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How Purpose-Built Food and Beverage Software Facilitates Working with Contract Manufacturers
How Purpose-Built Food and Beverage Software Facilitates Working with Contract Manufacturers
Nov 8, 2022John McCurdy
“Flexibility is the key to stability.”
This quote, attributed to basketball coaching icon John Wooden, rings true for individuals but is particularly relevant for businesses in this “new normal” era that has come about post-pandemic. Supply chain disruptions, labor shortages, rising costs and geopolitical shifts all require modern commercial operations to stay on their proverbial toes to navigate this dynamic environment.
One of the top methods that food and beverage companies use to unlock the additional adaptability they need is through contract manufacturing. Also known as outsourcing, this practice is becoming more popular over time, which makes sense considering it allows organizations to focus on their strengths and sharpen key differentiators while relying on an external partner to produce the finished goods.
For proof, consider that contract manufacturing has grown at a compound annual growth rate (CAGR) of 11.9% over the past five years, which is two to four times faster than the industries it supports. What’s more, a poll of food and beverage businesses conducted by consulting firm Grant Thornton indicated that nearly two-thirds outsource at least some of their production.
Of course, that’s not to say working with contract manufacturers is a simple matter and the right call in every situation. As indicated in the IDC Global Food and Beverage Industry Trends whitepaper commissioned by Aptean, food and beverage companies have several common reservations when considering the strategy, the top two being less control over product quality and traceability concerns.
So, what steps must an organization like yours take in order to increase the chances of finding success with the contract manufacturing model? A robust suite of purpose-built software is the answer, and there are four key ways in which Aptean’s solution ecosystem can optimize your efforts in leveraging outsourcing opportunities.
1. Scale Capacity While Maintaining Quality
One of the biggest draws of using contract manufacturers is the ability to quickly ramp up or scale back on production volume as consumer demand fluctuates without the need to secure extra physical space. At the same time, though, it’s only natural that food and beverage businesses might question whether the items that are being produced by outsourced companies are up to the standards of quality upon which their brand reputation rests.
Aptean Food & Beverage ERP can help your organization overcome this challenge, facilitating spot checks on products manufactured by contractors using pre-defined quality triggers. The software can also compile data from all checks—including attached photos and documents—to hold contract manufacturers accountable.
Meanwhile, the dedicated Production Scheduling module provides insight into work and machine center capacity, as well as raw material inventory, to help ensure that your supply will meet market demand. The Aptean Business Intelligence integration also offers tracking for profitability-related key performance indicators (KPIs) so that you can flex those lines that have the best margins.
2. Enhance New Product Development
By moving manufacturing activities outside of your facilities and freeing up your workers to concentrate on other critical tasks, you can improve outcomes in a number of operational areas. You need the right systems in place to maximize the benefits of this approach, though, which is where our offerings can come into play.
Focusing on new product development keeps your brand fresh and exciting, and Aptean Product Lifecycle Management (PLM) Lascom Edition helps you do just that by streamlining the creation and iteration of formula-based products. The system also allows for collaboration with external partners via the integrated supplier portal.
What’s more, the Product Specification module of Aptean Food & Beverage ERP acts as a “single source of truth” for relevant item data and can auto-calculate ingredient and nutritional values based on your bills of materials (BOMs). That means your workers are less burdened with tedious and error-prone tasks and instead can use their unique skills to innovate and explore new ideas.
3. Improve Sales and Distribution
On the sales and marketing side of things, you can get more out of the extra time your staff have to devote to these efforts with the Aptean Food & Beverage ERP's Call Plan, as well as that same solution's Customer Item Catalogue module that provides a curated list of clients to contact. Aptean Pay makes it easier for customers to make payments, while Aptean Customer Relationship Management (CRM) helps your sales team manage customer interactions.
In addition, you can more reliably deliver on time and in full by redirecting your resources to distribution when you tap contract manufacturers for your production. The Transport module of Aptean Food & Beverage ERP makes this easier, automatically calculating expected floor space needs versus the actual when finished goods are ready to be received or staged for shipping.
Finally, an integration with Aptean Routing & Scheduling Paragon Edition also allows you to effectively plan, schedule and track shipments to customers and implement custom rules for temperature-sensitive goods like frozen foods. This helps keep your clients happy, turning them into repeat buyers and consistent sources of business that provide stability even in uncertain times.
4. Manage Partnerships and Supply Chains Effectively
Working with contract manufacturers requires staying in lock-step with partners all along the supply chain to prevent any unwelcome surprises, as any time production occurs offsite, you have less visibility. Aptean Food & Beverage ERP mitigates this issue by letting you process subcontracted activity within your interface using work centers assigned to specific vendors.
The subcontracting worksheet functionality of our solution also allows you to find and submit production orders to contract manufacturers when raw materials are ready. You can also ensure you’re getting the most out of your partnerships by measuring subcontracted activity cost in production time or a flat charge per unit, while Aptean Business Intelligence can model simulations and project contract manufacturer output across 500 KPIs, more than 300 of which are food- and beverage-specific.
Other supplementary systems can improve transparency even more and facilitate clear and consistent communication. For example, Aptean Electronic Data Interchange (EDI) can automatically process orders, shipment notifications and invoices, while Aptean Advanced Workflow automates common business processes and triggers mandatory follow-up steps.
Aptean: We’ve Got Your Back
Effectively leveraging contract manufacturing can open up numerous possibilities for your food and beverage business, including increased volume and sales; streamlined new product development; and more effective distribution and customer relationship management. As outlined above, though, the right software and a sound plan are necessary to achieve the best results.
To start or accelerate your company’s digital transformation and set your foundation for the future, we hope you’ll keep Aptean at the top of your list of providers. With a solution portfolio that includes all of the above-mentioned systems and even extends to areas like overall equipment effectiveness (OEE) and enterprise resource management (EAM), we can really help you cover all your bases.
We also have an in-depth understanding of the food and beverage industry and the complex challenges that companies like yours face in the course of daily operations. We have decades of collective experience and extensive best practices knowledge that we’re eager to share with clients, who we work with as strategic partners rather than simply a vendor.
Consider also that Aptean Food & Beverage ERP was recently recognized with Frost and Sullivan’s 2022 Product Leadership Award in North American ERP Software for the Food and Beverage Industry, which demonstrates our commitment to the market and future-focused mindset. Our ERP also offers the advantage of unique industry-specific technology built on the Microsoft Dynamics 365 Business Central platform, which gives the interface a user-friendly and highly accessible feel.
Finally, we offer flexible cloud deployments of Aptean Food & Beverage ERP that allow the system to easily scale as your business grows, provide remote accessibility so your employees aren't tethered to a workstation and facilitate the planning and execution of integrations. These setups also offer better protection for your data with proactive security measures, consistent monitoring by our Site Reliability Engineers and continual backups for faster recovery.
So, ready to hear more about Aptean Food & Beverage ERP and how our complete suite of software solutions can facilitate working with contract manufacturers? Contact us today or request a personalized demo at your convenience.