What Frozen Food Manufacturers need in an ERP

Introduction

While there are plenty of ERP options out there for manufacturers, most tend to be fairly generic to fit the needs of a variety of businesses. If you are an SME frozen food manufacturer, all options may appear reasonably promising but none of them might resonate with you.

The reason for that is frozen food manufacturing is unique and irrespective of how small your business might be, you need to ensure that the ERP you select supports the majority of your critical processes. Here are different frozen food segments whose business processes are typically similar. If you are one of them, read on to know more about the critical features you would require in an ERP:

  • Frozen specialty foods manufacturing: fruits and vegetables; meals; pizzas; frozen bakery products such as bread, waffles, and pancakes; gluten-free food items; snacks and bars; desserts; manufactured ice; ice creams
  • Frozen pet food manufacturing: raw meals, cooked meals, packaged frozen food, kitted products, re-packaged products

Most popular ERP systems such as Acumatica or Infor CloudSuite Industrial would probably provide the majority of the standard features. that may be enough for a ton of manufacturing companies. However, they typically are not sufficient for frozen food manufacturers as they have certain specific needs.

Process Manufacturing Management

While discrete ERP vendors might argue that there is not much of a difference between process or discrete manufacturing, if you asked a process manufacturing expert such as ElevatIQ, you will learn that process manufacturing differs significantly.

The biggest difference between process and discrete would be in the structure of their BOMs (bill of material or manufacturing). In the case of discrete, the UOMs (unit of measure) are simpler and the quantities of the materials don’t necessarily follow a dependency formula. Whereas in the case of process manufacturing, the formulation could be quite complex like a mathematical formula such as Z = 2X + Y where material Z is dependent upon the quantities of materials X and Y.

While discrete manufacturing has its own challenges, these challenges don’t exist in their case.



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Production Management

The process of manufacturing frozen food is complex. Similar to other F&B counterparts, you are likely to perform operations such as grinding/cutting, mixing, pouring, baking/cooking (if you are in the cooked-food segment), quality control, and packaging as part of your shop-floor operations. However, you may have additional steps such as blast-freezing, thawing, and temperature-controlled picking, packing, and shipping. These operations could pose unique operational challenges to frozen-food manufacturers such as long-standing processes due to blast freezing, segregation of batches on the production line, and etc.

The other production challenges could include having a two-step production process where part of the process is formulation-centric to prepare a batch of a base while the other part being packaging of the base in different product configurations, similar to discrete processes.

An ERP that can’t support both formulation and discrete processes simultaneously may not be sufficient for a frozen food manufacturer.

Lot-control and Expiry Date Management

While the lot-control feature is required in many industries, these requirements are unique for frozen food manufacturing due to the need for recall management as well as HACCP compliance.

There are very few ERP systems out there that would have features such as pre-assigned and intelligent lot numbers. If the pre-assigned lot numbers are not supported by the ERP system, your end-to-end traceability is likely to fail due to the mixing of batches or the manual tracking of lots on the production line. In addition, the manual process might require printing a temporary number (which may not be recognized in the system)–defeating your automation and traceability goals.

Most frozen food businesses also use a 3PL frozen storage facility as building the same capacity as part of the production site is challenging and expensive. Also, since the shipping of frozen raw materials is expensive, you might not be able to capitalize on vendor discounts if you solely relied on your internal warehouses. If your 3PL vendor allows you to use your ERP system for them to receive the goods, allocate lot numbers, and assign expiry date, one option could be to treat your 3PL warehouse as just another warehouse.

However, 3PL warehouses are typically large and it’s hard for them to accommodate preferences of every customer due to the training and management overhead.

Because of this issue, you require an ERP system that supports the 3PL processes natively and a consultant like ElevatIQ who understands this space deeply to help with these unique challenges.

Quality Management, Recall Management, and HACCP Compliance

If you plan to attain Hazard Analysis and Critical Control Points (HACCP) certification for your products, Food Safety Modernization Act (FSMA) requires you to develop and implement a HACCP plan to address food safety by analyzing and controlling several hazards including biological, chemical and physical.

The plan must be comprehensive to include all processes starting from the traceability of the origin of raw materials and their production, their procurement as well as handling, to production, distribution, and consumption of finished goods.

HACCP aims to minimize the negative consequences associated with the release of contaminated products to consumers as well as with their recall. This requires companies to incorporate thorough quality processes across the enterprise along with a material review board. HACCP also drives the need for detailed documentation due to audits and reporting.

Unless the ERP has an inbuilt quality management module designed to cater to the needs of frozen food business, comprehensive document management system to record, implement, and monitor standard operating procedures (SOPs), and supports both forward- and backward traceability to attain end-to-end traceability management goals, complying with HACCP is nearly impossible.

The solution must also support record keeping and electronic signatures if you may be carrying food and beverage products where you might need to comply with the FDA-compliant inspections.

Finally, HACCP requires your suppliers to be audited and the records to be maintained about their performance so that only the highest quality raw materials are consumed through the process. The ERP solution for frozen food must support audit and performance recording of suppliers.

Conclusion

In conclusion, process manufacturing is hard and frozen food manufacturing with the added burden of compliance is even harder. Having a consultant who has a mastery of the nuances of frozen food manufacturing and a system that supports your critical processes is vital to selecting the right ERP for your business and its successful implementation.

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