Eliminate Food Waste with Icicle’s Real-Time Inventory Management Tools
Most people might be surprised to learn the scale of food waste in the food and beverage industry, which according to Second Harvest amounts to more than half of the food produced in Canada every year. About a third of the total lost and wasted food is unplanned and avoidable, representing a financial loss of $49.46 billion annually along the food supply chain. For food producers, manufacturers, processors, and distributors, that number should be a powerful prompt to revisit the effectiveness of their inventory management systems.
Indeed, McKinsey estimated just a few months ago that inventory waste can be eliminated by 50 to 70 percent by reducing the inefficiencies in your value chain. Achieving this level of operational efficiency requires the appropriate tools, which Icicle ERP offers in a way that addresses the importance of inventory management and the causes of food waste for food and beverage manufacturers in particular. Icicle’s features enable local BC companies like Big Mountain Foods and Country Prime Meats to set new standards for waste-free and carbon-neutral manufacturing, and innovate to lead the way on popular market trends like upcycling. But first, let’s discuss why a unique strategy is necessary to meet the challenges of today’s food industry.
The Food Waste Problem with Just-in-Time Inventory Management Techniques
Just-in-time management (also known as JIT or lean manufacturing) is an inventory and production line management system that works by replenishing inventory levels according to real-time consumer trends. By only ordering what is needed to meet the forecasted production schedule, companies can minimize inventory waste and storage costs.
A challenge for food and beverage manufacturers is that most raw materials and food products have a finite shelf life and the JIT methodology plans all aspects of production, including the timing of receiving and shipping, to minimize avoidable waste caused by stale or spoiled inventory. In order to be effective for the food industry, ingredients and other materials need to arrive, be used, and get shipped out in final product form at exactly the right moment – or risk taking a sometimes fatal bite out of profitability.
Furthermore, using the JIT method requires a stable supply chain to predict and purchase the minimal amount of inventory needed to meet consumer demands. With recent supply chain disruptions increasing factors like lead time and supply costs, it is becoming more complicated and costly to maintain granular control over the future of your production line.
Designed specifically for the food industry, Icicle ERP leverages automation technology to strike a balance between the principles of lean manufacturing methods and the needs of your customers. The result is a dynamic inventory buffer system that can respond flexibility to real-time changes with real-time data. We start with smart production planning and end with analytics and dynamic product costing to show the full lifecycle of Icicle’s waste-targeting technology.
Stop Wasting Food and Money with Smart Production Forecasting and Purchasing Suggestions
Icicle’s Production Forecasting interface uses JIT inventory management techniques to suggest production quantities and timing based on existing inventory, booked sales, planned production, and pre-set inventory thresholds. Accuracy is important for these calculations: if you overshoot, you’re likely to have purchased too many ingredients, leaving unused materials and unsold products to go stale in a crowded warehouse. On the other hand, undershooting production can affect your relationship with customers if you’re not able to fill their orders.
“If you have 12 people waiting to do the work and they can’t start because one ingredient is missing and they’re waiting for someone to run to the supplier and come back… I weep for the amount of money wasted. It’s totally avoidable. A good warehouse management solution is able to help us keep track of all of this and Icicle is able to do it for us” – Paul Tolnai, P&S Frozen Foods
In short, eliminating food waste and boosting operational efficiency demands a data-driven approach to planning production, purchasing, and inventory management. Using real-time data, Icicle’s predictive algorithms can not only guide production planning but also generate smart Purchasing Suggestions that factor in crucial data points like ingredient shelf life and supplier lead times – factors that are essential to food manufacturers navigating supply chain disruptions and higher costs. Users can simply review the suggested items and create purchase orders directly from the Purchasing Suggestions interface, streamlining the entire process and bridging together departments from sales to production to logistics.
Together, Production Forecasting and Purchasing Suggestions together work from real-time data to make sure you have everything you need to meet production targets and customer demands – but not so much that you waste time, space, and resources.
Optimize Inventory Stock Management for Longer Shelf Life and Higher Profit Margins
With manufacturing, time is of the essence. To avoid production delays and optimize inventory shelf-life, automated inventory management tracks, stores, and uses inventory efficiently. Once you’ve used Icicle ERP to plan your production, you can extend the data-driven approach to eliminate waste all throughout the production process.
With Icicle, inventory is tracked by lot code from the moment it reaches your facility to when the finished product is shipped out to customers for complete, end-to-end traceability. Warehouse workflows can be designed to incorporate GS1 compliant barcodes that can be scanned at any time in the warehouse or on the production floor to view the entire transaction history of that item in chronological order. This includes exact inventory locations (such as Product A is located on Rack A, Column 1, on the top shelf in the back) to reduce time spent on racking and picking as well as minimize wasted resources solving inventory discrepancies.
Using manufacturing data from the label, Icicle also automatically calculates best-before dates for raw materials. This is one of the most important benefits of reducing food waste for food manufacturers: controlling the expiration dates of your raw materials is essential for optimizing shelf life and even meeting shelf life commitments set by customers. To deliver the best results, Icicle will automatically suggest inventory for production in FIFO (first-in-first-out) order, again reinforcing good communication practices, quality control, and food safety culture across departments.
Imagine Product Costing with Real-Time Data from Cloud-Based Inventory Management Software
The final step to creating an efficient production line is to ensure that everything continues to run smoothly. Icicle’s data collection and trending features paired with its cloud-based technology does just that with real-time data that brings together all aspects of your business into one dynamic and highly useful system.
Icicle’s suite of reports and analytics help identify waste as well as detect pattern deviations, foresee production problems, and isolate issues before they get out of hand. These features draw strength from Icicle’s backbone: food safety and traceability. Alongside the ability to conduct a mock recall in just a few minutes, Icicle ERP users can drill down into all matters of efficiency and waste reduction and benefit from automation features that make improvements easy to implement – and measure.
Perhaps most valuable in terms of protecting profitability and quantifying waste (including food waste), Icicle’s Production Run Input Reports provide full visibility into the cost of production runs of any level of complexity, down to the real-time cost per unit. Icicle’s Production Costing features show you breakdowns of all the elements that go into production (ingredients, materials, labour, and more), presented both in real numbers and percentages so you can assess waste at a glance.
“I obviously do a ton of financial modelling and we follow a lot of assumptions. [Dynamic production costing] is incredibly useful because it’s wonderful to be able to see or to vet your assumptions based on what’s actually happening on the floor, based on your output, and everything that went into that, including waste.”
Icicle ERP Amplifies the Benefits of Reducing Food Waste for Your Business
Eliminating food waste is a matter of sustainability both for the planet as a whole and for any food manufacturing business. While JIT inventory management techniques have set the standard in many ways, Icicle ERP uses sophisticated automation tools to modify inventory management strategies for the food and beverage industry – with all its unique features and foibles.
A data-driven approach to waste management delivers granular control over the timing of receiving, production, and shipments to optimize product shelf life, even in unstable supply chain conditions. With features like production forecasting, smart purchasing suggestions, inventory organization with GS1 barcodes, and production costing and automatic data trending, Icicle can lead you to smooth, waste-free production and inventory management that increases profit and saves time and resources for your company.
Contact the Icicle team today for a free demo to learn how else Icicle helps your food business eliminate inventory waste and maximize profit.