Idea Transcript
NOTES FROM THE FIELD VOLUME 3
PER ISHA24 BLE ITEMS PIECES
OF PEER
ADVICE
Reducing spoilage and improving management of perishable items
PRACTICAL ADVICE
from food experts on solving critical issues.
WHAT IS “NOTES FROM THE FIELD”? To help food manufacturers with some of the key industry issues Columbus has asked the Food Community “What advice would you give your peers to improve management of perishable items?” Experts from our food manufacturing customers, our employees, analysts, consultants and partners from all over the globe have fed back either directly to Columbus or via our social media channels to give their “Notes from the Field.” We received hundreds of responses which were distilled into this document which we hope you will find useful and interesting.
PERISHABLE ITEMS Closer management of the supply chain to
challenging. Perishable items that become
try to ensure the right product is delivered
spoilage impact directly on the profit of the
at the right time to the right place in
business and the customer service level. The
the right condition is a driving ethos of
management of the replenishment policy will
supply chain management, and where the
directly impact on these items and it is critical
product is perishable the task is even more
to analyze and manage the process.
NOTES FROM THE FIELD
Q:
What advice would you give your peers to improve management of perishable items?
“ The two best methods to reduce spoilage is to have rigorous inbound quality testing and rejection of marginal inputs and to turn inventory quickly and carry as little inventory as possible. Having the flexibility to balance these variables and still maintain customer satisfaction requires good information about supplier quality and systems which can deal with lots and lot quality rankings.” PHILIP BRUNS, United States
Control stock effectively and improve reporting of stock variance by department and user. This will identify where spoilage is occurring and enable management to introduce incentives for avoiding waste.
Use of the expiry date reporting
CHRIS BRAISBY, United Kingdom
and the new customer sellable days to ensure that customers get in date product and are aware of products nearing their expiry or best before dates. These can then be put on promotional offers to clear. TONY FARR, United Kingdom
“ Effective use of the expiration and best before dates on raw materials, intermediates and finished products is key to the success of most food manufacturers. Using a combination of the FEFO (first expired first out) for picking and including the shelf life in the master planning calculation can ensure you are always choosing the right batch and you always have sufficient stock within date. ” MIKE GREENWAY, United Kingdom
“ Ensure each batch of stock is reserved and picked, sending the oldest allowable stock to each customer. This reduces average stock age, therefore fewer stock write-offs. “ DAVID MOODIE, United Kingdom
Look at an integrated MRO solution. A small investment that can make huge savings! WIM PLUIMERS, Netherlands
Design accurate Bill of Material and set up scrap percentages for raw materials to cover process spoilage. SHAILESH GAJARALWAR, India
“ Several things: Order as close to the point of sale as possible which goes hand in hand with inventory control, the more inventory the more shrink due to damage and mishandling. Also, make sure inventory and shelf space is in line with sales. “ WILLIAM LLOYD, United Kingdom
Don’t focus on controlling the “ Inventory management is the first consideration. Also consider promotional strategy, proper shelving, and correct SKU mix are other factors which should be reviewed. Cannibalization within your brand is often overlooked. Sometimes fewer SKU’s will make remaining SKU’s work harder. Confirm product distribution. Is the product in all stores authorized? Getting all elements right will take time, research and working in the market - meaning conversations with the department managers to better understand what is going on at street level. Hopefully the research you do will lead to a better understanding of factors that need attention that could help reduce spoilage. Correctly identifying the cause and solution will pull product through the distribution system faster, providing improved gross sales for your customer and the company you represent. Best wishes for success. ” TERRY COULT, United Kingdom
spoiling product. Focus on why it was produced in the first place if there was no demand for it. DON TYLER, United States
“ Ensure that QA practices make quality assessments at point of receipt in order to grade material and assign realistic expiry and re-test dates. Ensure that planning tools utilise expiry dates and product batch status when they are being used to provide re supply recommendations. “ KEVIN BULL, United Kingdom
Use a solution to tell the business the age of all the raw material and finished products held in stock and
“ Seek state-of-the-art integration between manufacturing execution and materials management systems, Define simple and efficient waste management procedures and ensure they are followed. “
to alert if any are reaching a point where they will go out of date. TONY CARLISLE, United Kingdom
BJØRN PEDERSEN, Denmark
Keep tight inventory controls, and keep the system flexible. Perishable items require flexibility due to constant movement and
“ For companies with short shelf life product lines, the tracking of freshness dates and product rotation is critical. Even companies with longer shelf lives can get caught if their information systems don’t support freshness tracking. The ideal situation is where the ERP system can support definition of freshness requirements by customer/product/ship-to and shelf life by item, tracking of the age/best if used by/expiry date of each lot of product (raw materials, WIP, and finished goods), and a picking process that suggests the oldest lots for picking that meet the freshness requirements of the customer - either in terms of the age of the product when shipped, or else the remaining days before the best if used by date or expiration date. So for example, a local customer might be able to take older product than one far away, taking the transit time into account. Also, solid reporting on inventory aging is critical. ” JIM BRESLER, United States
perishability. NATASHA PIJUAN, United States
“ Think about the ability through business planning to cater for management of expired ingredients - when production planning takes place, the plan takes into account materials that may have expired by the time production is to happen and will plan accordingly. “ MARTIN BURDEN, United Kingdom
