How to Choose the Top Food & Beverage ERP System

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With a world of possibilities and ERP options on the market, how can you identify the top ERP system to fit your operations? Shawn Windle, ERP expert, discusses the ins and outs of Food and Beverage ERPs to guide decision makers through the disruptive process of upgrading their business with the right ERP.


 
The Food & Beverage Industry

The Food & Beverage market has been driven to innovate its products for customer’s convenience but also to bring more value to their employee base with new technology.

Why Is There a Need for ERP in the Food & Beverage Industry?

The Food & Beverage industry is dynamic, forever changing according to trends, available resources, or compliance requirements. Employing the right ERP remains the cornerstone to success for Food & Beverage companies in the 21st century.

In recent years, eCommerce has expanded extensively within the food industry, with companies innovating technology solutions that enable food kit preparation, home delivery, and drive-up service. This is creating a market in need of practices to fit the omnichannel world. The right ERP can provide the technology infrastructure to enhance a company’s offerings.

Main Considerations When You Need an ERP

There are four major considerations to evaluate if your company is considering implementing an ERP.

What Do You Need?

First, understand that the ERP is not going to be based solely upon your industry, but on what your organization needs. Different businesses require help and automation in different departments, so it is important to perform analysis to determine exactly what you need. Common issues faced in the Food & Beverage industry are outlined here.

Supply Chain & Logistics Management

ERPs ease documentation of the logistics involved in producing finished goods. Food companies need to track end-to-end production management to ensure consistency and quality. No consumer wants to receive a product that does not deliver on the promises made at the time of purchase, as this hurts reputation and ultimately future sales. Also, customer satisfaction goes down when orders cannot be filled in a timely manner.

Consumer Safety & Compliance

Unfortunately, issues can arise and open the door to recalls, or health and safety organizations can make changes to their policies, requiring changes in operation processes. ERPs, when used properly, can ensure that your processes and packaging are in compliance. These tools cut down on costs and detrimental mistakes.

Food & Beverage companies must consider compliance for many entities, including the FDA and OSHA. Leaders must evaluate compliance not only for the products that they are producing but also for the work conditions they are providing to employees. The right ERP can document the business’ compliance with various regulations.

Lot traceability is another essential function required of Food and Beverage ERP solutions. In compliance with different health organizations, companies need to be aware of the product lifecycle from creation to distribution. If there is a recall or public health concern, manufacturers need to be able to track the tainted products and ensure all traces are removed from the public quickly and accurately. Without lot traceability, manufacturers put unnecessary risk on their business.

Accounting & Forecasting

More sophisticated accounting software ensures proper controls and reduces reliance on spreadsheets thereby reducing manual errors and improving accounting back-office productivity. This frees up accounting staff to provide more value-add services across the organization in the way of timely financial reports, budgets, and forecasts. In an industry with perishable goods, companies do not want to order more inventory than necessary; therefore, forecasting is essential to increasing profit margins by removing wasteful spending.

Labeling

In the age of health-conscious consumers and more sensitivities to food than ever, labeling has increased in importance. ERP can assist in the production of labels to effectively include all allergens and serving sizes. Consumers are reading labels to be informed about what they are putting in their bodies, opting to avoid products that contain confusing or unclear labels. The right ERP can help companies increase business through label transparency.

Size of Your Company

ERPs are separated into 4 tiers based on the size of the organization. Leaders must know the true size of their company so that they are not spending money on systems with more than they need or purchasing a system that will never meet their necessary requirements.

Processes Needing to Be Automated

Your needs, based on your initial needs analysis, will determine the direction your company will need to go with its ERP system. Vendors all have different offerings, none of which are one size fits all. Understand what processes need to be automated and which do not form a more seamless process.

What Platform Will You Use?

In earlier times, platforms were all on-premise, giving businesses immediate access to their system and data. Now, the trend is moving towards cloud platform solutions. Each platform has benefits and risks associated with its operations, so it is important that leaders consider all possibilities to ensure the success of their projects. To learn more about cloud-based ERPs, read our blog, A Definitive Guide to Cloud ERP Solutions.

Warning Signs to Look for as Your Company Grows

Even if an ERP upgrade or implementation is not on a company’s radar, leadership and employees must look out for signs that their current system is failing them or at least be aware of them.

Overloading & Bogging Down Your System

Many times, high activity can slow down a system and cause issues including crashes if the system is too small to handle the company’s transaction volume. In these situations, the wrong system can negatively affect a business’ ability to operate. Slow processes will create unsatisfied customers and tank the business in the long run.

