Managing Supplier Risk in the Food and Beverage Industry

To be a food or beverage manufacturer is to face enormous amounts of risk. These are highly regulated industries in which the slightest mistake could actually cost customers their lives, and penalties for failing to comply with the law are jail time. On the less serious end of the spectrum, changes in customer demand are also a risk food and beverage manufacturers must navigate.

How can food and beverage suppliers manage their risk in a cost-effective, efficient manner? ERP systems and business intelligence (BI) solutions provide in-depth information about the entire supply chain so that you can stay agile and competitive.

ERP Systems: Helping You Achieve Regulatory Compliance

When it comes to regulatory bodies governing the food and beverage industry, there’s a virtual alphabet soup out there. Yes, you’re dealing with the FDA, but the FDA has a number of units that handle compliance certification, such as GMP, HAACP, and SQF, just to name a few. And they don’t all have the same rules, so just because you’re complying with one set of guidelines doesn’t mean you’re complying with all of them.

Here’s where an ERP system comes in: it reduces supplier risk in the food and beverage industry by enabling transparency. With an ERP system, you can track raw ingredients through every step of processing. That information allows you to create accurate ingredient lists that reflect everything in your product as well as include information about where and when the item was manufactured.

In the unfortunate (and hopefully highly unlikely) event of product contamination, suppliers can quickly check their ERP systems to determine where the problem arose. Armed with that information, they can issue a recall before the issue spirals out of control.

BI: Your Tool for Navigating the Changing Tide of Customer Demand

Take a second to think about the most recent trends in the food and beverage industry. Did anyone truly predict that kale was going to become a hit among consumers, or that they would suddenly develop an overwhelming desire for anything rose-colored?

A BI solution allows you to stay one step ahead of the competition by asking the right questions of your data. BI solutions help you manage risk in the food and beverage industry by answering such questions as, “What’s the best price at which to sell our product that enables us to remain profitable?” and “What packaging is most cost-effective yet appealing to consumers?”

Today’s BI solutions offer predictive analytics, which provide you with predictions about future events. Predictive analytics go beyond giving you answers about what happened last quarter; they can tell you what you can expect in the coming year so you can prepare now.

Managing risk in the food and beverage industry is a non-negotiable part of being in this space. However, risk management doesn’t have to be complicated, expensive, or burdensome. ERP systems and BI solutions make it easier to minimize risk while thriving in a competitive, ever-changing industry.

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