UpKeep Food & Beverage Manufacturing CMMS: The #1 Software for Food and Beverage Manufacturers

The intricacies and complexities of food and beverage manufacturing do not often come to mind, even though these staples are a constant part of every day. We take it for granted that food and drink will always be available at our local grocery stores and favorite restaurants. However, the process of manufacturing the most popular foods can be quite complicated, spanning a process that begins with farmers and agricultural businesses that grow the initial ingredients through the safe packaging and timely delivery of finished products.

The manufacturing of these items, along with the management and maintenance of the assets that are critical to the entire production process, involves millions of employees, multiple technologies, and a wide range of processes. Let’s take a look at the details.

What Is Food & Beverage Manufacturing?

According to the United States Department of Agriculture, “food and beverage manufacturing plants transform raw agricultural materials into products for intermediate or final consumption by applying labor, machinery, energy, and scientific knowledge.”

The term encompasses every phase of food production, starting from the farmers who grow the individual ingredients to the delivery of the finished product. For example, corn can be grown as sweet corn for a favorite summer barbecue side, as animal feed in the early stages of meat production, or as a means to create corn syrup for products such as candy and soda. 

Meat processing includes the butchering of livestock and poultry, cutting and packaging, and cooking for prepared foods; it also makes up one-quarter of food and beverage manufacturing. Dairy, beverages, grains, oils, fruits, vegetables, and baked goods make up the remainder.

Why Is Food & Beverage Manufacturing Important?

Obviously, food and beverage manufacturing is important to provide the nourishment for all of us to live and thrive. However, it also plays an important role in the economic development of our country. For example, the industry provides thousands of employment and professional development opportunities for individuals, offers a space for innovative developments, generates exports to other countries, and helps meet policy and societal goals.

What Are Common Food & Beverage Manufacturing Tasks?

Since food and beverages are consumables, and contamination can be potentially life-threatening, many of the manufacturing tasks revolve around safe handling and processing of ingredients and end products.

Ingredient Handling

For example, a majority of ingredients are perishable, which requires precise and careful management of ingredient sources, transportation, storage, dating, and labeling. Ensuring that inventory is ordered, used, and stored properly is required for safe processing as well as to minimize waste.

Combination Processes

The next stage typically includes a wide variety of tasks such as washing produce, cutting meat and vegetables, and combining these with spices and other items to create food products. It’s important that processed food be consistent from one batch to the next in terms of taste, appearance, and quantity.

Much of food manufacturing is completed in batches and labeled as such so that in the event of a problem, a recall can be issued to warn consumers of potential issues. 

Packaging and Storage

Once the finished product is completed, it must be packaged into appropriately sized containers for sale. This can be done in single-serving-sized packages, family sizes, or in bulk. Regardless of size, effective packaging will protect food and beverage products from contamination and spoilage as well as communicate a business’ brand and reputation.

Regulatory and Compliance

Because of the potential risk to human health, many food and beverage manufacturing tasks revolve around adhering to regulatory and compliance. Making sure food production processes are safe and up to code and that hygiene practices are carefully followed will reduce the likelihood of foodborne diseases. Employees must keep equipment and surfaces clean and sanitized as well as follow all FDA and state regulations.

Industry Trends

While food and beverage manufacturing has been around for decades, several industry trends have more recently affected companies and their priorities. Here are some key concerns of modern food and beverage manufacturers:

• Quality. Consistently high-quality in terms of ingredients, nutrition, texture, and flavor are expectations of today’s consumer.

• Compliance. The food and beverage industry is highly regulated, requiring companies to pay increased attention to compliance requirements when it comes to health and safety.

• Sustainable Packaging. Companies are under a great deal of pressure to use less packaging and more eco-friendly options that can be recycled sustainably.

• Technology. Increasing the efficiency of all production processes is critical to be competitive today, and the use of artificial intelligence, machine learning, and other technologies play a critical role.

• Distribution Outlets. Finding the right channels for distribution, especially in a world that increasingly expects products delivered to the door, is a constant challenge for manufacturers.

• Shelf-Life Issues. With many food and beverage items having a short shelf-life, manufacturers must focus on ways not only to rapidly use perishable ingredients but also distribute the freshest end products to the consumer as quickly as possible to minimize waste and loss.

• Employee Satisfaction. Like most industries today, food and beverage manufacturers are struggling with finding reliable workers and retaining them. Creating a positive, productive culture that cares for employees as whole people is key to long-term success.

• Inventory and Logistics. Managing inventory and logistics through a complex supply chain is an important part of efficient manufacturing in any industry, but especially critical in the perishable segment of food and beverage.

• Seasonal Challenges. Although it’s easier than ever to purchase just about any fruit or vegetable whether it’s in season or not, processing large amounts of different seasonal items for packaged foods can create manufacturing challenges.

• Competition. More manufacturers are under pressure to produce and deliver more quickly at lower prices in a highly competitive market.

• Evolving Demands. Today’s consumer is concerned with eco-friendly sources, dietary restrictions, ease of recyclability, plant-based foods, and food safety. All of these factors play a role in how a food and beverage manufacturer is perceived in the public sector.

