Food and beverage manufacturers are no stranger to operating in complex environments. Today’s environment calls for constant adaptation, as volatile ingredient costs and tighter traceability requirements force changes quicker than can easily be scaled.

Sitting beneath this layer of rapid change is the familiar challenge of labor availability. A recent Deloitte survey of manufacturing leaders found that more than a third cite upskilling and workforce readiness as their top priority.

Despite a difficult operating environment, regulations like the FDA’s FSMA 204 traceability rule are elevating standards, requiring manufacturers to maintain detailed records across key supply chain events and provide that data quickly when needed. This mandates visibility into production —specifically, how labeling and inventory data are captured and connected across the business.

With raised stakes and lower margins for error, manufacturers must be proactive about reducing complexity within their operations. Fragmented systems and manual processes are both too commonly relied upon. What may have worked in simpler times continues to wreak havoc on today’s modern operating environment.

Hidden Costs in Manual Processes

Traditionally, food and beverage manufacturers have found an ability to manage core operating workflows with a patchwork of spreadsheets, legacy systems, and manual solutions. But as operations scale, what starts as inconvenient becomes unmanageable as companies add new production lines, facilities, or distribution channels. Heavy dependence on manual data entry across disconnected systems means issues only continue to compound.

The challenges caused by fragmented data go beyond day-to-day operations, slowing decision-making ability, which can be particularly detrimental in tumultuous times. Without access to real-time or updated data, leadership teams are making decisions based on lagging indicators. In turn, responding to supply chain disruptions becomes more reactive than proactive. At the end of the day, imprecise decision making can lead to costly rework, product holds or compliance risk.

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How Technology Can Help  

In an era where visibility and agility are becoming more essential, many food and beverage manufacturers are moving toward enterprise resource planning (ERP) solutions that help create a single system of record. By unifying production, inventory, finance and compliance workflows, manufacturers improve visibility while reducing the need for repetitive data entry processes.

This central repository also enables more effective automation by operating on a shared data foundation. Not only does this aggregation help surface timely information, but it also makes the most of what continues to be limited labor resources. By automating high-volume processes like production scheduling, inventory tracking, labeling and financial reconciliation, accuracy can be improved and the need for manual intervention reduced.

Technology improvements in visibility, traceability and consistency are already being realized as competitive differentiators. Manufacturers that have implemented ERP-driven automation are reducing manual labor, improving accuracy and enabling more confident decision-making across the business.

Driving Financial Impact Through Visibility

At the end of the day, technology investments need to map back to the bottom line. Automation and ERP do just that, going beyond daily operational improvements. Inventory represents a significant opportunity. What is typically one of the largest sources of tied-up capital for food manufacturers can quickly become a competitive advantage. The pitfall lies with manual processes, when production planning, inventory management and financial data are disconnected, it becomes difficult to align supply with demand and avoid excess stock.

With an ERP, improved visibility across purchasing, production and distribution means teams can more accurately track raw materials and finished goods. With this information, leaders can better adjust production schedules based on demand signals and reduce the amount of capital tied up in inventory.

In practice, global food ingredients manufacturer Van Drunen Farms helped avoid approximately $400,000 in annual inventory carrying costs by improving coordination across production and inventory workflows. Moreover, by cutting out manual reconciliation between operational and financial systems Van Drunen Farms reduced the month-end close timeline from 30 days to just two. This efficiency would allow them and other food manufacturers to take near real-time insight into decisions. No more outdated information sources — instead they make informed choices based on the current landscape.

Keeping Scaling Simple

Realistically, there’s no avoiding a rise in operational complexity as companies grow. It comes with the territory of new product lines, expanded distribution networks and evolving regulatory requirements. Today, this is especially true as supply chain volatility and labor shortages add complex consideration.

Scaling successfully means ensuring that a rise in complexity doesn’t outpace a company’s ability to manage it. This process doesn’t always look the same, but best practice tends to be early investment in systems that unify data and automate core processes. This allows manufacturers to expand operations without introducing additional layers of manual work. For example, Van Drunen Farms was able to automate labeling and warehouse processes, which not only improved accuracy but eliminated nearly 16,000 hours of manual labor previously required for relabeling activities. More than just eliminating risk, this improved efficiency and cost savings while operating with a leaner team.

While market turbulence seems unlikely to ease in the near term, manufacturers can still successfully grow with systems that provide real-time visibility, integrate operational and financial data, and automate high-volume processes.