Understand how to promote cost reduction in the food sector

It is a real challenge to improve the margins and indicators of the company while maintaining product quality. This becomes even more difficult when it is necessary to reduce costs in the food sector, as we are dealing with perishable items, that is, in addition to paying attention to business results, we need to worry about the health of customers.

Because of this, it is necessary to review, improve and optimize the entire process, which goes from receiving the raw material to the production line and delivery to its consumer. In addition to the financial issue, we also have the environment. After all, there are thousands of people who have nothing to eat, while corporations waste tons of food every year.

In order not to be part of this reality and still increase your business results, check out some important guidelines to apply to your management routine and strategic planning.

Track production losses

Although the rule is to work towards zero waste, it must be understood that all production has a level of loss, but it is necessary to set a limit for this. To reduce costs in the food sector, two types of losses need to be monitored.

The first is related to the end of the production line, which can result in expenses and waste of packaging, palletizing and even the actual loss of products. The second process is about the strategies of reusing these losses from the production line.

In addition, the watchword should be organization, as a disorganized production line generates not only financial and product problems, but also fiscal problems. An example of this is weights that do not match the description of the package, inadequate nutrition tables, among others.

Standardize your recipes

To have organization and control in a company, be it from any segment, it is essential to standardize steps, processes and strategies. In order to reduce costs in the food sector, our orientation is to standardize all your recipes, no matter how simple and fast they are.

By defining all the steps, quantities and tasks required for each type of recipe, you will prevent each dish or product from having different weights, non-standard flavors, and most importantly, avoid wasting raw materials.

In addition to reducing resources, this procedure is important for the evaluation of what can be removed from each dish or product without harming the outcome, and for the quality control of everything that you sell in your business.

Consider outsourcing

The food niche needs to comply with various laws and regulations, have important health surveillance documents, and still worry about business management. In other words, there is a very large flow of information and adjustments that need to be done at all times.

However, depending on the size and complexity of your business, hiring specialized labor turns out to be more expensive than outsourcing services. Therefore, one of the strategies to reduce costs in the food sector, which can be adopted by your management, is to consider outsourcing tasks.

A great example is accountants, who currently do much more than just payroll and tax clearance. The accounting professional has been developing their abilities more and more, adding many other skills and functions.

They have been responsible for aligning accounting processes, improving cash flow, and adapting misaligned processes. Your cleaning staff is another service that may easily be outsourced without harming your results.

Pay attention to storage and inventory control

Many losses in the food sector can be prevented with good storage and inventory control. Because these are perishable inputs, it is of utmost importance to pay attention to expiration dates, appropriate storage locations and their order volume.

After all, inadequate quantities of purchases that are not aligned with your sales volume result in waste and, consequently, financial losses. Thus, it is a primary factor to have an updated and optimized inventory management, so that you work in balance, that is, neither too many products nor too few.

Another orientation for reducing costs in the food sector is in relation to storage. Train your employees to understand the specifics and weaknesses of each item they receive, as well as the proper and hygienic ways to stack and store.

Your stock of products needs to be extremely clean in order to prevent the proliferation of rodents, insects and other animals and, consequently, food contamination.

As a result, you will find that, in addition to more organization, there will be a noticeable reduction in inventory losses, which means a reduction in financial losses and less need for replacement.

Deploy cost and profitability software

All of the orientations and strategies we mentioned above need technology to be done effectively. In fact, currently, archaic cost managements that do not rely on automated processes have become dangerously inefficient.

In addition to reducing the costs for your food business, management systems that operate in an integrated manner in cost and profitability management, will be able to manage all your financial resources and strategies, collect relevant data and information, and develop and analyze graphs, even if there are other branches.

All these and the most varied functionalities that the software presents are of immeasurable importance for your management, as they will help you in the decision-making and the definition of strategies to reduce costs and increase results, as well as in processes that avoid losses and waste.

Cost reduction in the food sector always faces a major challenge: the loss and waste of perishable products. As we can see, while we cannot eliminate losses entirely, it is possible to reduce them strategically, so that they do not mean major financial damage. However, to accomplish this and for an efficient management, there is no escape from automation.

If you have had difficulty managing your company’s costs, contact us and speak to one of our consultants! We can help with your decision-making and knowledge of the costs involved in your operations.