Procurement is a key component of a successful food and beverage operation, but managing inventory and suppliers can present complex challenges for even the most accomplished F&B companies. Since fresh ingredients are often involved, you also have the added challenge of time limitations and expiration dates. Even with the best-laid plans and intentions, an organization may still find itself struggling to fulfill priorities such as avoiding spoilage, adhering to health and safety requirements, ensuring food safety and meeting consumer demands, all while maintaining acceptable margins.
Bottlenecks in procurement operations can create a domino effect of issues that negatively affect profitability. When procurement plans and processes are done the right way, however, these challenges can be adequately addressed or avoided altogether. Doing things the right way means you can efficiently collect, manage, and analyze up-to-date, granular supply chain data. And Specification Management software was designed to do just that.
Here are a few of the most common F&B gridlocks and how Specification Management software provides a solution.
Seasonal Consumer Preferences
Demand for specific foods and beverages is largely seasonal, and it’s important for F&B companies to understand all involved context and nuances to avoid waste.
Distributors often struggle to keep up with the surge in seasonal food demand. And for the rest of the year, they fail to curb wastage when the supply chain runs dry. However, these challenges can be adequately addressed using a Specification Management platform without affecting workflows.
Real-time access to inventory levels, for example, can help curb spoilage and inefficient ordering practices. Specification Management software also provides dashboards and tracking capabilities that analyze trends over time to help you better understand consumer demand. These powerful insights can highlight previously undiscovered data points and associations to drive new ROI opportunities. Having detailed historical data on exactly which products are most popular, when and where they are selling, how they are made, and by who, allows the linkage of past metrics to future strategies, ultimately driving long term cost savings and benefits across the board.
Minimum Order Quantities
Many suppliers offer substantial discounts for items ordered in bulk, but quantity requirements can sometimes offset any savings if overstock goes to waste. This can cause smaller F&B operations to miss out on bulk savings since they only need a limited number of certain ingredients. However, an easy way to track shelf life and compare cost savings from bulk suppliers can help operations of any size improve ordering decisions and maximize their spending. This is a particularly important priority for smaller organizations that operate under the assumption that bulk savings are unattainable or illogical. Using Specification Data Management™, companies can input bulk order requirements, prices, and shelf life from each supplier to identify previously overlooked opportunities to maximize their purchasing power.
Food and Beverage Supplier Management
Most food and beverage companies work with multiple suppliers, a challenge in its own right. Managing different suppliers means tracking various price points, SKUs, ordering requirements, lead times, and a myriad of other details that can affect operations.Clearly, managing what you order from each supplier (and the price they charge) can become problematic.
To avoid chaos and confusion, companies need an easy way to track what each supplier provides, what each item costs, minimum requirements, fuel surcharges, and other data that can help companies make better decisions. With Specright, real-time data is available and is always up-to-date. Users get a bird’s eye view of complete data and histories and can access data and collaborate with suppliers from anywhere since it’s managed in the cloud. Order management has never been this easy.
Shelf Life and Contamination Risks
The perishable nature of inventory makes the food & beverage business a challenging one. Transportation delays and improper storage can lead to items becoming stale or contaminated. Such nuisances can significantly impact businesses, distributors, and other entities in the supply chain.
If you are in the beverage & food industry, you know that most fresh ingredients have a limited shelf life, which is sure to apply pressure to your inventory management and procurement operations. Failure to adequately monitor shelf-life requirements for each product can lead to food contamination, which may have a domino effect on other areas of your food production business as well as compliance management (e.g. recalls, etc.).
How to Solve Procurement Challenges with Specification Management Software
All of these procurement challenges can wreak havoc on already-thin profit margins of retailers in the food industry. The good news is that each issue can be drastically reduced or eliminated by turning your data into valuable insights with Specification Management software.
Specright’s platform is a great way to automate and streamline the food supply chain. It collects and stores product master data at the granular-spec level, giving you instant insight into every product and ingredient under your roof. This not only allows you to have instant access to information, but also enables you to make data-driven decisions that can solidify procurement processes, improve supplier relationships, and ultimately improve your profits.
Specright has made it to the list of world’s most innovative companies of 2023. With a result-driven approach, Specright helps address supply chain challenges that modern businesses face in the food & beverage industry.
To learn more about Specification Data Management and Specright, download our ebook on why Specification Data Management is the Future of Food.