Growth Can Mean More Competition

As a business grows, it can expand into markets with large-scale competitors who have already nailed down processes to increase efficiency. When one is able to finally break into those markets, they will need to a proper ERP system to optimize their operations and maximize profits. This is essential to remaining competitive.

Conclusion

A general rule of thumb is to never upgrade or implement an ERP system unless it is absolutely necessary. The right ERP can accelerate a business into success, but only if a company knows what they need and has the resources to put into the project’s success. Considering the ever-changing landscape of the Food & Beverage industry, a carefully selected ERP can increase profits while reducing errors and expenses.

 

 

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Juliette: Good afternoon everyone.

Thank you for joining us for today's webinar: How to Choose the Top Food and Beverage ERP System.

Shawn Windle is our speaker for today. Shawn is the founder and managing principal of ERP Advisors Group based in Denver, CO. Shawn has over 20 years of experience in the enterprise software industry, helping hundreds of clients across many industries with selecting and implementing a wide variety of enterprise solutions.

His podcast the ERP Advisor has dozens of episodes with thousands of downloads and is featured on prominent podcast platforms such as Apple and Spotify.

On today's call, Shawn will discuss the ins and outs of food and beverage ERPs to guide decision makers through the disruptive process of upgrading their business with the right ERP. Welcome Shawn. Thanks so much for joining me today.

Oh Shawn, I think you might be on mute.

Shawn Windle: Just kidding.

Good to see you. Thanks for having me.

Juliette: Yes, as always, my gosh.

So, the food and beverage industry can be quite complex. I mean, honestly, from operations and production to customers purchasing products to simply going out to eat at a restaurant. Food and beverage businesses are always trying to look for ways to improve their processes from production efficiency to their bottom line. Fine, so with that Shawn, I'm going to ask you firstly, high level, if you can share with those joining us today the ins and outs of food and beverage ERP's and what the basics that these ERP systems typically cover for this industry.

Shawn Windle: Sure, yeah. I think a good place to start, like you said, the challenges are quite large for this particular industry.

You're kind of in the bottom right of my screen, but I should look up. So, I'm going to see if I can move you up some. Oh, I just moved you up great, great.

Juliette: OK.

Shawn Windle: All right. So, if you think about the food and beverage industry, we can start with just food and beverage, there are very similar requirements for food companies and similar requirements for beverage companies.

But there are some differences there too, right?

And then you go down one more level and oh, it's a food company. Well, what kind of food company? If you think about it there's a whole value chain of organizations that do a whole bunch of different things and this is the secret to the whole thing here, I'm going to give it away in the first 4 minutes.

Who are you as an organization?

And I know this is going to sound very familiar to you in terms of “well, what are your needs,” but if you think about it, you may have an ingredients company on my far left. If we did a little diagram and we would show that there's companies that make ingredients that go into food products.

Now sometimes those companies also make food grade ingredients that go into other products, interestingly enough. It might be a flavor or a fragrance that goes into a construction product, for instance. So, the ingredients companies are making, usually, it almost looks like chemicals manufacturing more than anything, or coatings, and that kind of thing.

Then you might go to, say, an organization that's sort of like a baker, where they're putting together multiple raw ingredients to have a product. It could be a beverage company that's mixing ingredients to have a beverage. It could be a food company.

What about a firm or company that sells tomatoes or produce, right? That's a raw ingredient, and that has a whole lifecycle of its and inventory controls that are really complex. Like how do you manage a tomato? How much inventories of tomato? We have five tomatoes or 5,000,000. What's the state of the tomato? There's probably 20 different states if you think about the life cycle of a tomato and organizations that are in that business, they have to track exactly what state the inventories in.

So, so then let's continue with say, like a baker. Now the Baker has a finished product, right? It may also, then—let me actually kind of take one more deviation too.

There are also meat companies so beef companies, there's also seafood companies, there's also whatever kinds of products when you think about food.

If you think about what's on your dinner table at night or at the restaurant. There's all kinds of things that could be there so you sort of have to say, “OK. What is this?”

That is sort of like, we take ingredients or we make ingredients and we mix them. We make a batch and then we have a product that then needs to get packaged and then sold to maybe a distributor who then may repackage your packaging and then sells it to a, say, a retailer like a grocery store and then sells that to a consumer. You know, the value chain looks like that.

