Food Manufacturing Versus Processing
To the uninitiated, the phrases “food manufacturing” and “processing” appear to be synonyms but although there are similarities and areas of overlap, they are not, strictly speaking, the same. So, what are the differences between the two?
The Differences Between Food Processing and Manufacturing
Processing generally refers to what is known as “first level” manufacturing. Food processors take a raw product from the field and turn it into an ingredient useable by a “second level” manufacturer. The difference between processing and manufacture is what each industry does with a given product. Processing is taking a raw product and turning it into an ingredient, for instance, turning vanilla beans into vanilla extract. Manufacture occurs when ingredients are purchased and used with other ingredients to make a final product.
In our example, a manufacturer would take the vanilla extract and mix it with flour, sugar, and eggs to make cookies. Although both industries work primarily in factory settings, and processing and manufacture may occur at the same factory, the functions of manufacturers and processors differ in their day-to-day operations. Both processing and manufacture add value to the product.
Food manufacturing adds value to a list of ingredients where processing adds value to a raw product.
Additional Differences Between Manufacturing and Processing
Processing is generally focussed on the cost of processing, which includes factors such as the availability of the primary (raw) ingredient or commodity and fluctuations in their market cost. Food manufacturing is more concerned with the cost of production and looks at factors such as the availability of ingredients and fixed costs. Areas of concern include food safety and traceability, regulatory compliance, sales, and profitability. From the above, it is evident that there are not many areas of difference between the two. There are, however, more nuanced differences within the two activities.
In manufacturing jargon, “processing” has a very distinct meaning. Food manufacturing involves ingredients and formulas that are often made in batches. Once made, these products cannot be disassembled. Beer would be a good example of this. Once the hops, barley, water, and yeast have been combined, they cannot be disassembled.
Discrete manufacturing is closely related to processing, but it produces a distinct unit or object. Non-distinct products like olive oil may be divided into any volume you want but a can of soup cannot be divided into two halves because it is a distinct unit. Sometimes, discrete products can be disassembled and returned to their constituent raw materials, but this is not always possible. Process manufacturers have unique requirements compared to discrete manufacturers.
Using Enterprise Resource Planning Software to Facilitate Production
Enterprise resource planning (ERP) describes a type of software that organizations use to manage certain day-to-day business activities such as accounting, procurement, project management, risk management, compliance, and supply chain operations. A complete ERP suite may also include entity performance management and monitoring. Systems can help plan, budget, predict, and report on an organization’s performance. ERP systems are particularly useful for food manufacturing and processing operations because of the need in both industries to closely monitor food safety and traceability, ensure regulatory compliance, and track sales and profitability. There are several ERP systems designed specifically for the food industry.
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