Icicle ERP Manufacturing Resource Planning Feature Overview

Optimize your average variable cost with production costing and advanced manufacturing production scheduling software

Variable costing can be difficult to calculate and predict for food and beverage manufacturers because so many things can change during production, from suppliers to batch sizes and more. Accurate costing information with manufacturing resource planning software not only helps you with budget estimation, it allows you to identify your optimal selling price formula and identify opportunities to improve your profit margins.

Instead of relying on estimates based on industry standards or historical data to make big financial decisions, Icicle’s food costing and inventory software allow you to predict costs of future production runs based on real-time production and inventory data. Especially within the competitive food and beverage sector, infamous for slim profit margins, Icicle’s product pricing software features provide you with the essential data so you can make financial decisions with confidence.

Real-Time MRP Systems for Cost-Based Pricing and Optimal Profit Margins

Knowing real-time production costing information empowers Icicle users to optimize their food cost formula and manufacturing costs today and plan ahead for future growth. Icicle’s manufacturing resource planning system helps food and beverage processors navigate notoriously slim profit margins by hitting target costing and planning future productions to grow revenue. Costing data is collected from all aspects of your business, allowing Icicle users to identify cost inefficiencies, predict production costs, set cost-based pricing and more.

 

Key Benefits

  • Optimize your selling price formula with real-time visibility into actual cost-per-unit
  • Drill down into your manufacturing overhead costs (including labor costs) to maximize operational efficiency and revenue
  • Innovate product development and access insights into estimated cost at completion based on ingredients, process steps, suppliers, and more
  • Streamline manufacturing costs using production scheduling software that forecasts production needs based on inventory and sales data
  • Maximize efficiency of raw materials and ingredients with smart purchasing suggestions that factor in shelf life and supplier lead times
  • Automatically track shelf life for inventory planning and streamline warehouse logistics in the same system for minimal waste
  • Target costing for specific customers or products with pricing management tools enabled by actual costing data and inventory availability

Manufacturing Resource Planning Software Features

Icicle’s costing and production planning features provide cost predictions and real-time insights unique to your production, giving you full visibility of your business’s financial health. Designed specifically for the food industry, Icicle’s production planning and scheduling software helps you manage all the complexities of food and beverage manufacturing in one unified system.

Cost-based pricing is a pricing strategy that uses manufacturing costs to set the selling price of products. Having real-time visibility of costs, both direct and indirect, is key to effectively setting cost-based prices to maximize revenue while still incentivizing customers.

On the Production Interface, Icicle’s Projected Costing Pane takes into account real-time data on expenses across your entire business to estimate cost at completion of each unique production run in regards to labour and used materials. Your sales team can even see actual costs for current inventory when negotiating with customers, right from the Sales Order Interface.

Operational expenses, labour costs, and other indirect costs like manufacturing overhead costs are important to consider in the big picture of your production expenses. Icicle’s integrated system collects costing data across your entire business to drill down on expenses relating to inventory, facility, maintenance, labour and more that might otherwise be hidden.

For example, Icicle’s Maintenance Management features maximizes uptime by tracking maintenance activities and monitoring equipment for optimal performance and safety. Work Orders show accurate costing information for labour, suppliers, and overhead so you can make data-driven decisions about maintenance schedules, equipment upgrades, and other causes of production inefficiencies.

Icicle’s real-time production costing data isn’t limited to your regular production runs. Manufacturing Resource Planning Software delivers a high level of visibility into projected costing during product development, whether you’re trying to respond to supply chain issues, optimize existing products, or launch new ones. With the ability to gain insight on future costs from Icicle’s formula designer interface, Icicle helps you make data-informed decisions to enable innovation while still protecting your bottom line.

Instead of relying on cost estimations, average variable costs, or standard costing, Icicle allows you to plan ahead with actual production costing based on current inventory, labour, and other conditions that affect your manufacturing costs. The costs of raw materials and labour used for each production run are calculated and displayed per category, per unit cost, and as a grand total. Users can trend the data to obtain accurate costing estimates based on data unique to your business for superior production planning.

Icicle helps businesses stay ahead of supply chain issues rocking their inventory levels and disrupting production. The Smart Purchasing Suggestions feature ensures that inventory levels are always in balance to prevent waste but that you always have sufficient stock to meet planned production. These suggestions don’t just consider your inventory levels as a whole, but will update and send alerts whenever certain inventory gets allocated towards a future production or a customer places an order that pushes inventory levels below thresholds.

In order to take advantage of manufacturing resource planning software, food and beverage manufacturers also need their systems to factor in shelf life. Icicle’s MRP system includes robust inventory management tools that calculate best-before dates to optimize inventory stock management for longer shelf life and higher profit margins.

When allocating inventory towards future production runs or to ship out, Icicle will suggest items in FIFO (first-in-first-out) order to reduce waste and meet shelf-life requirements set by customers. Tracking inventory with shelf-life in mind can even help optimize product pricing by allowing you to sell products with longer shelf-life at a higher price.