Versus a produce company and they grow lettuce. The lettuce may end up finally into again, a bag that, uh, a consumer buys, or it might be a product that a business binds, and it may go through a couple of different distributors between the time it goes from the farm to the table. So that's a lot of confusion and a lot of value chains that I just sort of mixed together, but you have to sort of separate those out and look at each stage to see where your business process issues are for real.

What can software solve? Can software solve climate issues? No we can't. Although we are seeing some software vendors start to take more responsibility for that. If you think about the data centers around the world, it's a lot of juice, right? So what are they doing?

That's a different story. For another call, maybe later. Another call.

But the bottom line is, as a food and beverage company, when you start looking at ERP we really have to be specific about what we are trying to solve with here, but that's no different than anything we've talked about, right?

Juliette: Right, needs analysis is the first thing you have to do to find out what your business is all about. I mean otherwise how do you know which ERP to pick? Because there's a million as we know, right?

Shawn Windle: Right exactly

Juliette: Yeah, so with that, is there more of a generic ERP that fits this industry or they're more industry specific, type software platforms for each business? Is there a one size fits all?

Shawn Windle: Oh, definitely not and the way I would look at the market—Rebekah, this might be a good blog as I see her picture there—Probably from, kind of, a fourfold perspective.

You know one is, let's say, that a food and beverage company is having a really hard time with managing its expenses. A procure-to-pay solution may work for them if it's procure-to-pay, we can use any procure-to-pay solution. It doesn't have to be specific to food.

That or if it’s taking us forever to close the books. OK, well maybe an accounting solution, a financial reporting and analysis or a month enclosed solution will work. That's all industry independent. It's not dependent on the food and beverage industry, so that's the first thing you have to start to take a look at.

Then the second thing you have to look at is your company size. So let's say, one of our clients that we're working with recently, let's say they’re 100 million in revenue approximately and they have plans to go about 15-20% growth each year. It's quite a bit so in five years double, maybe even go bigger, maybe there's some acquisitions.

Whatever it is, that mid-size organization there are mid-size ERP solutions for food and bevs and those are those are good solutions that are in the market. They have very specific functionality for sure, and they're specific to food and beverage companies—Midsize food and beverage companies.

Along with that same sort of second dimension of sizes, they might be a lot larger, right? They might be a half a billion or a billion-dollar company on their way to even more growth, at which point you have to look at a Tier One solution like a manufacturing solution that focuses on food and beverage, if it is more of a producer, even a distributor model, and that's where SAP and some of the other bigger ones come in with those industry specific solutions, and even some implementation partners focus in that area so size is definitely the second criteria.

I'd say the third one is, again, what are the processes that we're looking to automate in the software? So, if we're looking at warehouse management for perishable products with lot control and traceability that we have to have, well, there are the solutions for that versus a produce company that's looking at just inventory control out in the field, and being able to see exactly what the status is of product and what the available promise of readiness is.

So, there's those business process issues that we have to look at. Then I would say the fourth thing, that often gets lost, is what's the platform that we want for the long-term strategy of the organization because—every food and beverage company we've worked with, I have to really think about this, from cattle, shrimp, bakery, to ingredients, to some produce, some others, except for one of those was coming off a custom system.

Juliette: Oh, interesting.

Shawn Windle: It's really interesting. Unlike other verticals or industries that we work with that are coming off of, maybe an old Sage product or Mass 200 or 500, or an old SAP, or Oracle E Business suite, or whatever, in the food and beverage industry, typically the legacy companies they've been around for a while, they're coming off of old legacy platforms. Usually custom written AS 400, and that's across the board. Literally every single one of them. One of them was written on a Unix platform. Which is a little newer than a than AS 400. Not to say that those platforms aren't bad. I don't want any complaints about that. There's benefits to all of them, but the bottom line is, that I think traditionally food and bath companies have had pretty complex requirements and so the owner's brother uncle wrote a solution and voila, that's what they grew the business on.

Now they're growing. They're getting bigger. They're seeing a lot more advertising from companies from ERP, food and beverage companies like, “Hey, this might work for us,” and it will. The solutions in the market today can meet the requirements that those legacy apps were written for in the past. Plus you get a lot more of the you know cloud base, if you want cloud. Remote capabilities with mobility, you know, more secure kind of solutions, better reporting and analytics.

So, a lot of these firms coming off these old platforms just benefit from coming onto a newer platform. Not to mention your brother’s uncle’s cousin who wrote it is maybe getting a little bit up there in age and thinking about, you know retiring and not having to deal with all your issues and your systems every day. So, anyway those are just a couple things.

