As a manufacturer in the food and beverage industry, you likely know the importance of inventory planning and demand forecasting in staying ahead of your competition. A proper planning and forecasting system allows you to meet changes in demand, while avoiding spoilage, improving order efficiency, managing recalls, and lowering downtime across all sectors of your operation.
Inventory planning software can offer features that either align with your company goals and industry practices or inhibit them. Keep these strategies for inventory management in mind when shopping for software.
Why is inventory management important?
Inventory management helps prevent overstocks and stock outs in any industry, especially in food and beverage manufacturing, since food loss alone accounts for $162 billion or more in lost retail revenue every year.
Ineffective management of your warehouses’ storage space can lead to ruined shipments and lost customers. Proper management leads, not only to less manufacturing waste, but also to improved customer satisfaction, since you will always have in-demand products in stock.
In the food and beverage industry, out-of-stock items have been known to cost manufacturers as much as 7.4% of their total revenue in a single fiscal year, not even counting the subsequent loss of customer loyalty. Yet, tracking expiration dates and forecasting demand is just a small part of effective inventory management.
Best strategies for planning and forecasting
To reap the benefits of an efficient system, inventory planning software should allow your business to plan and organize your stock, scan and track your orders, and forecast your customer’s needs with an improved version of your existing infrastructure.
Here are some strategies for achieving this:
#1 Inventory organization
Inventory organization is the start of an efficient fulfillment system. Use good storage practices, such as grouping products that are ordered together near each other, labeling everything, and keeping delivery and expiration dates visible.
Printing barcode labels and scanning them after receipt and shipment allows your inventory software to keep an updated tally of your ingredients, inventory, and ready-to-sell merchandise, reducing intake time and more easily identifying lost or stolen goods. Look for inventory software that can print and manage them.
#3 Optimize space
Proper planning requires optimized space in your warehouses, which in the food and beverage industry often means keeping stocks low to avoid spoilage, while trying to avoid dipping below the current demand and paying for stock outs.
#4 Use demand forecasting software
Keeping stocks low without running out of product entails keeping accurate product counts, using sales history to predict demand changes, and setting your repurchase rate on an automated schedule that bypasses your manual cycle counts.
#5 Expiration date tracking
In food and beverage, overstocks can not only waste valuable storage space – they can also cause expensive spoilage. Inventory planning software that uses lot ID tracking grouped by expiration date can help your fulfillment team get fresh products off the shelves before their time is up.
#7 Use the FIFO method
FIFO or “first in, first out” optimizes inventory storage and reduces downtime. The basic premise is to organize your inventory so that the oldest items are stored near the front of your shelves, and the newer items are at the back. This allows you to sell or ship the inventory nearest its expiration dates.
#8 Regular inventory updates
Automating your inventory updates in conjunction with barcoding allows you to always have up-to-date numbers to use in your forecasts.
#9 Account for seasonal demand
In food and beverage, every season differs in terms of product demand. Account for seasonal availability and demand in your planning software to structure your warehouses more efficiently for each season.
The takeaway for businesses
Inventory planning software comes with many benefits. Your food and beverage business may have felt the impact of the pandemic on demand trends, or may deal with spoilage and overstock on a daily basis. Conversely, you may just want a 21st-century update to your process to stay ahead of your competitors.
These strategies should help you find an inventory planning software solution that meets your needs in a changing industry. Don’t let a lack of the right tools stop your business from reaching its full potential.
If you are interested in learning how Fishbowl’s flexible inventory management solution can help your business now, you can book a demo.