How Dynamics 365 Business Central Helps Food Businesses Cut Food Waste

 

UN research shows that 1.3 billion tons of food are discarded before consumption. That is almost 1.3 billion metric tons. This is an alarming situation, as a precious resource is being wasted.

ERP for the food industry helps improve operations by driving sustainability and eliminating food wastage.

Saving food would help feed many who are hungry and below the poverty line.

This is why corporate sustainability is one of the important aspects of top ERP systems are driving today. It is the foundation for economic growth and social well-being.

Microsoft Dynamics 365 Business Central is an ERP system that offers streamlined business operations. The system utilizes inventory intelligence, warehouse optimization, and real-time data analytics to reduce food waste.

It is reported that businesses using the food manufacturing ERP system are seeing 20–30% less waste.

Let’s explore how Business Central supports sustainable food operations for modern businesses.

Why Food Waste Is a Massive Business Problem

Food is not only an environmental issue but also an economic one. When a product expires, it represents the loss of purchase, production, warehouse storage, transportation, and disposal costs. It leads to reduced customer trust and lower profit margins.

This is because food businesses face problems like overstocking, poor production planning, product recalls, lack of batch tracking, inaccurate demand forecasting, and manual inventory counting.

All of this happens because traditional spreadsheets are insufficient for managing business operations.

How Business Central Supports Sustainable Food Operations

Business Central empowers food businesses by offering them real-time visibility into all their operations. They can easily track their manufacturing, production, warehouse, and finance operations with advanced features.

It allows businesses to gain complete control over their operations and discard products before they expire. They can react in time to prevent any kind of issues.

Business Central offers features that include:

• Supply chain visibility
• FEFO inventory allocation
• Production planning
• Batch and lot tracking
• Barcode integration
• Power BI dashboards
• Expiry date management

1. FEFO Inventory Management

FEFO stands for First Expired, First Out, and it is a priority for every food business operating today. It is part of businesses’ inventory strategies today, as the focus is increasingly on products nearing expiration.

It leads to the priority disposal of expired inventory, improved stock rotation, and higher inventory utilization. It also improves warehouse efficiency and reduces write-offs.

Manual, time-consuming processes are replaced with complete batch traceability, as the ERP manages inventory.

For example, if two batches of butter arrived, Batch 1 expires on 20 May and Batch 2 expires on 3 April.

FEFO will prioritize the batch because of its earlier expiration date.

Businesses can make expiration-related inventory decisions on a priority basis that will truly be accurate. It also eliminates the possibility of ordering newer inventory while the old one remains in storage.

2. AI-Powered Demand Forecasting Reduces Overstocking

Even if a food manufacturer can produce tons of inventory and has the space and capacity to stock it, the market doesn’t need to buy it. Producing 10,000 units does not mean that people will buy all 10,000.

For example, if the food business procures 8,000 products based on the demand for 5,000, the remaining 3,000 will be overstocked. Not only that, but the expiry date approaches faster when they are kept in the warehouse for a long time, and they eventually go to waste when discarded due to expiry.

Food waste is also caused by overproduction. When a lot of food is produced and stored but cannot be delivered, it spoils, creating food waste.

Business Central helps businesses eliminate food waste by providing improved forecasting based on historical sales, seasonal demand, customer trends, and geographic demand.

The increased visibility into the essential KPIs for forecasting helps them plan efficiently. The planning will be more accurate.

The historical data analysis allows the business to forecast demand and produce inventory that is in demand. Only the relevant and accurate number of products are produced.

Historical analysis is the starting point for identifying demand patterns. It allows you to forecast, leading to more accurate production.

This saves the business from overstocking, improves cash flow, reduces spoilage, and enables smarter production. It can increase inventory turnover with effective demand planning.

3. Complete Batch and Lot Traceability

Food safety is a top priority for countries, as it is directly related to individuals’ health. Business Central offers batch and lot tracking to trace products.

Food retailers can identify the production batch, supplier, expiration date, warehouse location, and custom shipment history. The result is reduced product recalls. The affected batches are identified instantly, resulting in less waste, better compliance, faster recalls, and improved customer confidence.

Product traceability is also essential to maintaining the quality and safety standards required for food compliance. The sources of the product must be known to the business.

In the event of any contamination reported by the supplier, it is mandatory to disclose which products were affected, how many were affected, when they were produced, and how many customers purchased them.

Items are tracked in Business Central with serial numbers, creating a digital trail in a configured food operation.

Not only that, it offers sustainability with targeted recalls that prevent damage to unaffected products. The entire inventory cannot be treated as affected by a problem in a single product. Only the affected products are easily identified, which prevents unnecessary product disposal.

4. Automated Replenishment Prevents Both Overstock and Stockouts

Sustainability also comes from automatic replenishment. The need for accurate inventory leads to customer satisfaction, whereas excess inventory creates problems.

