The dairy industry is possibly the largest industries in the world. Every day, over 6 billion people across the globe consume milk in the morning. Any business that deals with this extremely perishable natural produce would be aware of the procurement and distribution process that is of vital significance. In addition, there are various processes that govern the statutory regulations, quality controls and permissible requirements that call for stringent internal measures. This makes it’s absolutely essential for dairy manufacturers and owners to keep up with best practices to ensure long-term sustainability and profit.
Enterprise Resource Planning (ERP)
A fully featured ERP is a singular approach that gives better control by allowing executives to have complete control of what is going on inside the different processes. ERP is a software system, which operates as a unit whose various parts communicate seamlessly. This differentiates ERP from traditional software. In this way, management of business resources can be done automatically. ERP systems are tailored to dairy industries of all sizes at reasonable costs, therefore making them accessible to even small and mid size companies.
Benefits of ERP for the Dairy Industry
ERP applications are sometimes considered the lifeline of the dairy industry. The sound implementation provides solutions to many business related issues, thereby helping in sustaining the growth of business in the competitive market.
Here in this blog. we will refer some of the advantages that serve as a valuable piece of information for companies’ considering ERP software in India.
1. Strong Distribution Planning Capability
Distribution strength is a make or break for the dairy industry. Distribution in this industry can follow a multi-tier network composed of wholesalers, distributors, retailers and more. Dairy companies look for sophisticated distribution capabilities in ERP solutions in terms of DRP (Distribution Requirement Planning), planning safety stock at different lead times and inventory levels.
2. Promotion planning
Dairy companies depend heavily on promotions for sales uplift. Sometimes these promotions are partly funded by manufacturers and partly by retailers. Every dairy company looks for strong promotion planning capability in the ERP solution so that their promotion budget is most optimally used and its ROI can be tracked.
3. Collaboration with Retailers
Dairy companies need strong collaboration with the front end of their supply chain i.e. retailers. In the last decade of so, ERP vendors have come up with capabilities like VMI (Vendor Managed Inventory) and CPFR (Collaborative Planning Forecasting and Replenishment) that address these needs of careful collaboration with retailers.
4. Route Management
Managing routes of delivery is important for dairy companies as a truck from a warehouse can deliver goods to multiple retailers on a particular day. This truck needs to follow the most optimum route so that all deliveries are completed within the shortest time and cover minimum distances. An ERP solution enables route optimisation making delivery proficient, helping businesses keep their supply chain seamless.
5. Food safety and Compliance
Ensuring food safety is highly critical for food companies along with the need to meet stringent compliance standards of authority for different countries. ERP enables support of specific compliance standards and helps meet food safety requirements.
Final Thoughts The advantages mentioned above, show that the need for automation through ERP systems in the dairy industry is of great importance. However, every dairy company must adjust SAP implementation to its organisational demands in order to achieve the best possible outcome.
