ERP for Food and Beverage Manufacturing
If the title of this blog post got your attention, you’re either a) hungry or b) in the market for a new ERP solution for your food and/or beverage manufacturing business. How, you ask, can an ERP be compared to a buffet? In this post, we’ll explain that and the other benefits of choosing a modern ERP solution like Microsoft Dynamics 365 Business Central over a traditional, specialized ERP or a legacy or homegrown system.
Important Truths About Manufacturing and ERP
If you’re in the market for an ERP solution, it is very likely that you have no other choice. No business seeks to spend money on technology unless necessary, of course, but there is also the risk involved in switching over a system that, if down for any amount of time, can have a big cost.
However, if you’re in a situation that is forcing change—your software is no longer being supported, the functionality or technology unable to keep up with your needs as you grow and change are just a couple of reasons—you need to understand some basic truths before you make your selection. It’s a big decision with a lot riding on it, so being fully informed is very important.
There are three general categories of ERP for food and beverage manufacturing (actually, this is true for any industry):
- “Point” or industry ERP software that is tailored to your industry. These solutions have basic ERP functionality as well as features for food and beverage manufacturing.
- “Legacy” ERP software, which is often homegrown (developed internally, typically over a long period of time). These solutions also have basic ERP functionality, along with customized functionality to fit your business.
- “Modern” ERP software, which has robust ERP functionality out of the box but is not tailored by the company that built the software (e.g., Microsoft) for a specific industry. Modern ERPs take a different approach; rather than building in tons of functionality, which has its issues (which is discussed later in this post), they strive to provide a solid, robust ERP “platform” that makes it easy to tailor it not only to industry needs but the unique needs of the customer. We’ll discuss this further later in this post.
Why a Modern ERP Like Microsoft Dynamics 365 Business Central Should Be Your Choice
In our view—as an ERP implementor that has worked closely with customers in specific industries including food and beverage manufacturing for years—that the “Modern ERP” category is more than likely the best way to go. Even more to the point, we believe Dynamics Business Central is an excellent fit for F&B manufacturing. Yes, we’re biased, but for many very good reasons. Here are some of them:
Today’s ERP Has Gone Far Beyond a Features Checklist
In the past, companies chose their ERP (or built it) based on a list of features they required, from accounting and finance functions to things like logistics, traceability/lot tracking, and production. The issue with this approach is that the resulting software solution—the solution that ticked all the boxes—was a huge, lumbering piece of software that suffered from performance problems and, because of the millions of lines of code required to program all those features into it, was extremely difficult and expensive to modify.
With the advent of the cloud, like Microsoft Azure, and other advances in technology, today’s modern ERP solutions are structured in a completely different way. Because a company’s ERP system is essentially the backbone of the business, it makes sense that it becomes the foundation—or the operational platform—for the company.
With Business Central, Microsoft has maintained robust accounting and finance functionality at the core, but industry- and business-specific functionality is delivered in what are essentially apps that are plugged into the ERP. They all work seamlessly together to create a solution that meets all the demands of the organization, but more importantly, the structure is very flexible, providing some significant advantages:
- It’s much easier to accommodate changes in the way the company functions—without big, expensive customization efforts that take a long time to complete and can introduce problems into the system
- Without all that code weighing it down, the system is optimized for better performance, and with the cloud, processing capacity can be geared up or down at any time based on current need (which saves money)
- Microsoft updates their solutions twice a year, and with SaaS, you’re always up to date with a fully tested upgrade. When you’re using homegrown solution or a solution layered on top of Business Central, you are dependent on the manufacturer (or your IT staff) to ensure it is also being kept up to date. If they’re not, your entire system could be held back.
- Perhaps the most surprising and exciting advantage with Business Central is that it is designed to work in harmony with other, non-Microsoft software and systems. That means that, if you choose Business Central as your new ERP but want to keep your QA software, for example, you can absolutely do that. Because it is a Microsoft application, Business Central already works with applications and tools like CRM and Microsoft 365 (Office, which includes Outlook, Teams, and more). But it doesn’t stop there. Microsoft created a suite of tools called the Power Platform that make it easy to create workflows and automate processes that involve Business Central and any other software, data source, or platform you already have in place or want to add to your business.
- With all your systems tied into Dynamics 365 Business Central, you get all your data in one place, giving you once source of information, always up to the minute. You can then use a tool like Power BI to make informed business decisions and do as much analysis and reporting as you require. More importantly, if you have disparate systems, processes, and workflows—from managing inventory, predicting demand, production/machine consumption, and palleting to distribution and invoicing—working independently with very tight timelines and not communicating, you could experience serious consequences if processes get out of synch. In an industry where turnaround time is of utmost importance, every facet of the business needs to be visible, so everything is coordinated and working together in harmony.
- Microsoft works very hard to make upgrading nearly a non-event. With the modern ERP structure of platform+apps in the cloud, there are many advantages, like dealing with less customized code, so upgrading is indeed much easier and gets easier and less costly as time goes by.
- While Microsoft offers you the ability to keep other business systems, it’s important to point out that Business Central has some pretty impressive capabilities for food & beverage manufacturing, including traceability, lot tracking, revisions on BOMs, and more.
The goal ultimately is to provide a solution that works with you, not against you, making things more efficient and streamlined. And modern ERPs like Business Central strive to be as flexible as possible so that you get exactly what you need to run your business—now and in the future, so you don’t have to face changing ERPs again in 5 years.
The Downside to Specialized ERPs
If you’re a food and beverage manufacturer, it might sound like a good idea to choose an ERP that was designed for your industry. But there are some drawbacks:
- As discussed above, adding all that functionality only gets you so far. You will still need to customize the software to meet specific requirements—and that can be time-consuming, complex, and expensive.
- Just because an ERP is built for your industry does NOT mean they know how you operate. Business Central works with you to help automate and streamline your business processes.
- These ERPs do not work seamlessly with other applications. Creating an integration will require a significant development effort.
- Some of these software manufacturers “own” the code used in your solution, so changing partners will not be so easy. New partners will not have access to the previous homegrown/layered solution.
Put Microsoft Dynamics 365 Business Central On Your ERP Short List
If you are a food and beverage manufacturer, it is completely understandable that you would gravitate towards choosing an ERP that is either similar to what you currently have or that purports to be specially tailored to your industry. And, as was discussed at the beginning of this blog post, choosing a new ERP is a big decision that should be thoroughly researched. So, we encourage you to keep those solutions as options and learn what they have to offer. But we also strongly encourage you to include a modern ERP like Microsoft Dynamics Business Central on your list.
With a staff of Dynamics veterans with experience working with manufacturers, ArcherPoint has the resources and expertise to show you the potential of Business Central for your company—and then deliver on that potential. Business Central is not only a business solution, but also an investment in your company’s growth and future. Talk to ArcherPoint about how we can use Business Central and other Microsoft technologies to help you reach your business goals.