Juliette: So, considering that there are so many moving parts, and no two businesses are the same if they move from these custom platforms and go to a newer more cloud-type platform, are they able to get that same type of customization that they need that they currently have?

Shawn Windle: Great question and the answer usually is no.

So we're with a client right now, and when they want a very custom report, they call up Mr. Custom Report Guy who is on the payroll for, you know, a fixed fee of a lot of money. He writes a report because that's his job. His job is to build out those customizations. So it's interesting that we would go in this direction with this food and bev because, again, I think that the history in this industry has been that there haven't been very good solutions.

So, innovative companies in the food and beverage industry have said, “Whatever, I'm just going to go write my own or I'm willing to take a product that's pretty close and maybe customize it or I'm going to take something that is sort of process manufacturing based so it doesn't deal with discrete—It deals with recipes and yields and that kind of thing—And I'm just going to live with it. Everything else, like my R&D and quality and lots and labels, I'm going to get from some other systems so we get a hodgepodge of systems.” So, I do think probably in the last, I mean definitely 10 years because I think the food and beverage ERP market has come down market so that an organization that's you know 10-15 million in revenue and beyond can get a pretty fast ROI and switching to a food and beverage ERP. Whereas years before that, when I was at JD Edwards we had a food and beverage solution, but I'm not totally sure that it was, you know, really, that great because that particular product was written for more discrete manufacturing.

Of the discrete manufacturing solutions today, European solutions have written a process pack where they've written, “Hey, we can handle process manufacturing,” but innately it's sort of a different flow to it, so it's super interesting.

Juliette: Right, well considering an ERP system for a food and beverage like how does it impact a certain business with their work that they do with customers and vendors? Is that something that they should consider when picking a new ERP system?

Shawn Windle: Oh God yeah. I mean of all of our industries, it's more important to understand. Then the vendor side electronic data interchange. I'm not talking EDI, I'm talking about things like lot traceability, ingredient information that your supplier needs to pass to you, and there's industry specific solutions that can help with that.

So, let's say you're buying a specific syrup for a product that you mix in with some flour and some other things to come up with a scone, for instance. Well, the company that sells you the syrup, they have to give you all the ingredients they used in the syrup, and they have to give you the lots of the ingredients that they use specific for that batch that came to you. So, that data has to come over.

Again, there are some industry specific solutions that that do that data share really, really well, but without that, let's say your scone gets sold to Costco and everybody buys the Costco scones. Then they're gone like the next day and you're like, “Costco, you broke my heart again. Where's that product that I love? Why don't you have it anymore?”

We've all been there, right?

Juliette: Right, we've all been there.

Shawn Windle: Yeah, there's a specific cracker that we get that I just know there's going to be a day.

Juliette: Yeah you go and it's not going to be there anymore.

Shawn Windle: It's not going to be there, so we always buy 6 boxes. And Erica is like, “Don't buy all the crackers,” and I'm like, “Oh my God. They're not gonna be you by. The toilet Paper I'll get the crackers. It’s a different time we've all had to get desperate, haven't we?

But that so that vendor information about their raw ingredients, right? If you're a discrete manufacturer, maybe you need some serial numbers, or you need some specifics for high tech electronics manufacturing, but you don't need that level of information. Don't, so that's huge on the vendor side and then you on the customer side are the vendor to the customer who needs that exact information for you so.

Let's say you are a shrimp distributor, or maybe you do some value-added services over shrimp. You buy a bunch of shrimp, you cut it up a little bit, or you repackage it. Not only do you have to track the raw ingredients that you use, there might be shrimp, there might be salt, some other chemicals that go into it, also need to track the packaging that you used, and the lots had some kind of unique identifier on the packaging. You also have to track what machines you used. You also have to track the cleaning and the hygiene that was done on the machines that was appropriate. Sometimes you even have to track the employees and their skill set and certifications that worked on these things.

So, the most interesting thing to me about the food and bev industry is the barriers to entry are so high because who can afford to do all of this processing and capture of data and compliance and regulatory and everything else?

So I mean, that's why we see a lot of food companies—there's one in Colorado recently we talked—but basically most of these kind of newer food types that come on the market, they'll use what's called a copacker. So, somebody else is responsible for taking the ingredients, tracking raw materials, safety information, doing the processing, putting together the final product, putting it into a package, and then sending it out. So those guys are the ones that have all the safety and regulatory requirements, whereas more of a marketing or branding company or they come up with the ingredients or the recipe. Companies don't have that responsibility, but again, they're depending on these copackers. If the copacker screws up—they're dead, I mean literally.

