Understanding the Importance of Lot Traceability in the Food and Beverage Industry

Food and beverage manufacturers rely on consumers’ faith that the food they eat is safe. Most manufacturers consider living up to that expectation a solemn duty, and they take every possible step to ensure that, in addition to being nutritious and delicious, their products are worthy of that trust and that their manufacturing methods comply with federal laws such as the FDA Food Safety Modernization Act. Lot traceability in your ERP system is one of the most effective ways of meeting those expectations.

Ensure Quality and Safety
Consumers are increasingly interested in knowing the origins of the ingredients in their food, as shown by the rise in popularity of limited ingredient goods and the “Farm to Table” movement. At the same time, global supply chains have introduced new sources that may not have the same dedication to quality standards. Using lot traceability, manufacturers can know exactly where every lot of every ingredient came from, and easily verify that it met quality specifications. The increased visibility into sources helps both manufacturers and consumers feel confident that the food they eat was manufactured with care.

Optimize Inventory Usage
Many ingredients are natural foods, so flavor, freshness and potency may vary. Using lot tracking, manufacturers can ensure that they use older inventory first to prevent spoilage. Lot tracking also helps with balancing the characteristics of ingredients used in each batch to ensure that product flavor and texture are consistent from batch to batch to help ensure customer expectations are always met.

Prevent Counterfeiting
Another side effect of more complex supply chains is that there are more opportunities for counterfeit goods to mingle with authentic supplies. Using lot tracking and tracing, manufacturers can help ensure that all goods reaching the consumer are authentic. When counterfeits do make their way to store shelves, tracking and tracing can pinpoint the location where the counterfeits entered the supply chain, enabling the manufacturer to take steps to prevent future issues.

Validate Deals, Deductions and Rebates
Retail and distribution supply chains rely heavily on rebates, deals and deductions to promote sales and consumption. The complex nature of these promotions makes it hard to know whether deductions are derived from legitimately qualified sales. Using lot traceability helps to validate that the business claiming the rebate actually purchased qualifying goods.

Manage Cost of a Recall
Despite their best intentions, manufacturers must occasionally recall their products, often because of problems with a specific ingredient or an issue that occurred in the manufacturing process during a specific time. Knowing the affected lots and tracking them to the retail or distribution centers can help to limit the scope—and the cost—of any required recalls. Since recalls have cost up to $600 million, according to Aberdeen Research, it’s in a company’s best interest to use every tool to limit the scope of a recall. Lot tracking and tracing is the most effective tool available for managing recalls.

Prevent Damage to Your Brand
Adulteration, recalls, counterfeit goods can all erode the trust that consumers place in your brand. An ERP system that includes effective lot tracking and tracing capabilities can help prevent damage to the brand by ensuring the quality and purity of all the ingredients you use and everything you produce. When the unthinkable happens, you will look more in control if you can immediately identify the lots that must be recalled. Track and trace are essential functions for every food and beverage manufacturer.

Source: http://v1.aberdeen.com/launch/report/research_report/10422-RR-ERP-process-discrete.asp

How an ERP Implementation Can Go Off The Rails

There is very little that has a greater effect on a company’s success than it’s ERP system, which functions as both the memory and conscience of the business and forms the backbone of every business process. Yet many companies fall prey to the same common implementation errors, which may cause the project to fail or be less effective than it could have been, Here’s a look at those common traps and tips on how to avoid them.

No Full Time Project Leader

An ERP system has tendrils in every part of the business, and it is a complex project involving multiple people from every department and many decisions that affect them all. Most companies wouldn’t plan to build a new brewery without a project plan and a strong project leader, yet companies neglect to develop a plan and to appoint a full time project leader with the authority to arbitrate decisions. The project is too complex and too time consuming to be done as an additional task along with an already full plate. It can’t be done effectively by an external consultant or a person with no organizational clout. Without a full time in house project leader reporting directly to the project steering committee, the project will not do as well as it should.

Selecting the Wrong Software

There are hundreds of ERP software applications. Some are broad in scope, designed to fit many industries; others are unfocused and don’t fit any industry well. The best solution, especially for small or mid-sized companies in less than mainstream industries—craft breweries, for example—are ERP systems designed specifically for that industry. By selecting a solution designed for your industry, you can be assured that the business processes reflect industry best practices and you will minimize the number of customizations and workarounds you need.

Lack of Goals

If you don’t know why you are implementing a new ERP system, you will never know if you have been successful. Take the time to define your goals and express them in measurable ways. “Reducing order cycle time to less than 1 day” is a better goal than “entering orders faster.”

Scope Creep

Without goals and a strong project lead, many companies drift through the implementation process and add new processes, customizations or departments to every phase of the project. Resist the temptation by sticking to your goals.

Lack of Training

Companies have limited resources, and training often seems like an easy place to cut costs. Training a few people who are then tasked with training everybody else seems like a good idea until you realize that most people only retain about 25 percent of what they’ve learned after a few weeks. Your team will not know what your new ERP system is capable of, and you will not achieve the ROI you expected because of it.

Treating ERP Like an IT Project

ERP supports your business. It may run on computers, but that doesn’t mean it’s an IT project. You need to make the line of business people responsible for its success, or it won’t succeed.

Management Commitment

If many of these points of failure sound like they stem from lack of management commitment, you get the point. Without management commitment, the project is doomed. Make it the top priority for people charged with the implementation, and take the time to get involved. With management commitment, an ERP implementation has a good shot at success. Without it, ERP is doomed to failure.