Seasonality affects all Food and Beverage businesses whether you're importing, exporting, buying or selling locally or abroad. As seasonal competition in the industry grows ever fiercer, every penny of profit counts.
But what are the main problems with seasonality and how can a simple software upgrade take most of those headaches away?
Seasonality is a key profit-turner for the F&B sector, presenting reliable and regular opportunities to leverage sales of popular stock: pumpkins at Halloween, turkey on Christmas, strawberries during Wimbledon, chocolate at Easter, etc. But you must be prepared if you are going to see the rewards you want.
Consider the losses you incur because of shortages, overstocking, wastage, expiration and storage costs. All of these issues happen as a direct result of inadequate forecasting and poor seasonality management.
Regardless of the size of your business, these factors can and will impact your purchasing plan and affect your ROI if you are not able to effectively plan ahead for seasonal trends. Do you fall prey to any of these difficulties? Well, you're not alone.
Small food and beverage sector businesses, in particular, are vulnerable to these issues and have more need than larger businesses to work within precise purchasing parameters.
The good news is there are quite simple ways to tackle the most common forecasting issues. The better new is, a simple upgrade to your existing ERP using Business Intelligence software might be all you need.
Overcoming The Top 5 Forecasting Issues F&B Businesses Face:
Controlling Inventory, Storage or Shipping Costs
Calling this industry time-sensitive is an understatement! Taking into consideration the variety of products and their individual storage requirements, the cost and planning involved is very complex. Some products need to be shipped at a certain time or they expire. It's crucial for owners and managers to have a system in place that helps to control and monitor inventory data, and one that saves money, allowing them to move products quickly based on their nature.
Using a competent ERP system's timing feature allows you to plan the movement of products and make sure they reach their destination on time. This function allows you to then update your inventory at the same time.
Delivery Schedules and Routes
Some of our most popular seasonal events occur during holidays or the winter months when roads are particularly busy or made hazardous by bad weather. Deliveries can be delayed, roads closed, there may be navigation issues if you’re using a seasonal supplier or stock may be incorrect when you get there.
These mishaps cause disruption to your business, increasing delivery time or potentially damaging sensitive products. More seriously, repeated supply chain issues can erode the reputation of your brand as it’s seen as increasingly unreliable.
Key features of an excellent ERP are communication tools and tracking settings to allow scheduling and route optimisation. It allows for faster and streamlined interaction between suppliers, vendors and your delivery team. You’ll quickly see if there is a problem, be able to solve it and make timely changes before any damage to your business can occur.
By using these features, you ensure your delivery system is fully optimised, which prevents any losses due to waste, fuel costs, etc. These all contribute to saving your business money. In the highly competitive Food and Beverage world the more reliable your supply chain, the more reliable your brand's reputation.
Effectively Managing Accounts Receivables
Ever fall behind due to slow months, or has overstocking lead you to
Effective planning and stock forecasting are essential ERP and Business Intelligence features which all contribute to mapping out slow months or seasons. Using these tools, you can effectively plan strategies and contingencies to avoid losses in profit or stock expiration.
Understanding Supply and Demand
Your reports reflect the demand for the next quarter or season. Faulty or incomplete reporting means a skewed projection leading to incorrect supply and demand. Distribution needs accurate reporting across all data sources that keep managers and supply partners on the same page. A lack of forecasting quality tools makes this incredibly difficult and compromises accuracy.
Business Intelligence helps mine all the data received and housed within your ERP solutions and helps to present them in a way that is easy to understand and report on.
Lack of Communication
There's nothing worse than receiving incorrect stock which needs to be returned. The entire procedure results in a loss; the time it takes for correct stock to arrive, your shelves laying bare, and the loss due to unsatisfied customers.
Lack of communication between manufacturers, warehouses or retailers may result in the supply chain not being able to meet customer demands in time. Having an effective software communication tool that keeps these channels in constant contact enables smoother transactions and fosters great business relationships.
Business Intelligence Forecasting Solutions
Seasonal trends can be a huge profit boost. Using your ERP software to its full potential is key to maximising your forecasting capabilities and minimising potential issues.
All business intelligence forecasting solutions are not made equal. Make sure you are using the best fit option for your business model. Be specific. Take into account affordability, your USPs, sector niche if applicable and growth goals.
Get your business intelligence forecasting right and you can turn seasonal trends into direct business advantages.