Juliette: So with that, let me ask you. There are two different companies. Does their ERP ever overlap because they're working together on the same product, but they're two separate companies? Is that even possible?

Shawn Windle: Well, if you think about it like this, let's say—especially in Colorado, we have a lot of companies that are like this—where somebody gets a great idea. Maybe they make something in their kitchen or a little bit more than that, a little more industrial, and the product starts to get a lot of headway in the market and people want more of it. So they go to a copacker.

They give the copacker the recipe and then they set the specifications on what the product needs to be as well as even the packaging and the food company may even buy all the raw ingredients, they might not. They might not grab by the packaging, they may, it just depends on the business deal. Basically, we're out there outsourcing that manufacturing and processing and safety data sheets and regulatory to another firm who maintains all that. So our systems are for if we're creating the brand of the product, we may have an ingredient system which would be in like a product lifecycle management system. We may even have a lab with people that kind of do a little bit of experimentation with products, and all that. Then they say, “OK, this is the recipe.” They send the recipe to the copacker, and then then Copacker would do the manufacturing at that point, and there that Co Packer would track all the manufacturing information. No one has finished product, they send it back to us, as the food company, so we have it and it's available, or we at least have access to their information.

I mean, that's just one model. It could be the opposite. You're the copacker, who has 50 companies that you make stuff for and all 50 of them have different ingredient requirements and you have to keep all that straight. They have different recipes.

We had one situation where we had a client. They had one customer that they sold to, but that customer had five or six different copackers and each of the copackers had different recipe requirements for whatever reasons. So this is why there are solutions in the market. I think Netsuite has done this. I think Infor has done this. Where they have food and bev specific functionality, which is pretty good and they may rely on a third-party solution for safety. Maybe they don't go that deep, fine, but when you start talking about these really, really complex scenarios, you've got to be sure that you're getting an application that can actually support it because you're just not a food and bev solution.

I don't care what anybody says. You've got to go this level to say what are your scenario? What are you trying to automate? What data do you have to have? What systems do you need to integrate with?

The solutions that are available in the market just start to dwindle to just a couple that can actually do your requirements.

Juliette: With that, how can the right ERP help manufacturers navigate the 21st century food and beverage market as it is today? Can you speak to us with that?

Shawn Windle: Oh for sure, for sure, and it kind of goes back to what I said earlier that a lot of the food and bev companies coming out of, you know the 2000s-2010's were on legacy systems which—and they were probably writing a lot of stuff down on paper somewhere. Every client we've been in, that's what we've see. They are tracking the information, they wouldn't be in business if they didn't do that, but the way they're tracking it is putting a lot of work on their people, and it's a little bit risky, but they've been OK, they're going to be OK, or they wouldn't be in business today. So, that's what I think the biggest opportunity with these ERP's is. Not only does the compliance and the safety do we feel, but we better about it as owners at the end of the night, or literally every night.

You can sleep better knowing that at least the information is being put in the system, but ultimately you've got people that are out there doing a lot of manual stuff. You could sort of layer in this job market that they weren't. We're in these days where it's tough to find good people and retain good people, and so there's a little bit of a morale boost that some of these organizations get.

Especially on the food producer side, where people are doing manual stuff and see they know they know the risk. The individuals do and I think specific to our clients and the firms we've worked with we're pretty lucky. Our clients are like the best on the planet. I love them and do anything for them honestly and they usually have great cultures and they are really, really empowering other people and they know that their people are really making it go right they in and day out with these tools.

So when those people start to see what the automation can be, if it's done right, they love it. They're super happy, more productive, and we get them out of writing down the lot number to either doing barcode scanning or we're even doing some blockchain stuff with some customers where we're pulling data in and it's uniquely identified throughout the life cycle of the product where that basic stuff is done. Now you can get a compounder who's been trying to put these recipes together correctly and making sure they get the right weights and the right ingredients in the right format and the right process. So now they're starting to do things and thinking about things in a whole different way. The innovation can go up and the morale can go up with that, and the productivity can go up too.

I think that's the last thing I would say on this question too, yet full of all kinds of good information today is I think the reason why we love working with food and beverage companies is because they are very innovative. They really have to be where they are constantly looking at new products, their customers are pushing them for new price, products the vendors are giving them new products and so you know they could be doing bread in doing bread for years and years and then a customer says you know we love your bread.

