Food Engineering logo
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • TOPICS
  • EXCLUSIVES
  • MEDIA
  • FOOD MASTER
  • EVENTS
  • RESOURCES
  • EMAGAZINE
  • SIGN UP!
cart
facebook twitter linkedin youtube
  • NEWS
  • Latest Headlines
  • Manufacturing News
  • People & Industry News
  • Plant Openings
  • Recalls
  • Regulatory Watch
  • Supplier News
  • PRODUCTS
  • New Plant Products
  • New Retail Products
  • TOPICS
  • Alternative Protein
  • Automation
  • Cannabis
  • Cleaning | Sanitation
  • Fabulous Food Plants
  • Food Safety
  • Maintenance Strategies
  • OEE
  • Packaging
  • Sustainability
  • More
  • EXCLUSIVES
  • Plant Construction Survey
  • Plant of the Year
  • Sustainable Plant of the Year
  • State of Food Manufacturing
  • Top 100 Food & Beverage Companies
  • MEDIA
  • Podcasts
  • Videos
  • Webinars
  • White Papers
  • EVENTS
  • Food Automation & Manufacturing Symposium and Expo
  • Industry Events
  • RESOURCES
  • eNewsletter
  • Custom Content & Marketing Services
  • FE Store
  • Government Links
  • Industry Associations
  • Market Research
  • Classified Ads
  • EMAGAZINE
  • eMagazine
  • Archive Issue
  • Advertise
Food Engineering logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Food Engineering logo
  • NEWS
    • Latest Headlines
    • Manufacturing News
    • People & Industry News
    • Plant Openings
    • Recalls
    • Regulatory Watch
    • Supplier News
  • PRODUCTS
    • New Plant Products
    • New Retail Products
  • TOPICS
    • Alternative Protein
    • Automation
    • Cannabis
    • Cleaning | Sanitation
    • Fabulous Food Plants
    • Food Safety
    • Maintenance Strategies
    • OEE
    • Packaging
    • Sustainability
    • More
  • EXCLUSIVES
    • Plant Construction Survey
    • Plant of the Year
    • Sustainable Plant of the Year
    • State of Food Manufacturing
    • Top 100 Food & Beverage Companies
  • MEDIA
    • Podcasts
    • Videos
    • Webinars
    • White Papers
  • FOOD MASTER
  • EVENTS
    • Food Automation & Manufacturing Symposium and Expo
    • Industry Events
  • RESOURCES
    • eNewsletter
    • Custom Content & Marketing Services
    • FE Store
    • Government Links
    • Industry Associations
    • Market Research
    • Classified Ads
  • EMAGAZINE
    • eMagazine
    • Archive Issue
    • Advertise
  • SIGN UP!

Managing Software: Identify options if fatal flaws develop in ERP software

March 27, 2003
Niche software may be able address ERP fatal flaws in back office functions relating to pricing, trade promotion, and trade receivables.



After food companies start to implement an Enterprise Resource Planning (ERP) system, they may discover that the software doesn’t provide all of the functionality their business requires. These shortfalls can be characterized as “fatal flaws.” If a company uncovers a fatal flaw in their ERP software, they have three choices: keep their paper-based/labor-intensive system, develop in-house software, or look for niche software to “bolt on” to their ERP. One area where niche software may address ERP fatal flaws is in the back office functions relating to pricing, trade promotion, and trade receivables.

In the food industry, pricing is a complex set of business processes that often go beyond the scope of normal ERP functionality. Generally, food manufacturers have a national invoice price for each SKU. The net that is ultimately received for a product is reduced from the national invoice price and involves three factors: “invoice deviations” which are list price concessions that appear on the invoice; “after-invoice deviations” which are rebates set up as invoices from distributors, retailers, or foodservice end users for promotional programs tied to product sales; and “trade promotion payments” tied to direct marketing expenses like retail slotting allowances.

All reductions in the net price have to be planned, approved, and tracked to determine their impact on sales. After-invoice deviations and trade promotion commitments must also be accrued as liabilities to ensure that they are reflected in financial reporting. The issue of “deduction management” comes up because the back office process actually involves two payment streams – one from the customer to the manufacturer for product sales and the other from the manufacturer to the customer for promotional activities. Often, the customer deducts their claim for promotional activities directly from the manufacturer’s product sales invoice.

For Harold Rosemann, CFO of Cookietree Bakeries in Salt Lake City, UT, tracking promotion planning to sales results is a critical issue. Rosemann told Food Engineering he needs to know how his promotional spending is impacting his sales results, but he also needs to keep ahead of short paid invoices. For requirements like this, software vendors must have both promotional planning and deduction management functionality. It is this combination of functional depth that is often difficult to find outside of niche vendors.

Software solutions

Software vendors are attacking the back office issues in different fashions. As expected, niche software solutions are more focused on industry and segment-specific issues. General ERP vendors all provide pricing management functionality but may not address industry specific issues. Process industry ERP vendors have more experience with specific industry issues and may include more detailed functionality by industry, but may have specific strengths in particular market segments where they have existing clients.