Overstocking and stockouts are the biggest problems of every food business. It may seem small, but it creates chaos and has adverse effects on the business. Excess inventory leads to waste, and ordering too little leads to lost sales.

Business Central comes to the rescue by offering sales history, lead times, and seasonal demand. The business gets recommendations on maintaining minimum and maximum inventory levels.

The replenishment process and planning parameters allow only the production of the required products. The system-generated recommendations help manage thousands of SKUs.

This would not be possible otherwise, even with manual operational management. Only the best ERP system can automate all these processes.

It benefits the business by improving purchasing accuracy, reducing warehouse costs, lowering spoilage, improving supply planning, and reducing overbuying.

5. Barcode Scanning Reduces Human Error

Manual data entry is the biggest problem of all time in every field. It leads to errors and inaccuracies, and the team spends a lot of time on a single task. It also leads to mistakes and frustration among the teams.

An incorrect entry of the item number, location, or quantity will cause chaos.

For example, if the item is stored in the wrong warehouse location, the team will not be able to find it. It will take them a lot of time and effort to track the product.

Barcode scanning comes to the rescue by accurately scanning products and bins. Business Central integrates barcode and mobile warehouse solutions.

6. Inventory Aging Helps Managers Identify Waste Before It Happens

The food business needs to identify products at risk of becoming waste. To ensure sustainable inventory management, it is essential to identify these products. The age and shelf life of the products have to be tracked to maintain sustainability.

Managers can identify products that are on the shelf and nearing expiration.

After identifying the products, corrective actions can be taken. These products can be prioritized for sales, promotions can be offered, and the inventory can be moved to another location.

The eligible products can be returned to the suppliers, and the slow-moving inventory can be investigated.

So, identifying the inventory early can help resolve the issue.

7. Warehouse Management Is Critical to Reducing Food Waste

Managing sales demand, raw materials, and finished goods is difficult for food businesses. They have to deal with these complexities.

If a sales team receives a large order, they need to contact the production teams to check raw material availability and prepare the goods. Warehouse teams also need to collaborate to determine whether there is enough space to store the products.

So, the connection between the teams is significant for carrying out operations that benefit the business.

Business Central integrates all operations for seamless data sharing through a unified platform. The sales, inventory, manufacturing, and purchasing processes are connected.

For example, if manufacturers get a big order, the production team can assess available inventory, plan execution, and determine whether any materials are missing and need to be ordered.

This is how the buyers avoid purchasing excess raw material; they know how to order and how much to order.

8. Raw Material Waste Can Be Reduced Through Better Production Planning

Food waste is not only connected to product expiry but begins earlier in the production process. When you are producing the product, the ingredients, time, and effort needed to create it are wasted if it expires.

The material can be damaged, or incorrect qualities can also be acquired. In the case of disconnected inventory, the items ordered may be incorrect or already present in the system.

Business Central connects material requirements and production schedules to save the business from these hassles. Businesses that process beverages, sauces, frozen foods, and packaged meals use a wide range of ingredients.

The visibility allows the business to acquire the right amount of material at the right time. They leverage the manufacturing and planning capabilities of Business Central.

9. Supplier Management Can Reduce Waste Before Products Reach the Warehouse

Food waste is not solely the responsibility of the business; suppliers can also trigger it.

You must be wondering how it is possible.

They add to food waste through inconsistent lead times, incorrect quantities, and damaged products.

The products’ insufficient shelf life also contributes to the problem.

One such example would be a product with a 30-day shelf life, delivered by the supplier to the distributor, who has only 15 days to store and sell it.

Until the product reaches the end of its shelf life, it cannot be consumed by the user.

Business Central helps in analyzing vendor and supplier performance. This way, the business knows which supplier is trustworthy and can be contacted for future orders. The credibility and reliability of suppliers matter the most for businesses.

10. Copilot Can Help Employees Analyze Business Information Faster

AI has changed how businesses operate. It allows them to work more intelligently and accurately while saving time.

The Copilot in Business Central is doing the same. It is helping the business extract the most relevant information and take corrective action.

Users can now use NLP to ask for what they need, rather than navigating multiple screens and reports that waste time and create confusion. They can ask questions in plain language and get a clear answer.

The business can use operational data whenever it wants to make important decisions. AI serves as an added source of expertise for the business.

11. Power BI Can Turn Business Central Data Into Sustainability Insights

Data needs to be utilized by businesses, and they need to act upon it without any delay. Microsoft Power BI allows businesses to dive deep into their data, offering insights that are valuable to the business.

Power BI connects to Business Central, allowing users to create dashboards. This is how they can visualize operational performance.

A food business can create dashboards for stock levels, inventory turnover, product returns, slow-moving products, expired inventory value, purchase trends, and warehouse performance.

They can also evaluate supplier performance and forecast accuracy. Management can identify issues earlier rather than waiting for a quarterly financial review.

