Building a successful business in the beer industry is incredibly rewarding. But it can also be an immense challenge, especially with the continually rising materials and operating costs. Across the country, craft breweries are struggling to turn their passion into a profitable business.
However, building an efficient brewery operation is far from impossible. All it takes is an organized plan and the right tools at your disposal. That plan begins with optimizing how you manage your inventory.
Breweries rely on effective inventory management more than many businesses in other industries. Ingredients and materials have to be ordered on a strict schedule to avoid spoiling or waiting too long for batches to brew. The final product will also need to be closely monitored and tracked for freshness, including any keg storage in client businesses like local bars and restaurants.
The right inventory management software can go a long way toward streamlining those processes. Learn how you can harness the power of the right software to optimize your operations, reduce costs, and ultimately achieve greater success in this competitive industry.
1. Enhance Production Planning by Forecasting Inventory Needs
A significant part of running an effective brewery is knowing exactly when to produce which batches of beer. This level of production planning is crucial not only to avoid running out of your customers’ favorite brews but also to make sure you have the right ingredients on hand at the right time.
Order too much or too far ahead and some of your ingredients will spoil. Order too little and you might not have enough to follow the recipe and brew consistently delicious beer. That means looking into the future and forecasting based on various factors. Having a solid plan in place regarding what you’re producing, what ingredients are needed, and what schedule the process will follow is imperative for things to run smoothly. That’s where the right inventory software can make all the difference.
A quality platform helps you build that production plan through accurate forecasting based on your historical sales and demand data. Even better, it also connects that production plan to the ingredients needed so you can order exactly what you need. The result is effortlessly sticking to the plan and keeping your brewery running on schedule.
2. Better Manage Your Inventory Levels Through Automated Ordering
Historically, inventory management has often been a manual process. Even software that can track which materials are needed and when still requires inventory managers to place those orders in advance and negotiate with suppliers every time. Fortunately, this is another area where inventory management software can help.
For example, the right platform enables you to automate orders of new ingredients whenever they reach a specific threshold. That way, you avoid two major issues in the brewery industry: having too much in stock, leading to spoiled ingredients, and delaying production schedules because a manual order wasn’t placed on time.
Of course, there is still an opportunity (and need) to include manual processes in the equation. After all, common ingredient shortages and supply chain challenges can alter delivery times in unexpected ways. The ability to marry automation with manual oversight can significantly improve your inventory management processes.
3. Optimize Production Scheduling Through Accurate Inventory Lead Times
Beyond the general plan and maintaining accurate inventory levels, effective brewery inventory management also relies on a third component to ensure that your production remains on schedule. That component is knowing just how long your inventory takes to arrive after ordering. It could have negative consequences to assume that a key ingredient for a batch scheduled a week from now will take less time than that estimation. If the ingredient fails to arrive on time, your entire schedule for that entire batch gets held up.
To prevent this type of issue, it’s essential to track just how long each ingredient typically takes to order. You should also account for potential irregularities due to changing suppliers or shortages. A good recordkeeping system that feeds into a single source of truth for all of your inventory and production management can provide just that. Over time, you can build better estimates of inventory lead times, ultimately optimizing your production scheduling.
4. Minimize Supply Chain Issues Through Better Supplier Management
Record-keeping also comes into play with your suppliers. Different ingredients and materials likely come from different sources. All of them will have custom lead times but also order quantities, thresholds, points of contact, and other variables. Knowing those nuances helps minimize supply chain issues that could otherwise threaten your efficiency and profitability.
With supply chain issues continuing to be an acute issue in the brewery industry, supplier management is an especially relevant problem to solve. Simply knowing who your suppliers are and keeping that information safely stored in a single system can go a long way toward eliminating potential issues and keeping your operations and production running on time and within budget.
5. Build Resource Efficiencies Through Better Cost Accounting
The right brewery inventory software doesn’t just keep track of your physical inventory. It can also help you track the costs associated with that inventory, ultimately leading to better budget processes and less waste.
For example, you can keep track of all your order costs for individual ingredients. But beyond that, you can combine your inventory costs to build a comprehensive cost of goods sold (COGS), which allows you to price your products better and measure your profitability.
The addition of cost accounting into your brewery inventory system can help you with building resource efficiencies. If you know how much each ingredient costs and how that expense may change over time, you can better manage your budget and even evaluate when it might be beneficial to switch suppliers.
By making sure each dollar you spend is spent effectively, you can ultimately maximize your chances of profitability and business success.
6. Improve On-Time Deliveries for Key Clients and Customers
Combine the above methods, and you will be able to connect your inventory management with a key component of running any successful business: the ability to satisfy customers through on-time deliveries. This advantage matters whether you run your own brewpub, largely deliver to business clients, or both:
- When you run a brewpub, it’s important to avoid stockouts at all costs. Customers will come to you for specific favorite brews. When those varieties are out of stock, they may turn elsewhere.
- When delivering kegs and cases to business clients, you’ll most likely be operating on their schedules. A reputation for not reliably delivering the brews they have on their menus can cause them to look elsewhere for other brewery partners.
On-time delivery, of course, is only possible through a production schedule that is both planned and executed well. With the right software in place, you can make that happen.
7. Increase Quality Assurance Through Effective Keg Tracking
Inventory tracking doesn’t end with the successful delivery of the final product. When working with local bars and restaurants, it’s also your responsibility to keep track of your produced kegs currently in circulation to ensure ongoing quality. Put simply, quality means avoiding the potential of beer going stale before it’s served to customers, which can harm your reputation and customer perceptions.
Look for software that can keep track of your kegs currently in circulation, and your quality control on this end has the potential to skyrocket. Through automated alerts, you can always make sure that before a keg goes bad, you can switch it out for a fresh one of the same type.
8. Ensure Compliance Through Better, More Automated Reporting
Last but certainly not least, inventory management software can save you tons of time and remove the hassle of remaining compliant with federal and state reporting requirements.
Reports, such as the Brewers Report of Operations, require you to keep an account of how much beer you produced, sold, and discarded within a standardized time period. Building these reports by hand can take hours every month. With the right software, you can automate the process to pre-build your reports with the data already in the system.
Taking this approach doesn’t just save valuable time. It also improves the accuracy of your data and reporting, ultimately creating significantly higher chances of remaining in compliance with the authorities you rely on to keep your business running.
Transform Your Brewery Operations With Inventory Management Software
Put it all together and the right inventory software can become a game-changer for your brewery. It has the potential to transform your brewery’s efficiency and profitability, helping you not only survive but thrive in an increasingly competitive industry.But of course, getting there depends on finding the right system, focusing not just on inventory orders and tracking but comprehensive production and brewery management. Book a demo today to learn how Ekos has helped breweries like yours with our industry-specific brewery management solution.