We love working with you guys we want you guys to put together a muffin. We'll figure it out, or indeed start working on it. Get the lab out, start putting together some muffin recipes, put together some samples, send it to the customer.

Oh my gosh, one of our clients did that and did very, very, very, very well with kind of an innovative product. A dessert product that was just fantastic. They were able to be very responsive. They had a pretty good ERP in place. And they were able to innovate and that's what's cool is you see that the innovation can go up.

Innovation can go up for many reasons, not just ERP, but once you go through the heartache and pain of moving recipes, moving all your compliance, getting your SDS is all that stuff over that are the safety data sheets. You can actually then start taking the business to a whole new level which is super exciting.

Juliette: Right, you can have a tried-and-true product, but still need to be relevant and competitive in the market.

Shawn Windle: Oh my God, I mean, that's the thing.

Juliette: Especially nowadays.

Shawn Windle: I mean, all of our clients are in very competitive environments, but these food and bev companies like you know, Joe Schmo puts together or whatever new peanut butter, whatever it is, or a new bread or dream or whatever that pops up.

You know, there's a new kind of--

Juliette: A cracker.

Shawn Windle: Yes, it's crazy. So yeah, new crackers, whatever it is and they just root. Can take the market so fast, So, I do think it's really risky doing ERP anyway. We've talked about that until we're red in the face. If food is—especially in beverages--is especially risky because of the regulatory side for sure. You have so much data that you have to move over the usual blah blah blah that we say about data migration, but getting that level of process automation that you can get from, again, a cloud-based ERP, that's great and prevalent in the market. Then layer in that process manufacturing. Then layer in the food safety the labeling compliance, R&D, and the product lifecycle management. It's like it's like a whole new game, and that's cool. That's where it starts to make a lot of sense.

Juliette: Well, these manufacturing type businesses are there specific features that they should consider with their new ERP system?

Shawn Windle: Yeah, well without a doubt and there's probably 5 areas I would say there's definitely sort of demand planning and materials requirements, Planning, MRP, and depending on how sophisticated and big the company is, then you'd split those out, maybe you can kind of push them together. Being able to plan with ingredients that go into your product, as a producer, can save you a ton of money on purchasing volume. Doing minimum order quantities, getting more, sort of, planning and scheduling and just being more proactive with your business. That's definitely the first part.

For sure the R&D side of putting together different kinds of recipes and trying different things or sampling and all that. Getting through that, that product lifecycle management process is huge for sure, and there's lots of solutions on the market that do that, but where they fail is in the integration with the ERP, but that's the second thing I'd say is that PLM into like a manufacturing order. So, getting that process streamlined is a huge benefit. So, R&D makes a change. Manufacturing gets it, they do it. Vice versa. They can communicate back and say, “Hey, we're seeing this.” Huge benefits there for sure.

The third one is kind of interesting because I think a lot of software sales people, frankly, will sell manufacturing kind of execution systems or shopfloor management ad there are definite benefits there to integrating scales into your manufacturing order, so that you're actually seeing the quantities to go into the order, that's beneficial.

But tracking somebody’s time it's not so beneficial. So, there's a level of control on the shop floor that I think you want to put in for sure. But it's not like wow, let's automate everything. There are some environments where it totally makes sense, where all the people come in, “OK, we're going to charge our time now to this process—especially those that pack We've got this size of a bag of lettuce and that’s how it comes into us or there's boxes. Now we need to put them in these bags. Now start OK everybody charge their time and you know, let's do this now. End OK, now we have actual time.”

Standard costs can help with that, but how do you do standard costs if you don't have the actual time captured somewhere? So, manufacturing execution for sure, maybe just not to the depth of “hey, let's automate everything and have robots do this.” That's not going to work right, but fine QC unequivocally, absolutely, positively. Having all the data come to QC, all the regulatory information from our manufacturers being able to bring all that together to show what tests we did, all the steps that were done, all certifications signed off all in one place. Hallelujah, like literally, that is the Hallelujah step.