1. Better hygiene practices. 2. Avoiding temperature abuse. 3. Clean pest free storage area. 4. Follow FIFO.
Reducing spoilage and improving management of perishable items
5. Purchase only the quantities you need in the ingredients shelf-life. GEETA G. COHLI, United Kingdom
can be done by ensuring quality control within the value chain, in places such as within the production. JOHN PETERSEN, Denmark
“The best way to reduce spoilage or shrinkage is of course meeting the customer demand and taking care of effective and efficient temperature controlled transport, storage and handling. By collaborating with both suppliers and customers and sharing data on market developments (trends, season, promotions etc.) you will gain better understanding of the actual demand. “ GUIDO VAN OSCH, Netherlands
Count your inventory on a daily basis and highlight items that are not moving. These items should be discussed and dealt with at your daily sales meeting. ANONYMOUS, United States
“ All goods must be ordered as close to the time of sale as possible. The largest reserves occur at the end of the week and weekend. The time during which you spend handling perishable goods is the most important factor, so we deliver to our stores almost every day. Direct orders: Dairy and bakery products are delivered directly to stores. The sub-supplier (merchandiser) allocates and fills the available shelf space to support the rotation of products in stores. This requires accuracy in supplies and supplies in sufficient quantity. A supply schedule solves this problem, for example, baked goods are delivered in the morning and at 4 pm. As a result we exclude overdue goods, place the products on target shelves and ensure timely payments. ” SVETLANA KONDAKOVA, Russia
Install efficient batch control and in line control, to avoid surprises. HENRIK OXLUND, Denmark
“ To understand the current spoilage levels the business has to capture this data. In addition to this, data on transactions leading to spoilage and reliable data on the perishable item is critical. The ability to track elements of the product is required; this will include shelf life, best before dates and expiry dates. By tracking at this level the business can begin to understand what causes spoilage by analysing the transactions. In many cases the impact of the customers’ requirements and the initial ordering profile will contribute to this and analysis and management can help align the matching of the correct product to the demand, better utilising the inventory and reducing the overall impact of transactions leading to spoilage. ” STEVE WEAVER, United Kingdom
1. To focus on the layout of WH or Store - study the layout first and see if re-arrangement is required based on chilled, frozen or dry food. 2. Increase the frequency of delivery of goods by vendors. 3. Improved ITR and more frequent material movement. ARVIND RAMESH, UAE
HOW CAN COLUMBUS HELP? COLUMBUS F&B
BENEFITS
Food and beverage companies have unique, wide-ranging needs that go well beyond standard Enterprise Resource Planning (ERP). Many food companies often struggle to pull together “a system that fits” with add-ons and costly customizations within their core ERP application.
1. INTEGRATED SYSTEMS SMOOTHLY CONNECT ERP AND ENTERPRISE ASSET MANAGEMENT PROCESSES. The ERP system automatically triggers the maintenance system with critical production information. Enterprise asset management capabilities will then reserve the corresponding downtime on your ERP production schedule.
ColumbusF&B enhances core ERP capabilities to meet food-centric needs, and also builds in industry-specific features traditionally found only in third-party ecosystem solutions. Our goal is to deliver, and continuously enhance, an affordable solution that meets common requirements and scales and upgrades with minimal customizations. Our solution also includes the role tailored user experience, multi-language and multi-currency capabilities, and seamless integration with your IT infrastructure. Columbus enables you to meet customer demand, dissolve traditional barriers to doing business, and adapt internal procedures to create a lean, profitable environment—now and into the future.
2. OPTIMIZE PRODUCTION SCHEDULING BASED ON PRODUCT PROPERTIES SUCH AS COLOR AND FLAVOR. ColumbusF&B integrates production and maintenance scheduling to optimize capacity utilization. 3. PAY ON GRADE AND QUALITY OF RECEIVED PRODUCTS. Settle payments to your growers and farmers based on actual product characteristics by automatically calculating the price based on quality data. Users can also adjust the base price and add charges or deductions. 4. MANAGE POTENCY WITH EASE AND FLEXIBILITY. View, value and work with potent items in inventory and formulas—critical for organizations working in dairy, vinegar, wine, beer and spirits. Revaluate potent inventory and pay growers or vendors based on the potent content of their supplied materials or ingredients. 5. ELIMINATE MANUAL, OFFLINE PROCESSES FOR BATCH-BALANCING POTENT LOTS. Achieve desired potency targets with automated processes that let people view, select, blend, and balance lots while working directly in your ERP solution.
The full ColumbusFood solution includes our best practice business process modeling with RapidValue, our own Food and Beverage and Supply Chain Solution modules, Microsoft Dynamics AX, and our proven implementation methodology, SureStep+.
A big THANK YOU to everyone who has contributed to the Food Notes from the Field including: Arvind Ramesh, Bjørn Pedersen, Chris Braisby, Claus Christensen, David Moodie, Don Tyler, Ernestas Zaburas, Geeta G. Cohli, Guido van Osch, Henrik Oxlund, Imants Sakss, Jim Bresler, John Petersen, Jon Wells, Josh Sanders, Kevin Bull, Lisa Hammond, Martin Burden, Martin Clothier, Mike Greenway, Natasha Pijuan, Per Christensen, Philip Bruns, Ruta Grigiene, Shailesh Gajaralwar, Steve Weaver, Svetlana Kondakova, Terry Coult, Tony Carlisle, Tony Farr, William Lloyd and Wim Pluimers.
The ColumbusFood Notes From The Field Series:
Volume 1
Volume 2
Volume 3
Volume 4
Volume 5
Volume 6
Product Recall
Predicting Demand
Perishable Items
Supply Chain
Business Processes
Food Safety
For more information on Columbus, our clients’ experiences and our solutions, please visit www.columbusglobal.com
ABOUT COLUMBUS: Columbus is the preferred business partner for ambitious companies worldwide within the food, retail and manufacturing industries. We exceed 20 years of experience and 6.000 successful business cases, and we’re proud to offer our customers solid industry know-how, high performance solutions and global reach. ’Columbus’ is a part of the registered trademark ‘Columbus IT’