When there are issues or cost overruns with supply chain operations, food manufacturers may look for the problems that are easiest to detect, ranging from inadequate employee training to a verifiable breakdown in machinery. But sometimes the most persistent difficulties can be the hardest to trace, and those problems’ roots may begin long before they become noticeable.
Some of the industry’s biggest losses stem from faulty inventory management procedures; it can be easily overlooked, but it’s as essential to a healthy supply chain as employee education or mechanical upkeep. If raw materials are lost or mismanaged, it can reduce potential revenue, and food waste remains a huge problem—approximately 133 billion pounds (or 31%) of the United States’ food supply is wasted every year. In food manufacturing, the loss of raw ingredients is the second highest cost to companies (at 25%) besides labor, with the third-highest cost for the industry far behind at only 4%. It remains, far and away, one of the most difficult challenges the industry faces, and according to Todd Austin, a senior application consultant for Aptean’s JustFood ERP, many companies are aware of the challenge but nevertheless encounter difficulty in overcoming it.