Niche vendors utilize industry-specific functionality to compete with global vendors. Alex Ring, president of the Synectics Group in Orefield, Pennsylvania, a provider of trade promotion management (TPM) software observes that, “Generic software does not meet the unique needs of the food industry. Food is different than hardware, and within food, retail and foodservice are different.”

Jim Stromvig, information services manager at NORPAC, a Salem, Oregon, frozen food manufacturer, has found that niche software vendors can provide “functionality that is an improvement over the paper processes, but most will require you to make some modification to your existing business practices.”

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Global Organic Food & Beverage Market to Grow

    Global Organic Food & Beverage Market to Grow

    With a CAGR of 12.07%, Bonafide Research estimates this...
    People & Industry News
  • skilled MEP worker

    Predicting Food and Beverage Manufacturing Trends for 2024

    The two words that should be kept in mind are labor and...
    Automation
    By: Derrick Teal
  • cleaning and sanitation

    The basics of cleaning and sanitation in food plants

    Sanitation maintains or restores a state of cleanliness...
    Cleaning | Sanitation
    By: Richard F. Stier
Manage My Account
  • eMagazine
  • eNewsletter
  • Online Registration
  • Manage My Preferences
  • Customer Service

Food Plant Openings and Expansions June 2025

Food Plant Openings and Expansions June 2025

Celebrating Women in Engineering: Shalima Sreenath

Celebrating Women in Engineering: Shalima Sreenath

Celebrating Women in Engineering: Samara Heaggans

Celebrating Women in Engineering: Samara Heaggans

Food Plant Openings and Expansions May 2025

Food Plant Openings and Expansions May 2025

More Videos

Popular Stories

Cargill Cocoa Plant

Cargill Invests in its Cocoa Supply Chain

Chicken Alfredo Listeria Products

Listeria Outbreak Connected with Pre-Made Chicken Alfredo Meals Results in 3 Deaths

mechanical and chemical recycling

Clean Label Packaging Expands to Include Sustainability Considerations

CHECK OUT OUR NEW ESSENTIAL TOPICS

Alternative ProteinAutomationCleaning/SanitationFabulous Food Plants

Food SafetyMaintenance StrategiesOEE

PackagingSustainability

Events

June 17, 2025

Refrigerated & Frozen Foods’ State of the Cold Chain

On Demand Kelley Rodriguez, Editor in Chief of Refrigerated & Frozen Foods, will be joined in this 60-minute webinar by industry experts to help unpack the latest research.

July 10, 2025

Smarter Innovation With AI: How the F&B Industry Can Stay Agile

Join our webinar to explore how practical AI solutions are helping leading brands reduce compliance risks, streamline reformulation and accelerate time-to-market.

View All Submit An Event

Products

Recent Advances in Ready-to-Eat Food Technology

Recent Advances in Ready-to-Eat Food Technology

See More Products

Plant of the Year

Related Articles

  • Managing Software: The fatal flaws of software

    See More
  • Managing Software: Integrating Maintenance into plant ERP software

    See More
  • Managing Software:
    Sizing up your options

    See More

Related Products

See More Products
  • GlobalData_logo_blue_header.png

    Country Profile: Syrups & Spreads in the US

  • GlobalData_logo_blue_header.png

    Cooked Meats - Packaged (Meat) Market in United States of America...

See More Products
×

Elevate your expertise in food engineering with unparalleled insights and connections.

Get the latest industry updates tailored your way.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Food Master
    • Store
    • Want More
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing

Food Engineering logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Food Engineering logo
  • NEWS
    • Latest Headlines
    • Manufacturing News
    • People & Industry News
    • Plant Openings
    • Recalls
    • Regulatory Watch
    • Supplier News
  • PRODUCTS
    • New Plant Products
    • New Retail Products
  • TOPICS
    • Alternative Protein
    • Automation
    • Cannabis
    • Cleaning | Sanitation
    • Fabulous Food Plants
    • Food Safety
    • Maintenance Strategies
    • OEE
    • Packaging
    • Sustainability
    • More
  • EXCLUSIVES
    • Plant Construction Survey
    • Plant of the Year
    • Sustainable Plant of the Year
    • State of Food Manufacturing
    • Top 100 Food & Beverage Companies
  • MEDIA
    • Podcasts
    • Videos
    • Webinars
    • White Papers
  • FOOD MASTER
  • EVENTS
    • Food Automation & Manufacturing Symposium and Expo
    • Industry Events
  • RESOURCES
    • eNewsletter
    • Custom Content & Marketing Services
    • FE Store
    • Government Links
    • Industry Associations
    • Market Research
    • Classified Ads
  • EMAGAZINE
    • eMagazine
    • Archive Issue
    • Advertise
  • SIGN UP!