Coortex

Food production: How bad production sequences can impact companies

 Food production has a unique characteristic. Their products lose value, every day, when in stock. And that happens quickly. However, like everything else in the world, companies are also faced with the need for immediate supply to their customers. It is like having to keep a supermarket always stocked and keep the warehouse as empty as possible. Obviously, this brings numerous challenges.

“Large batch size means shortage and overstock at the same time”

 

The first challenge for food production is to forecast sales and compare backlogs and firm orders that are still open. Usually, the forecast is made and summarized in monthly periods. Clearly, this is not the best way to produce, otherwise, it can lead to overstocking of some items and lack of coverage in many. But what is even worse, is the lack of availability and loss of sales.

Therefore, production must be broken down by observing parameters like minimum and maximum batch, stock coverage, and batch size, as well as many others, to fit in weeks or days, not in months. Even if the company has an ERP with MRP module, it is not going to be enough, because this module is going to create Production Orders wrongly, with sizes and due dates that are not aligned with reality. The problem is, that this algorithm is so simple to be valuable here.

Even having observed the criteria for opening production orders, we have to consider that the production sequence is not yet defined. Incorrect sequences also are going to lead to shortages, low productivity, waste, and machine downtime by setups.

“Production sequence is an art to balance productivity and order fulfillment”

 

Finally, we can easily assume that what was planned is never what is actually going to be produced. We all know that the forecast is to drive the raw material purchase process and also helps to determine machinery and labor requirements. However, the dynamics of order entry implies always changing the original plan.

 

“60% of CSCOs are expected to make faster, more accurate and consistent decisions in real-time”

 

Source: 2021 Gartner Future of Supply Chain Survey 

The solution is to make the process more agile, removing manual procedures and even spreadsheets. It must be done, to integrate decision ERP and MES into a support system. By doing this, the company instead of looking to solve problems is going to seek to explore opportunities. Do it, giving also visibility to everyone, including top management and supply team, and also sales department and customers. Agility, Collaboration, and transparency are the keys to success.

It is necessary here, to have a system with mobility, collaboration, and integration not only with on-premises systems but also with IoT, e-mail, BIs, and many many others. It means, it is time to think about Industry 4.0 requirements seriously.

For this, we are working on giving a new solution for the market, solving this problem from a different perspective, and preparing food production companies for the new reality. It is quite clear that companies must have more than ERP, MES, Spreadsheets, or even the old APS to be ready for this new age.

Conclusion

Trying to stick to the plan, ensure stability, and make order entry more rigid, is just a way to increase cost, lower efficiency, and reduce the company’s competitiveness. But even if you try, the problem will show up in the form of emergency orders causing even more problems. Then it is time to redesign the planning and scheduling operations, making them leaner, faster, more autonomous, collaborative, and more secure.

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