How to Use Flexible Formula Management to Strengthen Your Food Supply Chain with Icicle ERP

As demand for heat-and-serve products rose during the pandemic, even megacorporation General Mills was consistently having trouble getting the ingredients they needed to keep up production and meet that demand. Supply chain disruptions can force food and beverage manufacturers into unproductive downtime that trickles down the supply chain and ultimately hurts your bottom line. So how did General Mills leverage formula management to build resiliency and protect profitability?

The answer is in their use of alternative ingredients and suppliers. Formula management enabled General Mills to develop 25 variant recipes for a single product, which created ample options for suppliers and formula variations and empowered them to maintain production schedules and deliver on consumer demands – even amidst unpredictable supply chain disruptions. Developing a backup arsenal of alternative ingredients and suppliers may seem overwhelming to smaller and mid-sized businesses, but the right solutions can help manufacturers of all sizes maintain profit margins and build supply chain resiliency at the same time.

In this article, we expand on Icicle ERP’s automated solution for supplier diversification to show you how Icicle’s automated formula management software seamlessly supports the needs of food manufacturers, from tracking product substitutions, supplier certifications, and traceability requirements to delivering real-time costing tools that empower you to strategically step forward into future growth.

The Agility Advantage: Alternative Ingredients and Flexible Formula Management

With supply chain disruptions affecting manufacturers big and small, it’s not difficult to imagine a scenario where you are planning production, only to find that you are short on quality ingredients and forced to shut down production as you wait for shipments to arrive. In these cases, the ability to make substitutions with alternative ingredients provides the flexibility required to sustain production uptime and ensure timely order fulfillment – making it a key strategy for weathering supply chain disruptions.

Formula agility or product substitution can also be an advantage for business profitability in other ways too. Alternative ingredients come in handy if you want to develop an allergen-free version of your product, for example, or issue a seasonal flavor, or to localize product formulations for specific regions or specialty markets. Furthermore, an evidence-based approach to shortening or localizing your supply chain can positively impact sustainability performance, making it an important part of the transition to sustainable food production.

However, swapping ingredients requires thorough planning to ensure that formulations with alternative ingredients will produce reliable results that are in line with quality specifications, as well as to secure your traceability chain. That’s where Icicle ERP comes into the picture, making it easy to diversify your ingredient list and keep track of substitutions and formula changes so that you can:

• Maintain production uptime during supply chain disruptions
• Make quick substitutions based on inventory shelf-life, ingredient quality, or price
• Preserve a bulletproof traceability record of substitutions
• Develop new formulas for market expansion and profit growth
• Optimize existing formulas for increased customer satisfaction
• Comply with market-specific ingredient regulations

Icicle introduces the flexibility you need to optimize the alternative ingredients sitting in your inventory, whether it’s for one-off substitutions or for developing variations and new formulas. With an integrated system that includes everything from inventory levels and shelf life commitments to formula calculations and traceability documentation, Icicle lets you focus your valuable time and effort on building resilient and profitable product lines.

How to Use Alternative Ingredients for Food Production with Icicle

Icicle’s integrated formula management system allows you to view inventory levels and shelf-life information before deciding which ingredients should be used for each production run. As you expand your ingredient list, here’s how you can optimize Icicle’s formula management features to track your alternative ingredients.

1) Start by Creating an Alternative Ingredient in Icicle’s Formula Management System

Creating an alternative ingredient in Icicle can be done directly from any Ingredient Details page. Simply scroll down to the “Alternative Ingredients” section and link an equivalent or substitute ingredient, and Icicle will automatically allow users to select that ingredient during production runs, as needed.

Once an alternative ingredient is created, Icicle updates the system so that the alternative ingredient is visible as an ingredient option in all relevant formulas that include the primary ingredient. This way, when you go to plan production and realize that there is not enough inventory of the primary ingredient, or you need to substitute it for some other reason (like allergen control), you or any employee with an authorized Icicle account can select a pre-approved alternative ingredient quickly and easily.

Use Alternative Ingredients During Production with Seamless Traceability and Quality Control

When it comes to actual production runs, Icicle provides exactly the information needed to make the best decisions for meeting production targets as well as quality and safety standards. Users managing production runs are able to see the quantities and remaining shelf life for all available inventory on hand, both for the primary ingredient and any alternative ingredients listed, making it easy to substitute as needed.

Often, alternative ingredients require changes to the formula and cannot be simply swapped in a one-to-one ratio. In these cases, users can set up unit conversions within Icicle to ensure that substitutions are made in the proper ratio ‒ eliminating human error associated with scaling ingredient quantities up or down. If unplanned substitutions have to be made during production, users can rely on Icicle to automatically calculate ingredient quantities based on formulas, the batch size of the production run, and the amount of ingredient that was used, and also clearly indicate if the ingredient quantities are out of range.

You can even leverage this information to improve product quality and consistency of formulas when using alternative ingredients to ensure that product quality always meets customer specifications and regulatory compliance.

Optimize Product Development with Production Costing, Super Secret Formulas, and More

Alternative ingredients aren’t only useful for last-minute substitutions, but can play important roles in formula development. Starting off with simple variations of existing recipes, Icicle saves your product development team time and energy by letting them clone existing formulas in order to experiment with new ideas and processes. Innovation can proceed without worry by switching on the super secret formulas feature, which protects your proprietary information by making the formulas invisible to all users except for those who have been specifically authorized to view it.

Here’s the coolest part: even before new formulas enter production, Icicle protects your bottom line with its extensive costing features to cover the entire food product lifecycle. During product R&D, Icicle users can reference the projected costing pane directly from their formula, which shows a detailed breakdown of expected material and labour costs for each unique production run and batch size.

And once production starts, Icicle users can access real-time production costing that takes into account expenses across their entire business to accurately assess the cost at completion of production. In addition to overall trending of profitability, users can easily view cost data (in actual numbers and as percentages) for ingredients, materials, and packaging included in any formula, allowing them to identify how each aspect contributes to overall product costs at a glance.

Sales staff can then reference real-time costing data from the Sales Orders interface during sales negotiations, or when setting product prices or promotions to support a rock solid pricing strategy and keep your business competitive. Icicle even automatically calculates currency conversions and updates inventory based on daily exchange rates for pinpoint precision in your product development decisions.

Build Resilience and Flexibility with Icicle ERP’s Formula Management Software

Alternative ingredients aren’t only a solution to supply chain disruptions. Having a flexible formula management system that can accurately track the usage of substitutes provides opportunities for product development, market expansion, and business growth. Icicle’s formula management system does this and more through our fully integrated and cloud-based system.

Book a demo to see for yourself how Icicle can help your business to build resiliency and profitability with our streamlined formula management tools and much more.