Food distribution is a crucial part of the food supply chain. Any negligence during goods movement in a distribution center can cause a ripple effect on the entire supply chain, thus impacting the safety and quality of the food.
The issues only get worse when the process is manual. A limited staff, struggling to manage an increasing variety of SKUs, decreasing storage space, and seasonal peaks in business, may lead to inefficiency in warehouse operations. With rising customer expectations such as fresh, exotic food throughout the year, the supply chain has become longer and more complex.
Clearly, the main challenge for all stakeholders right from production, manufacturing, distribution, and logistics is to quickly and safely deliver the right products, in the best condition, to the market.
There are several automated food distribution solutions in the market today that can help overcome the challenges and enable an efficient food supply chain. You need to find the right one that can optimize the entire system.
In this blog, we will list the top benefits of implementing the right food distribution solution for your business.
1. Improved inventory management
The food industry typically consists of large inventories and the stock is mostly perishable. Hence, the inventory management process in food companies is different compared to others. You need the right tools to manage inventory, such as a food distribution ERP to manage your supply chain, product delivery, and food safety.
A food distribution solution allows you to keep tabs on and manage the various stocks and products in your system. You also get timely updates on items that are nearing stock-out. Thus, you can ensure to restock the products at the right time and avoid any shortages and loss of sales. Consequently, you can achieve a streamlined supply chain as you easily track inventory in several locations, make refunds, and optimize inventory.
2. Better demand forecasting
With an array of options at their disposal, your customers can get whatever product they need at any time from anyone. Hence, ensuring product availability at the right time is a complex and crucial task today. Demand forecasting can help in predicting future trends and thus make informed decisions.
A food distribution software gives you insights based on historical and current data of your business. By analyzing this data, you can understand the demand cycles to forecast future requirements. Accordingly, you can improve your inventory management to prevent stock-outs or surplus. Thus, by creating and implementing an effective distribution strategy, you can stay ahead of the competition.
3. Enhanced stocks storage and scheduling
The importance of storage and scheduling of stocks is often overlooked. However, an unorganized system can result in wasting time and money, expensive errors, food wastage, and decreased customer satisfaction.
A well-planned storage and scheduling system can help you improve the quality of your storage and plan it in such a way that you pick the food stocks according to their expiration date.
Your picking process gets better with staging that enables your staff with picking the FIFO (first-in, first-out), LIFO (last-in, first-out), and FEFO (first expired, first-out) can enhance the process further. Consequently, it also makes the team more efficient.
4. Maximized profits
An effective pricing strategy enables you to have more flexible pricing options through promotional discounts and price change techniques. It allows you to get a complete cost list of the product including the delivery charges so that you can offer a competitive sale price to your customers and get maximum profits yourself.
A food distribution solution can help you with effective pricing strategies for your business to ensure you get the maximum benefits out of it. It offers you the flexibility to determine your cost price, keeping your profits in mind. By considering the cost of workforce, storage, fuel, transportation, sourcing, and logistics, you can ensure the right costing of your products.
So, What Next?
To summarize, an ERP is hugely beneficial to food distribution. It helps food business make informed decisions, meet the necessary compliance requirements, improve brand management, simplify complex processes, and increase profits. Here are a few things to consider when you start looking for a food distribution software:
- Understand your processes and business systems thoroughly
- Plan key strategies that can collaborate all your business operations
- Make an outline of your requirements
- Check out for basic features such as lot tracking, flexible pricing, and multiple units of measurement
- Talk to the vendors to check if their food solution can offer all the features you need