And then I would say the fifth thing is—I actually have three more, but I'm trying to think of the most important—but probably the fifth thing is I think the whole sort of customer vendor data flow with—there are some EDI opportunities, which is getting based transactions back and forth. Even if it's sending an advanced ship notice, once your carrier picks up the product, send that ASN over to Costco so they know Costco, Walmart, and Kroger. Those guys are demanding that stuff already, so a lot of our clients are doing that, but when you look at that, that ability to look at the whole ecosystem or the value chain from customers and vendors and sharing that electronic data with all those base transactions and it does get pretty exciting. There are just a lot more opportunities to kind of collaborate more closely with your partners.

Juliette: So, Shawn, as a business grows, are there some warning signs that they should look at that would be an indicator that they need or should look for a new ERP system?

Shawn Windle: Yeah, that's a great question.

Well, the first one, again just based off our experience is legacy developer getting old because not only is the business growing, but it's maturing over time. That's the first one for sure. You've got to watch out for that.

Probably the second thing is the amount of volume is going up. That's where we really see with clients like, “OK you could kind of get away with all the manual stuff when you were half the size. Now you've got twice as much you're doing before and you know your people are what's holding it together and the people are great, but we've got to get them some tools” So, when volume starts to really increase—and you'll know—you can go out and start talking to your best people and you say to them, “What keeps you up at night?” And you listen to what they say and they're probably going to say a lot of manual stuff—It's not, “I'm trying to come up with this new recipe” or “I'm trying to figure out how to make things more or better, whatever.” No, it's like, “We had this order. We had a customer complaint or we had to quarantine some things because of somebody got sick.”

We barely found the information for it. But we did, we did, but we barely did. I don't want that to happen again.

As a sponsor—somebody who's going to be interested in this ERP—those are the things that you have to look out for and it's like, “OK, I get it now. This is why we have to move to better systems.”

“The systems solve everything.” Of course not, but they help you and they help you a lot more. Then you’re relying less on these key people for that kind of thing. That's probably the biggest indicator I'd say.

Juliette: So, say a business, they decide they need a new software, they select one, they implement it. Can you talk to what they can expect both long and short term once they have a new system in place? How can it benefit them?

Shawn Windle: Yeah, well, I think the benefits we've talked a lot about, but what I think is interesting is—we sort of call it the Phase One syndrome. There's a Phase One Implementation meaning—ERP fatigue we've all heard that before—you have to go through all this effort, “What do we need and what's the right solution in contracting, then implementing, then data, and everything goes live, and now we have a system.”

That's the Phase One and that probably automates 20% of what's possible. So over time, you've got a platform now that you can evolve. Frankly some of our clients, that's all they ever do. That's totally fine, but some of our more innovative clients. They're more interested in “How do we get to that next level of advanced planning?” and “scheduling where we really can take advantage of the demand planning tools that we have in the MRP” and we can look at capacity planning and scheduling by different lines because some of the food processors do the same thing over and over, but many of them have different processes that they take the ingredients through that the recipe calls for heating, or cooling, or evaporation, or separation, or all kinds of things. So, then how do we maximize the usage of not just our people but also these assets and the ingredients?

So that's kind of that next level. Then, I think the ultimate level is really around manufacturing automation. So, using more robots and tying that data even into the ERP so that we can see how temperatures are increasing and decreasing based off of our recipes and what the yields are from that. So, you can see how you get more real time information from production, build that in with inventory and vendor information. Do we have certain vendors whose products don't do as well on our manufacturing process as others? I mean, there's key people running around that know that unequivocally, but to know that and start identifying that from--it's kind of that artificial intelligence, yadda yadda, stuff, but it's kind of true because you have the base transactions.

Now the more we machine sort of the floor, those machines kick out a ton of data, it's called SCADA. It's information that pops out of these manufacturing systems that somebody is already maintaining. Then we can sort of bring that together to make some really interesting decisions.

Of course, there's information from our customers that we could bring in too, to make better decisions about making more real time visibility with vendors. We've been I've been talking about that for 25 years, but you see how you get kind of these core—safety is solved, lot traceability no problem, we got a recall. We handled it fine. Remember these guys get audited like nobody else. They've got auditors that are coming in, especially if they do things like certified organic or kosher challah. Whatever the different types are.

So, you know we got to meet all those regulatory requirements. We say regulatory--just OSHA or whatever, but all of our FDA—all those things. Once those are solved, then you could get into some really cool things that are just really interesting from a whole new level of performance.

Juliette: Well Shawn, we had a comment come in here, and SCADA is Supervisory Control and Data Acquisition. So, thank you for that.

So, we had a question come in from someone joining us today. What do you think of Netsuite's food and beverage solution? We are implementing it for many different firms in this industry.