Food Recalls Become More Targeted

Recalling a product can be costly for a business. The real problem arises when product recalls are indiscriminate.

After discovering issues in one batch, the business discards all products due to the absence of a reliable traceability system. This leads to the removal of all products that cannot be easily identified as having an issue.

It is significant to have batch and lot tracking to clearly identify the affected inventory.

This is how they will be able to discard the affected product while keeping all the others on the shelf.

It is essential for maintaining food safety.

12. Cold Chain Integration Can Protect Perishable Inventory

Some temperature-sensitive products require special care and must be visible to the business. These include frozen food, meat, seafood, and pharmaceuticals. The required temperature needs to be maintained to store the products.

Business Central is integrated with cold chain monitoring solutions to enable seamless data sharing for products. It flags only the affected inventory, saving the business from discarding the whole lot.

Business Central for Different Food Industry Segments

Food manufacturers need Business Central to manage multiple recipes and production processes. The ERP system integrates sales, inventory, production, and financial processes to improve accuracy and production management.

It helps maintain sustainability by increasing the visibility, transparency, and traceability of production processes.

Food Distribution

Distribution is a lengthy process that involves managing multiple suppliers, warehouses, and catalogs.

Business Central allows distributors to manage their operations with a centralized solution that makes sales orders and warehouse operations visible.

Business Central allows food manufacturers to connect all their business processes for efficient food management.

Manufacturers can leverage advanced features to manage their recipes, production runs, and ingredients.

The ERP solution provides complete visibility into all processes, ensuring operational transparency.

Grocery and Retail Businesses

Keeping up with demand is difficult for businesses. There is a lot of uncertainty, as a product in demand today may not be selling tomorrow. So, it becomes critical to keep up with increasing demand.

A broader view of customer demand becomes visible once Business Central integrates sales, inventory, and purchasing data. This allows retailers to analyze product performance and make decisions that help meet demand.

Cold Storage and 3PL Businesses

Today, ERP systems for the 3PL industry are making a difference by helping manage warehouse operations efficiently.

Food businesses cannot operate until they get complete visibility into warehouse locations, inventory, and batches.

Business Central offers it with IoT and transportation integration. This helps the business gain insight into logistics operations.

WMS Integration With ERP eliminates data fragmentation and offers seamless communication between systems.

How to Build a Food Waste Reduction Strategy With Business Central

There is a misconception that purchasing the best ERP system will solve all your problems. No, that is not necessarily true because you need strategic planning for its successful implementation. The services of a Business Central partner for ERP implementation are the first thing to look for.

Then you need to carry out the analysis of your current business processes by identifying:

• What products expire the most
• Are there any issues with the suppliers
• What’s the procedure to track inventory
• Identify the over- and understocked products

Business Central Implementation Best Practices for Food Companies

A successful Business Central implementation requires proper planning, configuration, data migration, training, and ongoing support. Businesses should assess their existing processes and identify areas for improvement in inventory visibility, production planning, warehouse management, and reporting.

Dynamics 365 Business Central implementation services aim to configure the system according to their operational requirements.

Moreover, it is equally important to learn how to choose the Right Dynamics 365 Partner for a more informed selection.

Conclusion

It is important to improve operational efficiency to sustain business operations. Food that goes to waste is a lost opportunity due to inaccurate inventory records, damaged shipments, expired products, or unnecessary purchases. It adds to the financial loss.

Business Central offers operational efficiency that helps in maintaining sustainability. It offers features such as demand planning, lot and batch tracking, FEFO inventory management, barcode scanning, automated replenishment, cold chain integration, and actionable insights via Power BI.

Implementing the ERP system across business processes will truly deliver results.

Food manufacturers, distributors, and retailers can use it to manage their operations, resulting in less waste, greater visibility and transparency, and higher profitability.

FAQs

How does Microsoft Dynamics 365 Business Central help in reducing food waste?

Dynamics 365 Business Central streamlines all food operations and offers improved demand planning, visibility, warehouse and inventory management, and AI integration. It helps the food business make better purchasing decisions and manufacture the right number of products.

How does Business Central help with batch and lot traceability?

Business Central helps track items with batch and lot traceability. It enables accurate tracing of products from suppliers to warehouses.

Does Business Central support food overproduction?

Business Central allows businesses to prevent overproduction, which compromises operational efficiency. Features such as demand planning, replenishment processes, and production planning help accurately assess and plan production.

What role does Business Central play in inventory management?

The centralization of operations across locations allows businesses to check inventory movement without any difficulty. Food businesses can identify slow-moving products and eliminate unnecessary purchases.

How do Power BI and Business Central help in monitoring food waste?

Power BI and Business Central help monitor food waste by integrating to provide dashboards and reports that identify potential waste. Tracking KPIs such as inventory turnover, stock levels, slow-moving products, and supplier performance helps develop strategies to reduce waste.