Another tools in Icicle’s manufacturing resource planning system, the Sales Dashboard centralizes sales data and trends it over time, giving you a comprehensive overview of sales and pricing data. With real-time information about your sales patterns and growth rate, you can accurately forecast future sales and price products based on previous or projected performance. Even if supply chain disruptions cause diversions from past sales projections, Icicle gives you the agility and confidence to respond to market pressures when unforeseen circumstances come your way.

Best Practices for Product and Production Costing

Cost-based pricing isn’t as simple as determining your average variable cost of production and then marking up the price. There are many layers to identifying costs and their role on the net cost of your production runs. For example costs can be categorized into direct or indirect, and fixed and variable. Once costs are categorized, there are a variety of pricing strategies to choose from based on your cost management plan and financial goals.

We’ve compiled a list of industry resources to provide some insight on what sort of financial concepts and vocabulary you should know to better understand the costing data provided by manufacturing resource planning systems like Icicle ERP, and to make financial decisions with even more confidence.

Costing, different from your standard bookkeeping for financial reporting purposes, is crucial to determining profitability. However, according to the BDC, many businesses lack the proper costing systems to confidently make data-driven financial decisions. To establish a costing management plan, businesses should first define their cost object, the traceability of the cost object, its key drivers, and the costing method. It’s only after these factors are pinned down that manufacturers can identify how to capture and process manufacturing costs and leverage them for business decision-making.

Calculating future production costs is essential because it gives insight on profitable prices, reveals costing inefficiencies that could be reduced, creates a benchmark for comparison with competitors and helps set cost-based prices. However, calculating production costs for future production can be difficult without adequate historical data. This resource from Farm Credit Canada (FCC) explains the importance of knowing your variable and fixed costs with certainty in order to be able to make accurate predictions for the future.

Once you have determined your costs, how can you use them to set prices for your products in order to maximize profit? This resource for food and beverage manufacturers from PennState Extension says the first step is finding your break-even price as it relates to projected sales. Once the minimum price has been established, you can start considering things like customers, competition to choose the right pricing method for your business.

Choosing a pricing objective and strategy is essential for positioning your business for success in the market. Determining a pricing objective such as partial cost recovery, profit margin maximization, or quantity maximization will help you narrow down your pricing strategies. Another resource from PennState Extension, this guide helps you focus on answering the crucial questions about the products you are offering, evaluating your target markets and distribution strategies, understanding the lifecycle of your products, and identifying external pricing factors that may impact of your selling price formula (like regulatory requirements).

Financial literacy is crucial to understanding costs and how they integrate into the bigger financial status of your business. The Manufacturing Innovation Blog by the National Institute of Standards and Technology recommends beginning with your gross profit margin and understanding its role in driving profit and revenue. Some things to consider about your gross profit margin are the cost of goods sold, the net profit margin and pricing strategies. Other financial lingo like “benchmarking” and “day’s conversion to cash,” “debt ratios” and “EBITDA” are also handy references.

Icicle Resources to Optimize Manufacturing Costs

Check out these resources from the Icicle blog on optimizing product and manufacturing costs with advanced manufacturing resource planning software tools:

An Introduction to Mastering Profit Margin Formulas for Food Manufacturers

The most sustainable strategy to increase profit margins is by maintaining high quality standards amidst fierce competition and supply chain issues. Although there is a vast range of ways to maintain production quality, businesses should focus on reducing the small inefficiencies in their production that can accumulate into larger costs and result in slimmer profit margins.

Process automation with Icicle ERP provides the tools to streamline warehouse logistics, document employee training and more, allowing you to identify sources of inefficiencies, hit target costing and optimize your operating profit margin.

Maximizing Margins with Manufacturing Resource Planning Software

The key to thriving in the food and beverage industry is by having a strong system in place to support your costing strategies. This system needs to be able to track key metrics that holistically, provide the necessary data to make smart decisions to minimize costs, optimize operations, reduce waste, and increase profit.

Learn more here about the key metrics that leading food manufacturing companies track to promote business growth and profitability.

Pricing Management Tools and Techniques

How can you find the right recipe for profitability in the food industry? Icicle helps you achieve your target costing by monitoring key metrics to optimize inventory and reduce manufacturing waste. These articles show how Icicle’s manufacturing resource planning software tools fit together to deliver a comprehensive solution to food and beverage processors:

3 More Strategies to Scale Your Food Business’ Growth

How can you price your items to ensure sustainability and business growth? The key is to find a system that allows you to track metrics like inventory levels and sales growth to help you make data-driven business decisions while closely managing average variable costs and profitability.

Eliminate Food Waste with Icicle’s Food Costing and Inventory Software

Icicle’s real-time inventory management and production planning features act as a dynamic buffer, incorporating elements of lean manufacturing in order to eliminate inventory waste, while ensuring that you always have enough inventory on hand to complete planned production.

From the Icicle Blog