Over the years we have had discussions with many companies in the food wholesale and distribution industry who were looking for software suitable for their business. Most of these companies were looking for capabilities which are commonplace in many food distribution solutions including lot tracking/traceability, landed cost tracking, flexible pricing and multiple units of measure.
Although these features will fulfill the requirements of many in the food wholesale and distribution industry, depending on the specific activities and product mix of your business, there may be additional requirements. The biggest differences amongst appropriate software solutions is when it comes to “catch weight” functionality. Companies dealing with canned foods, frozen or dry goods can benefit from ERP software with food distribution specific features. However, when speaking with food companies that deal with meat, fish, poultry, produce or dairy the term catch weight often becomes part of the discussion.
If used in your business, catch weight may be the key determinant in which software you choose. Commonplace in businesses dealing with produce, meat, poultry and fish this term generally refers to the specific weight of a specific batch of product which is close to the average or standard weight used for that product. For example you may sell a 16lb case of lamb chops, but depending on the actual cuts of meat in the case it may only weigh 15.7lbs or maybe 16.3lbs. You could have 20 – 16lb cases each with a different actual weight. How will these be stored in your inventory? Will you sell them each for the same price or will they be sold by their precise weight? Will you break open a case and sell by smaller weights? When it comes to catch weight functionality it is important to know your requirements, as this is only one version of catch weight and there are many others out there. A potential software provider may tell you that their system can deal with catch weight, but if they define it differently than you do, it may not meet your needs. In order to avoid any confusion, make sure you have a clear understanding of your requirements and be as specific as possible when speaking with software vendors. If you do require catch weight functionality make sure that it becomes an integral part of your search, and don’t waste your time looking at software without it.
For those businesses dealing with canned, frozen and dry packaged goods, in which the weights and sizes will be standard each time, it is unlikely that you will require catch weight functionality. This can potentially provide you with more software options to choose from with lower price tags. In this situation an integrated ERP solution with specialized food distribution features such as the following is likely what you will need to run your business.
If the products which you sell have the possibility of being recalled or are marked with an expiry date/best before date, your business will likely benefit from lot tracking functionality. This feature should at a minimum indicate which specific lots or batches have earlier expiry dates so as to allow you to ship them first and avoid sending those that have already expired. More robust software will tell you with the click of a few buttons which vendor sent a certain batch of product and then to which customer(s) you shipped the product. In the case of a product recall this will make your job a lot easier and alleviate the stress of managing this process manually.
If the price of the products which you are selling change on a frequent basis, manually updating the cost of the product and selling price can be a burdensome and time consuming task. The ability to import updated information on a regular basis from an external source such as Excel can save much time and effort.
Landed Cost Tracking:
If you are importing products from out of the country you are likely exposed to costs over and above the cost of the actual product. Import customs and duties, brokerage and freight charges should all be added into the cost of the good you are selling in order to know the true cost of bringing the product into your warehouse. This in turn allows you to set a sales price that properly accounts for all costs and to achieve your desired margins. Many companies do not track this properly and often include these costs as general expense items, or try to track this information outside of their accounting software which could lead to errors. This does not allow the business to know its true cost of goods. A well designed landed cost feature within a food wholesale software or ERP system will provide your business with the information it needs to price your products appropriately.
In order to make the right decision when it comes to food distribution software, make sure you fully understand and outline your existing processes and requirements and address these with each software vendor during the sales process.