KPIs and Metrics for Food & Beverage Manufacturers

Key performance indicators (KPIs) are specific measurements that can help a business gauge how it is doing against strategic goals. They can help an organization ensure it is making progress against those things it has deemed most important. Each industry, or even individual company, will have different KPIs that work best. For the food and beverage manufacturing industry, the following KPIs may be useful:

• Operating Margin. Operating margin is the amount of money a company has left after paying expenses such as salaries and materials but before taxes and interest payments. Over time, an organization that looks at operating margin can determine whether it is losing or gaining profitability. It can also be used to help benchmark against other food and beverage manufacturers in a specific niche to see where you fit in the market as a whole.

• Unplanned Downtime. While some downtime is inevitable due to the large and complex machinery often utilized in food and beverage manufacturing, unplanned downtime can be extremely costly as it can cause a rippling effect of halting an entire production line and leaving employees with nothing to do. It is calculated as a percentage of operating time and occurs when assets break down unexpectedly.

• Preventive Maintenance. A good preventive maintenance program can help reduce unplanned downtime, so tracking the completion rates of preventive maintenance tasks can be another important KPI. By looking at the percentage of completed tasks, an organization can determine the effectiveness of its maintenance program.

• Throughput. Throughput measures how much a facility is able to produce over a given amount of time. Organizations can drill down to examining the throughput of specific assets, providing insight to where bottlenecks may be happening without the entire production process. A sudden drop in throughput can be a red flag to a breakdown somewhere in the system that demands immediate attention.

• Yield. Yield is a partner KPI to throughput, looking at the quality of the production and how much of the finished product is usable and ready for market. If throughput is high but yield is low, a facility may have a problem with equipment malfunctioning somewhere on the line. If this problem can be corrected quickly, a business will minimize waste.

• Inventory Turnover. This KPI is particularly important within the food and beverage industry as a great deal of items are perishable or at least can deteriorate in quality over time. Measuring how frequently your inventory is completely sold and replaced can help a business titrate the speed of its production line, balancing the freshness of its inventory with customer demand.

• Fill Rate. Fill rate is coupled with inventory turnover, measuring how many complete orders are shipped on time. Customers today expect that they can get whatever they want, whenever they want, and faster than ever. Food and beverage manufacturers ideally have a fill rate of 100 percent; however, this can be a challenge, especially with pressure to keep inventory levels low and turned over quickly to maintain freshness.

• Distribution Costs. Top food and beverage manufacturing companies hold their distribution cost as a percent of revenue to 3.5 percent or lower. Getting products to the marketplace so they can be sold can be a significant expense so measuring the costs of distribution and putting practices and improvements in place to increase efficiency is well worth doing.

• Days Sales Outstanding. Days Sales Outstanding (DSO) is a common KPI in many industries and looks at how long it takes customers to pay invoices. The faster customers pay, the faster a company has its cash and the less money it needs to spend on collection efforts. There is also evidence the longer it takes for customers to pay, the more likely they will fail to pay altogether. Many new technologies can help facilitate faster payment options through electronic transfers and automatic invoice reminders.

• Time to Close Books. Although the time to close accounting books may not seem to be an important KPI to food and beverage manufacturers, it can help an organization respond more quickly to any financial challenges that arise. Current financial information means more accurate reports, which can help facilitate smarter decision making. 

• IT Costs. Like all industries, food and beverage manufacturing is adopting more automated processes and predictive maintenance programs. Although these technologies can help boost revenue and save money, it’s important to measure how much technology costs and what percentage of revenue it consumes. Efficient management of IT spending is important to overall profitability.

What Is Food & Beverage Manufacturing Software?

Food and beverage manufacturing software can encompass a broad range of technology required for the organization to work effectively and efficiently.

Many food and beverage manufacturers today use enterprise resource planning, accounting packages, inventory management tools, computerized maintenance management software, and many others that may operate as stand-alone solutions or be integrated to work together.

For example, software may be able to track raw material orders, inventory levels, and freshness dates on the front-end of food and beverage production. Other technology can be used to manage the accounting side from supplier payments to invoicing customers. A maintenance platform can incorporate preventive maintenance schedules as well as manage data from equipment sensors in a predictive maintenance program.

Ideally, all these technologies share data and communicate with one another to keep the organization running smoothly and efficiently. 

How Asset Operations Management Benefits Food & Beverage Manufacturing

Asset Operations Management (AOM) threads together an organization’s technician services, passive and active data, and unique operational blueprint to make it easier and faster for every employee to get what they need to do their jobs successfully. 

AOM can help food and beverage manufacturers manage multi-location, day-to-day maintenance life cycles; optimize asset utilization; and gain insights into real-time performance data. Maintenance, reliability, and operations teams now have one easy-to-use tool to drive efficiency and effectiveness across the organization. 

When all these previously siloed departments can work together to focus on the optimal performance of critical assets, food and beverage manufacturers can boost their overall efficiency, improve on key performance indicators, and generate long-term, sustainable revenue and success.