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Two major drawbacks of older food ERP systems

Posted by Dawn Aldwinckle on October 7th, 2013

food erp, old erp system, erp system

There’s no doubt the digital age has exploded in the last decade, with RFID tracking (Radio Frequency Identification), online ordering and mobile devices all changing the face of food and beverage wholesale. So why are food wholesalers still using outdated ERP systems?

Any food and beverage distributor or wholesaler will know that ERP software underpins the successful operation of your business. Advances in technology mean customers are expecting a faster response, more customised and personalised contact, and greater visibility of product sources. Older ERP systems implemented in the early 1990s simply cannot provide the agility and real-time updates that today’s fast-paced food and beverage sector requires. 

Assessing the drawbacks – and where new ERP can help

There are two key drawbacks to older ERP software: first, the manual time investment required to support and build functionality and secondly, the slower and less flexible customer service abilities – such as being able to confidently confirm stock levels and delivery in advance. 

Manual processes are open to error and reduce efficiency

With older ERP systems, manual processes and workflows are required to work in tandem with the software. For example: paper-based invoices require manual data entry into accounts software, or promotional price changes involve lengthy, inflexible manual processes for each product to be updated. Not forgetting the worrying fact that paper-based processes are also susceptible to human error, loss, or even damage in disaster situations such as a fire or flood.

New fully integrated ERP systems automate simple tasks and take into account all key business functions. They enable staff at all levels of the manufacturing process and supply chain to communicate more effectively and operate more efficiently than their aged predecessors allow – most outdated ERP systems were designed in the 80’s. Not only that, but new Cloud ERP systems allow wholesale and distribution teams to provide retailers and customers with infallible product traceability, while also enabling remote access to data. Both these benefits reduce margin for error, ensure data is backed up and strengthen overall disaster protocol.

Manual processes and older ERP systems also throw up very difficult planning scenarios for wholesalers. Adapting to customer demand in order to prevent stock level inadequacies or excess is essential to keep a tight line on operational costs. But older ERP systems rely on additional manual processes to produce forecasts, which can often be slow to calculate. Which means a quick response to sudden changes in customer demand (as seen in Horsegate, for example) can be especially tricky to manage with speed and accuracy. 

New ERP software allows wholesalers to create multiple forecasts depending on customer demand, while providing flexibility in the supply chain lead times to ensure stock levels are always optimised. A 100% fulfilment rate is unheard of with older ERP systems – but is possible with new ERP software, saving on costs and time while boosting your reputation.

Hindered customer service capabilities

There are further customer requirements to consider, too. Older ERP systems won’t support new wholesale order technology – so, for example, if a delivery has been questioned by a customer, it takes valuable time to check on the order details. New ERP software enables delivery drivers on mobile devices to deal with the customer in real-time, reporting order details and the queried discrepancy there and then. Faster – or in this case, immediately – customer service improves reputation and bring efficiency to wholesale business processes, saving time and money in the long term.

As customer demand fluctuates between season and trend, a flexible approach to customer requirements is essential to deliver good service and maintain a footing in such a competitive sector. With consumers becoming increasingly aware of the source of their food, wholesaler retail customers are placing greater emphasis on traceability and visibility of stock origins. ERP software can now track product origins down to the very batch of each product, enabling transparency in operation and satisfying the increased consumer demand for ethical sourcing.

Understanding new ERP systems

The plethora of demands placed upon food and beverage wholesalers for things like: seamless customer service, efficient responsiveness to seasonal trends and accurate forecasting means you are understandably cautious about investing in food software that is fully supportive and enabling. To help you understand more about ERP software and its suitability for food and beverage wholesale, we’ve put together our free guide: Prioritising ERP in the food & beverage industry, to help.

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