Shawn Windle: Oh sure, yeah, yeah. So you know, this isn't the time where we get into specific apps, but I can answer that question a little bit. The bottom line is I think it's a good solution for some companies, but you can say that for everybody, so I'm sort of punting a little bit again.

The key thing is if a company understands their requirements in and out, and you can look at the NetSuite solution where it's good and where it's not right, NetSuite has many industries that, in its services, I think we've implemented all of them. Literally, including food and bev on NetSuite for a couple of different clients have done great, but they both required labeling and food safety systems that sat outside the apps.

Now again, that's common, but can SFP meet some of those requirements maybe a little bit better? Yeah, but for a little bit higher implementation costs. So, there's a tradeoff in all the solutions. I think it's a great solution, for sure.

We've had great success with some of our food and beverage clients, for sure, but there are other solutions in the market that are a little more focused on just that industry, and you should take a look at those also. Aptean comes to mind, Process Pro actually now is owned by Aptean, Batchmaster which does some work with Acumatica. There's other solutions out there as well. I mean they're all good. That's why they're at that level. There's a lot of other solutions. Interestingly, I think for a seafood distributor we sort of did a whole—we cast a net for like all the seafood distribution ERP's in the market and there were like 50. Tons of them. Tons and tons and tons. You know, there was a guy who used to be a lobster fisherman out of Maine who wrote an app.

So, you know you really have to sort of look at the industry, understand the requirements, look at the solutions that are in the marketplace, and then certainly find the right one.

One of the benefits of NetSuite though, is that it is widely supported. You have partners that—you know, your partner implementation goes great, but then they go out of business or get bought and you don't like the new owner, that’s fine. Go to another NetSuite partner because that product is really well suited so that's probably a big differentiator, I’d say.

Juliette: Well, as we started with, that's where your needs analysis would come in to help you decide what you needed and help you select the platform that fits your needs.

So, I think we're coming to the end of our time today, but as we wrap up, can you leave us with a piece of advice for the food and beverage industry and finding the right ERP to fit needs?

Shawn Windle: Yeah, yeah, I guess in my career after doing this for a long time, I do see, unlike other industries, there have been solutions for this space for a long time, but I just think there's more of an uptake for food and bev companies of all kinds, like I described earlier, to actually look at new solutions now.

Whether it's the move to the cloud, the original developer being in a position where they're not able to support the app, or the customers asking these companies for more innovation or the regulatory requirements are increasing, they're looking for software they're looking for automation solutions for sure.

So, you really just again want to make really, really certain. I mean again, you could say this for everybody, but especially in this industry, that you really understand what's real in the solution and what's not, and really understand what the vendor is going to provide and what isn't.

If they rely on 3rd party solutions, like a lot of the mid tiers do, well who's responsible for that? What happens if the other vendor changes something, or what happens if the other vendor changes something? Who's going to maintain that?

So don't just think this is like going out and buying a car and you take it to the shop to get it fixed. These are complex solutions that you really need to think through, because you may have, like I said earlier, a labeling solution. You may have a warehouse management solution. You may have a safety solution. You may have a separate purchasing or even just an ERP solution. That's one of our distributors—a food distributor has five different types of applications. I think they have a QC system that's specific. So, you have to have an IT department that supports all those.

So, of all of that, the verticals or the industries that we work with. This one in particular. We love working with them, but you have to think through that long-term support of whatever solution you go out and buy in the market. What's this really going to look like in five years? What are some of the challenges we can have? That's totally fine. All of them have challenges. Just make sure you have the plans and resources in place.

Juliette: Shawn, thank you as always for sharing so much great information and thank you everyone for joining us for today's webinar. Please let us know if you have any questions. We're happy to answer any questions you have, happy to help in any way we can.

Be sure to join us. For our next webinar scheduled for Thursday, May 12th: Best ERP Strategies for Natural Resource Companies. We will cover how natural resource companies can leverage their software solutions to satisfy requirements throughout the lifecycle of their oil and gas, mining, solar, and other natural resource companies. Please go to our website erpadvisorsgroup.com for more details and to register.

ERP Advisors group is one of the country's top independent enterprise software advisory firms. ERP Advisors Group advises mid to large sized businesses on selecting and implementing business applications from enterprise resource planning, customer relationship management, human capital management, business intelligence, and other enterprise applications which equates to millions of dollars in software deals each year across many industries.

This has been the ERP Advisor. Thank you again for joining us.

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