By Dattatray R.Kulkarni Posted January 17, 2017 Benefits of SAP Business One, Management
Food and Beverage industry has tremendous growth potential in the India market. Easy availability of raw materials, changing lifestyles and favorable fiscal policies have given a considerable push to the industry’s growth. However, there are several challenges too that the industry has to face, especially the SME segment be it in the form of inadequate infrastructure, lack of skilled manpower, lower efficiency in operations, inability to take advantage of economies of scale and so on. To be successful in this environment food processing companies, especially in the SME segment, have to focus on their internal operational efficiencies which are under their control.
Food processing companies need to address the following key elements on a day to day tactical level to ensure that they run their operations at maximum efficiency.
Sales planning for the year could be an exercise undertaken at the beginning of the financial year and provides the overall numbers based on growth targets. This gets broken down to quarterly or monthly numbers and basis for arriving at the actual numbers for that period is the performance of the company (territory wise, product category wise, product wise etc.). Hence it is important to have access to last years’ sales data at the same granularity.
SAP Business One enables this company to do exactly the same. Every transaction like sales order, delivery, sales invoice is captured. This data can be easily pulled up and made available as input for planning process. Cost incurred in the development of a new product can be captured accurately using the project management functionality, which can help in deciding the pricing strategy.
Whereas seasonal availability may force companies (depending on the nature of the input products) to procure certain agriculture produce (as input) in bulk quantities they can plan rest of the items by utilizing the MRP feature of SAP Business One, which recommends procurement and production proposals, thus making the process fast and accurate.
Impact of inefficient inventory management hurts a food processing like any other and possibly more due to the perishable items which if not used in time are a direct loss to the company.
By using SAP Business One, not only can the company plan right quantities of materials at right time (using MRP) but also keep a track of material consumption with high accuracy using BOM (recipe) and production order process. SAP Business One also helps in tracking inventory of perishable goods by alerting the users about the impending date of expiry, thus ensuring that inventory of such does not get wasted due to end off expiry.
4.Maintaining appropriate process parameters
When a food company is engaged in mixing more than one ingredients for arriving at the required flavor or consistency or equivalent property, it requires to maintain required process parameters at these mixing (or blending) stations. With SAP Business One Quality Management solution that Praxis has built, one can keep a track of such parameters at the required frequency and alert the production supervisor in the event of abnormal parameter values.
5.Production and Yield calculation
Certain manufacturing processes are subject to variation in the output quantity (or equivalent property) based on the variation in process parameters.
SAP Business One allows one to keep a track of planned and actual consumption and also calculates the variances in either quantity of input materials used or quantity of output material produced helping the user to arrive at the process yield, which is a critical performance indicator.
6. Batch management and tracking
Food items are usually produced in batches and the batch numbers are required to be printed on the label of the finished product. Not only this, the company needs to be able to quickly trace a particular batch all the way till raw materials that were used in its production, should they receive any customer complaint. Government regulations also demand that companies have an efficient and quick mechanism to track this.
With SAP Business One managing batches is very easy. Apart from tracking the batch number per se, the user can also track other parameters of the batch like date of manufacturing, expiry date, suppliers batch number (in case the item is bought from market) etc. Batch tracking report allows the user to trace all input materials/parameters used in a particular batch with a click of the mouse thus allowing the company to take quick corrective actions
7. Price lists
Being a highly competitive and price sensitive market, food processing companies need to keep a close eye on the pricing of their products versus sales growth (or market share) and make changes to the same dynamically.
SAP Business One allows the company to create and manage multiple price lists. Seasonal discounts can be applied very easily and quickly. Entire price list revision can also be done quickly thus allowing the company to become agile and capture opportunities as presented in the market smartly.