Challenges in the bread and bakery industry

The challenges in the bread and bakery industry are centered around continuously changing demands that are forcing flexibility. These changes demand many industrial bakeries to innovate and associate a more flexible production capacity. Only by doing so can they efficiently make several types of products in response to newer trends. Customers expect freshness, choice and quality. Therefore, in this highly competitive market, retailers – together with suppliers – are constantly looking for innovative products to create a head start.

 

Food safety is a requirement 

Food Safety and compliance has become a major factor in the industry, more so for the bio sector. Take fully biological bakeries requiring extra regulation regarding SKAL numbers. These mandatory quality checks are a requirement of, but not limited to, wash-down procedures, finished product reviews and formulation temperatures. Quality control's emphasizes controllable factors (such as track and tracing), that affect the quality of the finished product. Besides, having the right product specifications is required. Quality control track and tracing abilities prevent stress and penalties coming from unannounced quality checks for customers, e.g. in the case of producers requiring specific tracking details. Once a pallet with a specific pallet and lot number is bought, it has to be fully tracked in order to maintain raw material flow and to track end-products.  A strict documentation of these quality checks and measurements is required.

Inventory management and planning

To be able to plan ahead and get the bulk advantages from their supplies, many organizations need to plan on a longer range of time. In this process, the availability of raw materials is strict so therefore the production planning and the purchasing planning side need to have real-time and correct data on their stock inventory. Otherwise they won’t have the sufficient material and production will eventually stop. Many companies that lack an ERP don’t check this data as often as they should. Or they have an incorrect data insight into their inventory (including the expiration dates of their materials/end products) stocks and lack the knowledge needed to maintain their inventory management.

Effective production processes

Production processes need to be as effective as possible, with real-time data and track & trace information. Without an ERP, organizations don't have the real-time insights into how long the production order is and the availability to have real-time labor and machine costs.  Real-time labor costs affect the costing price of the product. Therefore, margins will alter in a positive way. The production optimization process needs an optimizing correct production scheduling. 

Reduce your scrap percentages

Production machines have a specific capacity. An oven has a specific amount of space available and in order to have the most efficient usage, companies need to be able to plan on that bottleneck. Calculating these times needs to be done ahead to reduce scrap percentages.  

The right label, to the right company

Private-label products or services, also known as "phantom brands", are typically those manufactured or provided by one company for offer under another company's brand. Many customers have their own private label, and companies can only sell to that specific customer group. Organizations don’t want to risk the loss of branding by sending private label goods to incorrect customers. 

Daily prognoses

In the bread and bakery industry, production based on daily prognoses is common. Fresh food must be delivered every day, but every day is different. You therefore want to start producing your products early, after which the orders arriving throughout the day and the production numbers are adjusted.

Re-use co- and by-products 

Food processing companies need a plan on reusing rework materials for future batches, which results in removing the risk of food contamination and overall improved manufacturing processes. Strict health coding implies that you are not allowed to use different batches/lots in one and the same production order that will become 1 end product batch. Therefore, production organizations need to include these rework batches within their original production order (for example, as setup BOM).

The packaging value

Many production organizations still work with Excel files for their outgoing/ returning packaging. This outdated method doesn’t give the right insight into the value of the packaging. If the packaging stock is incorrect than that leads to the value of the financial balance also being incorrect, which will also imply risks on a financial level.   

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