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

Time to reflect - Lot Expiration

Yesterday I celebrated by birthday. (insert noise makers here)
I had a GREAT day doing all the things I like to do best. That is what a birthday is about anyway – isn't it?
This blog the topic kept running through my head- "Lot Expiration" and "Shelf Life". I know it is a morbid thought but I just had to get it out of my brain and share it with my formula manufacturing friends.
Formula manufacturers – particularly in the food industries – are keenly aware of the issues associated with lot expiration and the financial impacts it can cause when a lot reaches the end of its prescribed useful life. What otherwise was once a perfectly suitable product has become as popular as the last kid picked on the recess kickball game. Not a fun site – trust me.
So how does a formula manufacturer address the ticking clock that is always running? Here are some ways.

• Build a time machine go back to a time to address the issue. Not feasible but could be very effective.
• Reduce the time to manufacture and progress toward a make-to-order model. This is very effective for the small batch manufactures with excess capacity in the manufacturing area. By holding inventory in raw materials you reduce the likelihood of finished good lot expiration – now you have to manage the raw material expiration but managing a fewer number of common raw materials is often easier than many finished goods.
• Monitor lot production/expiration dates and notify appropriate users of lots reaching 50% of their useful life. This is pretty easy with today's technology. Imagine receiving an email from your system identifying the expiring lots with ample warning to take corrective action. As long as your ERP system data is hosted in an ODBC compliant database (such as MS SQL) then the task is pretty simple.

I feel pretty fortunate because tools are available in today's technology to deal with lot expiration. Vicinity by Vicinity Manufacturing is the primary application that I support on a daily basis. It helps my clients to reduce the time to production AND to notify user of aging finished goods lots. So 2 out of 3 is not bad. A little work with your IT group can make this issue a thing of the past leaving time to address bigger issues.
As a footnote: We are still working on the time machine concept – maybe by my next birthday we will have the perfected.
Until next time – take care and I look forward to talking with you soon