Explore How ERP Software Benefits the Bakery Industry

As Industry 4.0 witnesses more firms going paperless by adopting digital solutions, bakeries and snack firms are also taking the same path. In more ways than one, this technological evolution eliminates piles of ledgers and documents and saves a lot of time and manpower. This upgradation is possible with the adoption of a strong Enterprise Resource Planning (ERP) system. This ERP software enables the bakery chain or establishment to predict and coordinate customer demands, control capital flow, focus on sales and improve all core business operations by bringing them on a single platform. 

Why Does the Bakery Industry Need an ERP System?

An ERP for the bakery industry can help establishments overcome several challenges in coordinating multiple processes. The typical workflow involves several processes like purchasing, labor management, inventory management, logistics, and customer satisfaction. By automating all such activities, the software can reduce the burden of business management.  

An ideal ERP solution is NetSuite, as it can provide various packaging options. For instance, it uses the same formula in different BOMs (Bill of Materials), supports multiple UOM (Unit of Measurement) and so on. This is because purchase requirements and scales vary according to bakers.  

For example, certain bakers buy ingredients in pallets, stock their inventory in blocks, maintain finished products in cases and ultimately sell them as packages or loaves. Merging an ERP system with bakery business operations helps in: 

• Tracing and costing of inclusive and co-products.

• Determination of real-time inventory.

• Two-way tracking of product orders to overcome customer mock recalls and transparent audit trails.

• Inventory rotation methods like FIFO ( First In First Out), LIFO (Last In First Out)  should be supported to sort inventory by expiration date.

• Efficient warehouse management to track and trace raw bakery ingredients as well as finished goods.

• Predicting demand and supply to scale production and accurately costing finished products.

Benefits of ERP for Bakery Industry

The main objective of automating the bakery industry is to enhance operational efficiency. The following points explain how an ERP system does that.

1. Inventory management

Time management is integral in managing perishable inventory. A cloud ERP system can provide real-time information about the inventory and automate order management. The software provides the capability to monitor inventory levels and understand the available quantity. 

2. Minimize Wastage

Overstocking leads to wastage, especially in the bakery business. Keeping a stock record and tracking the movement of commodities in real-time will avoid overstocking. By reducing wastage, revenue can be enhanced.   

An efficient ERP system will have double-entry management, standardizing bakery operations and giving it a structure. Certain systems can provide advanced features like upstream and downstream traceability, which tracks the stock movement from when manufactured until delivered. This significantly reduces wastage and improves revenue. 

3. Sales Increase

One of the best ways to improve sales is by understanding potential customers. An efficient cloud solution can bring product rotations and analyze customer demands to provide personalized selling. Such systems store customer data such as transaction history, frequency, etc. This information can be utilized to understand eating trends and helps in production planning. Custom promotions and discounts can be tailored to loyal users and sent out as text messages or emails periodically. 

4. Reduced Costs

Planning operations ahead of time will undoubtedly help the bakery business reduce costs.  By automating core operations, ERPs can eliminate unwanted labor charges and streamline processes. It also reduces human error and related risks.  

By standardizing various internal functions like manpower allocation, inventory tracking, and financial audits companies can track down and cut unwanted expenses dragging them down. 

5. Enhanced Reporting

Such cloud solutions often have advanced reporting capabilities. In the present scenario where data is abundant, it is important to analyze them to stay ahead in the competitive race. The software sheds light on critical operational and financial data. It can provide custom reports based on the departments and roles. It is possible to drill down on financial statements and monitor them in real-time to understand revenue inflows and profit. 

Common Challenges Faced by Bakery Businesses

Managing Raw Material Inventory

Bakeries use several ingredients every day, often in different quantities. When stock is tracked manually, it’s hard to know what’s actually available or what’s about to run out. This usually results in last-minute buying or delays in planned production.

Short Shelf-Life and Expiry Issue

Most bakery ingredients and finished products have a short shelf life. Without regular expiry checks, items can spoil before they are used. This results in avoidable waste and potential food safety issues.

Manual Production Planning

Production planning can be guesswork without the right data. Some days, too much is produced; other days, not enough. Over time, this leads to unhappy customers and unnecessary cost pressure.

Inconsistent Product Quality

Keeping taste and quality consistent every single day isn’t easy. Even small changes in measurement and preparation can change the final product. When this happens often, customers start noticing.

High Wastage and Spoilage

Leftover products, expired ingredients, and avoidable production mistakes tend to pile up fast in a bakery. When there’s no clear view of where the losses are coming from, waste becomes harder to spot and even harder to reduce.

Pricing and Costing Errors

Many bakeries lack clarity on what it costs to make each product. Ingredient prices change often, production and other smaller costs get missed during busy days. As a result, pricing is based more on assumptions than on real figures. Over time, margins slip, even when sales appear healthy.

Limited Visibility into Daily Sales

When sales data is tracked manually or spread across different systems, it becomes hard to see daily performance clearly. Product trends are not obvious right away. By the time issues become clear, it’s often too late to respond. That makes day-to-day decision-making less effective.

Managing Multiple Outlets

Running more than one bakery location adds complexity very quickly. When data stays siloed at each outlet, teams struggle to plan and consolidate information.

Bakery ERP Features That Help Bakery Businesses Run Smoothly

Why Choose Oracle NetSuite?

Bakeries can consider NetSuite as it provides cloud-based solutions capable of running all core business processes like purchasing, sales, order management, supply chain management, manufacturing, warehouse management, financials, and more.   

Another reason for making this smart choice is because of its rapid implementation time and advanced customization capabilities. Being a cloud-based solution, the TCO (Total Cost of Ownership) is also low. In the bakery industry, owners often choose NetSuite because of its deep batch manufacturing functionality and user-friendly interface. 

Core benefits:

• Its order-to-cash, procure-to-pay and build-to-ship functionalities achieve operational excellence and improve business value.

• Take control of your production volumes using the software’s efficient supply chain management (SCM) system.

• Expand the scope of batch management through improved bill of materials, product routings, recipe instructions and quality control.

• Ensure the quality of the product through first-in, first-out (FIFO) management.

• Managing materials like lot controlled raw, individual, and bulk ingredients.

• Cost-effective production of bakery products by effective maintenance of inventory.

• Capture data from devices like barcode readers, tablets, etc in real-time.

• Take your business to the next level by utilizing NetSuite’s modern supply chain management and plan your products efficiently.

• Improve customer satisfaction by enabling a ‘buy anywhere’, ‘fulfill anywhere’ facility using NetSuite’s real-time inventory management. 

• Get a bird’s eye view of all your channels and touchpoints to deliver a standardized experience for the customer.

• A single platform that can deliver a true omnichannel experience and integrate information across the web, B2B portals, physical stores, etc.

If your growing bakery industry requires assistance to coordinate business operations, NetSuite ERP is the right solution. Book an appointment with the experts of Jobin & Jismi for further assistance.