What To Include In An RFP For A Food Manufacturer

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RFP- Request For Proposal written in notebook

What questions to include in an ERP RFP for Food, Meat and Beverage Processors

During my over 25 years spent helping small and mid-sized food manufacturers implement technology such as ERP, manufacturing and warehouse management systems, I’ve worked with a number of Consultants who were hired to assist businesses with their search for software. The Consultant often prepares the RFP (Request For Proposal) that includes an introduction to the company, what they are using now to manage their information needs and typically a spreadsheet detailing the specific needs of that company. They then send that RFP out to ERP providers who they feel will be a good software fit for their customer.

As an Author and Traceability Consultant myself, I work with companies to conduct traceability audits and provide operational guidance on implementing technology in a plant or warehouse where previously written logs and Excel sheets prevailed. The client doesn’t know what technology is best so they rely on the Consultant to guide them to solutions that can help them get traceability, inventory control and recipe yield management.

If the Consultant does ERP Search Consulting across many industries, they likely have developed a standard spreadsheet of needs that they adapt for each client. Food manufacturing is different however and the RFP should reflect those differences. To assist Consultants with making a food industry specific RFP, I have assembled some key concepts that you could include as part of a food manufacturer’s RFP:

  1. Multi-input, Multi-output manufacturing that can manage waste/rework and calculate costs without needing an individual run for each output. While widget manufacturers take a bunch of things and make one from them, food manufacturers often take a bunch of inputs including ingredients, packaging, perhaps labour or overhead components and make a batch of either an interim or finished good and then portion that batch off into multiple sized containers. Perhaps they make a vat of juice and then portion it to individual serve containers for food service as well as 1 L or 2 L containers for grocery stores. Multiple inputs made into multiple outputs and the lot numbers on all those inputs need to be connected to all those outputs for traceability and for determining a final cost for each end product. Most food manufacturing also has a waste component and sometimes the company has to pay to get rid of that waste. Knowing the yield on each batch helps management ensure that staff in the plant are performing up to the expected standards. It is rare that a recipe that expects to get 1,000 muffins yields exactly that quantity, so while a recipe standard with waste needs to be established, the actual cost of each batch will vary.
  2. Recall reporting for production that takes multiple days. Many of my customers produce an product and package it off on another day, and this can pose a challenge to many traceability systems. The finished good may get labelled with the date it is packaged, but the production took place on another day. Recall reports need to tie these together. If there was an issue in the plant such as a failed metal detection test, or equipment cleaning issue, the system needs to know the day the interim product was made and tie that to the finished product produced from it.
  3. Code 128 barcodes—producing and reading them. Code 128 barcodes are the standard for case labelling in certain verticals of the food industry, such as meat, cheese, chocolate and for fruits and vegetables from around the world. It is also increasingly being adopted across other food and packaging items. This is because a code 128 is a barcode that can contain multiple pieces of information that can be captured in a single scan. These pieces need to include an item code, and lot number at a minimum. There are 99 possible segments that could be in these barcodes and other segments could include a date of manufacture or packaging, the weight of that individual case or unit, the country of origin, to name a few. Knowing the ERP solution can work with these types of barcode rather than requiring all those important elements in separate barcodes will save time scanning and relabeling in the warehouse. Since traceability is often a driver for these companies to get ERP systems, it is critical that their warehouse management solution do more than identify the item, it needs to help with expiry date tracking and lot number tracing. If the product is a variable weight product, then the weight in a code 128 is also critical information.
  4. Integration of Plant Floor, Warehouse and Office. Product may be shipped before the entire batch is finished being made. Since negative inventory and lot control don’t work (which lot # went negative?), the need for lot traceability requires that inputs be received before they are used in production, interim products need to be made before they are used in finished products and finished goods must be produced before they can be sold. Of course, that is what happens in real life, but getting that information into a system in a timely way can be a challenge for some companies and software. Whether for space or short shelf-life freshness reasons, the food industry will often produce and ship some immediately, even before the full batch is finished. I have had customers that need to get a shipment on the road even before QC has released it if the product must travel several days and the shelf life is short. The product gets the go ahead to ‘release’ it to the client, while it is on the road to its destination. This means it is imperative that the production floor have a live method to easily record items as made in inventory, with a lot number, so that they can immediately be moved around a warehouse or shipped out on a customer order.

These are just four common requirements that most of my food manufacturing clients need. To help ERP Consultants ensure their food clients find software providers that can truly help them grow their business more easily, it’s important they ask the right questions in their RFP.

I share even more ideas on practically implementing technology in my book titled Traceability for Food Manufacturers: How to be ready for Blockchain available from Amazon worldwide. Please also email me to request a copy of my spreadsheet of questions that I use in my own Consulting practice to assess the current state of technology and to help define the needs for food manufacturing and distribution businesses. As a Consultant, you clients rely on you knowing what they don’t know.

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