The cost of ingredients has been rising lately and shows no signs of slowing down. Recent data reveals that in July of 2022, food costs rose by 1.3% even though the general inflation rate started to slow.
A closer examination of the food and beverage sector in the wake of rising inflation reveals shifting consumer and business habits. Brands have turned to new ingredients, explored alternative supply chain partners, and embraced other tactics to survive.
Food and beverage companies can also leverage product specifications to boost efficiency to counter higher ingredient costs.
What is digital specification management?
Digital specification management is the practice of creating, storing, and maintaining digital specifications for products and ingredients. These specifications can include detailed technical descriptions and information on materials, attributes, and testing.
Digital specification management ensures that all stakeholders have access to the most up-to-date and accurate information about the product and its ingredients. It also compels manufacturers or processors to adhere to the specified requirements. This safeguard reduces the possibility of errors or misunderstandings during the development process.
These systems often include features such as version control, collaboration tools, and integration with other solutions, such as computer-aided design (CAD) and product lifecycle management (PLM) systems. These tools allow stakeholders to access and update the specifications as needed while tracking changes and approvals over time. This strategy is a great way to combat inflation, allowing brands to source quality ingredients while maintaining cost efficiency. Plus, it makes it easy for brands to comply with established regulations.
Fight inflation with digital specs
Digital specification management can be a powerful tool in fighting inflation, since it helps companies cut costs and increase productivity, ultimately leading to lower prices or better margins. There are several ways in which digital specification management can help:
Improved efficiency. By centralizing all specifications digitally, companies can reduce the time and resources typically spent on manual processes, such as tracking down and updating paper-based documents. As a result, this approach can lead to increased productivity and reduced costs.
Increased collaboration. Digital specification management tools allow for easy collaboration and communication between teams, helping to reduce miscommunications and errors that can lead to costly delays and rework.
Better supplier management. Digital specification management can help companies manage their supplier relationships better, ensuring they get the best prices for the materials and components they need.
Enhanced supply chain visibility. Digital specification management can provide real-time visibility into the supply chain, helping companies anticipate and better respond to disruptions and price fluctuations.
How can it help brands mitigate ingredient inflation?
By managing product specifications effectively, brands can source alternative quality ingredients while maintaining cost efficiency:
Improved inventory management. Brands can track their inventory levels in real time, ensuring they have the right amount of ingredients to meet demand without over-ordering and incurring unnecessary storage or transportation costs. This can help reduce waste and minimize the risk of lost or expired ingredients.
Closer supplier relationships. Companies can build stronger relationships with suppliers by providing accurate and up-to-date information on the ingredients they need to source. This can lead to better pricing and more favorable contract terms, helping brands reduce their ingredient costs.
Enhanced production efficiency. Finally, brands can optimize their production processes, improve quality control to minimize ingredient usage, and reduce waste. This can help them to lower their costs and increase profitability.
Digital specification management allows brands to track the quality and consistency of their ingredients, ensuring that they meet their standards and that their products remain consistently high-quality.
Best practices for managing product specs
Maintaining cost efficiency is vital when it comes to managing product specifications. Fortunately, there are some best practices that brands can use to stay ahead of inflation.
1. Create a central repository for all product specifications. This consolidation ensures that all relevant information is easily accessible to all team members and stakeholders.
2. Clearly define roles and responsibilities. For example, assign specific team members to assume responsibility for managing and updating product specifications to prevent confusion and ensure consistency.
3. Rely on a standardized format. Use a consistent format for all product specifications to make them easier to read and understand.
4. Regularly review and update product specifications. Ensure that they’re accurate and up to date by periodically reviewing and updating them as needed.
5. Communicate changes to relevant parties. When changes are made to product specifications, communicate these changes to all appropriate parties, including team members, stakeholders, and customers.
6. Use version control. Use version control software to track changes to product specifications and ensure that everyone is working with the most updated iteration.
7. Take advantage of appropriate software tools. Use software tools such as product lifecycle management (PLM) software to help manage and organize product specifications.
8. Implement a review and approval process. Establish a process for reviewing and approving changes to product specifications to ensure that they’re accurate and meet all relevant standards and requirements.
Make managing product specifications easier
To combat the inflated prices of food and beverage ingredients, brands must focus on driving efficiency through data sharing and product specification management. TraceGains allows food and beverage companies to manage their product specifications easily.
By connecting with suppliers, TraceGains enables businesses to access, compare and analyze data from their supply chain partners quickly and securely. This allows food brands to quickly identify the best ingredients at the most competitive prices—whether that’s based on cost, quality, or availability.