Business Intelligence
Customer Relationship Management
Document Management
Finance Management
Governance, Risk & Compliance
Human Resources
Planning and Scheduling
Product Data Management
Production Management
Project Management
Retail Management
Sales Management
Service Management
Small and Midsize Enterprises
Supplier Relationship Management
Supply Chain Management
Warehouse Management
e-Commerce
It is becoming of increasing concern how the impact on the environment is being affected by your actions. Businesses across all industries are recognising the importance of minimising waste. For the food industry where sustainability is not just a trend but a responsibility, efficient inventory management becomes paramount. In this blog, we will explore how an ERP (enterprise resources planning) solution plays a crucial role in minimising food waste, through the implementation of certain procedures which can be completed easily.
Main reasons for food waste
Food waste is a complex issue influenced by various factors. Technical issues during the food production process or equipment failures contribute significantly to this problem. Inefficient machinery, breakdowns or malfunctions in the production line can lead to the discarding of food products. This may result from issues such as incorrect settings, contamination risks or difficulties in maintaining optimal conditions for food preservation.
Quality issues with produce also play a crucial role in contributing to food waste. Imperfections in appearance, size or ripeness may cause manufacturers, retailers and consumers to reject certain items, even though they are still safe and nutritious to eat. This aesthetic standard is often driven by consumer preferences and retail requirements, leading to unnecessary disposal of perfectly edible food.
Watch the full Fungi Delecti video
Furthermore, another reason for food waste is supermarkets, and restaurants over-ordering, consumers are guilty of this too. The tendency to purchase excessive quantities of produce, often beyond what can be sold or consumed before the expiration date. This results in surplus inventory that ultimately goes to waste. Adopting a “little and often” approach, particularly for fresh and chilled foods, can help minimise excessive waste. This strategy involves making smaller, more frequent purchases to better align with consumption needs and reduce the likelihood of food spoilage. Educating both businesses and consumers about mindful purchasing habits can contribute to minimising the overall impact of over-ordering on food waste.
Change of mindset
The Fruition of Mintel’s “Waste not” trend unfolded in the years following 2017, presenting an opportunity for the food industry to utilise produce and ingredients that would otherwise have been discarded. Today, Supermarkets proudly offer “Wonky” fruits and vegetables, as a testament to the shift towards minimising food waste.
With the economic challenges that followed from the 2017 predictions, including COVID and BREXIT, consumers have welcomed these products as a means to save money. The cost of living and food have experienced a notable upswing with a 9.2% increase in the cost of food and non-alcoholic beverages reported in November 2023, according to the Office of National Statistics.
Inventory Management Strategy
Efficient inventory management is vital in the food industry, where the impact of waste is not only economic but environmental too. A crucial procedure that is advised to be implemented is ensuring the FIFO (First In First Out) procedure is in place efficiently and effectively. Managing a strategy like this can have its challenges including human error of not rotating the stock, checking the stock is in the correct order or picking the ingredient or produce that goes out of date first.
An ERP solution can help implement this strategy and reduce some of the issues stated above, by ensuring that older stock is utilised before newer stock, reducing the risk of expirations and subsequent waste. By automating the tracking of inventory based on FIFO, the system becomes an ally in the fight against food waste.
Furthermore, ERP can also rotate stock based on batch numbers and expiration dates on the off chance a recently purchased product has a shorter shelf life date, this can be used first. The same items don't necessarily have to be stored in the same location as the ERP system will be able to advise you which location you would need to pick from.
Moreover, ERP plays a critical role in ensuring allergen concerns are kept at bay. With the capability to meticulously track and manage inventory, ERP systems ensure that allergenic items, such as nuts, are not only appropriately labelled but also stored separately to prevent cross-contamination. This not only aligns with regulatory requirements but also significantly reduces the risk of allergen-related recalls, which can result in substantial waste. By using the advanced capabilities of ERP solutions, businesses can enhance their food safety protocols, maintain compliance, and contribute to a more sustainable and responsible food industry.
The role of ERP solutions in implementing FIFO
Many businesses turn to Enterprise Resource Planning solutions as they can transform your approach to inventory management, particularly in the context of implementing the First In First Out (FIFO) procedure. These technological solutions automate inventory tracking, ensuring adherence to the FIFO principle. By taking advantage of ERP capabilities, businesses can efficiently manage stock rotation, ensuring that older stock is utilised before newer stock.
One significant advantage provided by ERP solutions is the availability of mobile apps designed to streamline the stock-picking process. These apps enable users to easily identify and retrieve the oldest product from the correct location, eliminating the need for time-consuming searches of the product which is due to expire next. This not only saves valuable time but also contributes to cost reduction by preventing the disposal of products that may otherwise go out of date.
Real-time data insights are another invaluable benefit offered by ERP systems. By providing immediate and accurate information on inventory levels, businesses can make informed decisions. This includes optimising stock levels to meet demand, avoiding overstock situations, also, the most critical point, reducing the likelihood of products reaching their expiration dates before consumption. This proactive approach not only minimises waste but also enhances overall operational efficiency and financial sustainability for businesses in the food industry.
In essence, the integration of an ERP solution not only streamlines inventory processes, but it aligns the organisation with sustainable practices, taking a more responsible and environmentally conscious approach within the food industry.
In conclusion
The food industry and consumers have recognised that there is an issue with food waste. Therefore, have become accepting of this and realise that they need to act to help with the environmental challenges. By adopting Mintel’s “waste not” theory, consumers have accepted purchasing wonky goods at a slightly cheaper price to perfection when the quality and taste are just as good, especially with the cost of living being a key influencer.
The Food Industry has also recognised the need to take responsibility for their food waste and be accountable for it. Not only does it affect the environment but it also costs them a lot of money to throw away, as the food/ingredients will need repurchasing. Therefore, opting for a FIFO strategy to reduce this. However, we discussed the implications of a manual FIFO strategy and how an ERP solution can help provide a strong foundation for this procedure to be effective, time-saving and cost-saving.
Curious to learn more? Send us a message through our contact form
.png?width=137&height=137&name=MicrosoftTeams-image%20(4).png)