staple as well as innovative exotic food and they expect the product from either category to be always of superior quality, affordable, and with high nutritive value.
And so, in response to this ever-growing demand, the ‘farm to fork’ food supply chain has grown and now involves many types of organizations, that are involved in producing food (eg farms) and others less directly (eg food processing equipment manufacturers), and they all can influence the success or failure of supplying safe, wholesome food to consumers.
Moreover, overstocking has long been a concern for sellers of perishable products because it could lead to inventory wastage. They often worry about understocking too because it could result in missed sales opportunities.
In summary, businesses suffer when sales orders aren’t fulfilled or when they’re forced to hold excess inventory because nothing is moving.
With such so many variables, ensuring effective supply chain management becomes – A challenging process.
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More challenges that are in Australian food manufacturer’s kitty
The food industry is mutilated by a number of unique challenges, apart from the changing consumer demands. These include the perishability of raw materials, volatile commodity pricing, and certain external factors that contribute to the reduction in consumer demand and disruption of supply chains.
Through this blog post, let’s take a look at the challenges the food manufacturers face to meet demand, the need for precise demand forecasting, and how food ERP software can help with demand forecasting and fulfillment. Read on:
1. Improper production planning: This is the stage where the majority of food producers stumble.
They are more likely to fall short of the production target and, as a result, fail to satisfy consumer demand if the manufacturing production process is inefficient or unplanned.
There are a lot of factors that require careful consideration before manufacturing operations go underway. The production capacity and priorities must be determined by the food manufacturers.
They also need to get the routing correct, which involves choosing the materials, tools, and machinery that will be used in the production as well as the order in which they should be used.
Planning this process accurately from start to finish proves to be a major challenge for food manufacturers.
2. Inadequate inventory levels: Lack of inventory is yet another issue that food producers must deal with in order to meet consumer demand.
They must have enough inventory on hand to fill the orders. And in order to do so, they should know how much inventory they require, when they require it, and from where they can get it.
They also need to have suitable safeguards in place to ensure that the stock they have is stored correctly and used before the expiry dates. Insufficient inventory is the result of inaccurate forecasting and the inability to maintain the safety and quality of the raw materials, which makes it extremely difficult for food makers to meet consumer demand.
3. Disrupted supply chain cycle: Some situations and events of unpredictable nature are beyond the control of food manufacturers, like the COVID-19 pandemic.
It has disrupted global supply networks to an unprecedented degree.
While it is extremely difficult to predict the ‘once-in-a-century event’ of the pandemic, predicting the unexpected strike of workers in the transportation sector is not easy either.
All of these occurrences have the potential to disrupt supply chains and prevent businesses from satisfying client demand.
4. The impact of seasonal demand: During certain times of the year, businesses that produce food experience repetitive or predictable market demands.
These patterns can occur over the course of days, weeks, months, or quarters, making it challenging for businesses to predict future demand trends.
While some companies run out of stock during their peak season of business and miss out on sales opportunities, others are compelled to liquidate their excess inventory during end-of-season promotions. The food industry faces significant difficulty in identifying and managing these cyclical demands.
5. Sudden ups and downs in trends: A number of external factors can suddenly increase demand for a specific good or reduce it for one that the producer is stockpiling.
For instance, a social media food post or a rapid shift in style could cause the demand for a certain product to rise or fall.
The food industry faces a significant challenge in being set up and prepared to fulfill this new customer demand.
The solution to all these challenges can be an ERP for food manufacturing.
It is an essential solution for food makers since it is specifically designed to address every need of the company while taking into account the complexities and regulations of the food production industry.
BatchMaster ERP: A food manufacturing software not only makes routine manufacturing operations easier for a food manufacturer, but also offers a systematic, streamlined method for managing the entire supply chain operations, from sourcing the food items to managing them, producing batches, examining the quality, packaging them, and finally dispatching them until they reach the end user.
Features of BatchMaster Food Manufacturing ERP Software:
An ERP for food manufacturing has various features that help manufacturers never experience a bad taste of complexity in their supply chain:
The benefits of BatchMaster ERP for Food Manufacturing are as below:
Ending Note
An efficient food ERP software can deal with a lot of challenges the food manufacturing with more than 30 years of service legacy! If you have any queries regarding ERP for food manufacturing in Australia, please feel free to contact us.
