Best Practices in Food Traceability: A Cost Effective ...

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At a Glance:

• This paper highlights how food safety management systems enable best practices for food and beverage manufacturers.

• A cloud-based manufacturing ERP system enhances food safety management with automated and accurate traceability based on quality best practices.

• Consolidated data so food and beverage manufacturers can more quickly facilitate audits and respond more effectively to recalls.

• The Plex Manufacturing Cloud is designed to encourage best practices and can be easily configured to suit the needs of individual food and beverage manufacturers so they can effectively meet unique quality challenges.

Best Practices in Food Traceability: A Cost Effective, Proactive Approach Reduces Recall Risks

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Food and Beverage Traceability Challenges

Today’s frequency and cost of food and beverage recalls harm the companies directly affected and potentially all manufacturers in the industry. The ripple effect has prompted calls for more stringent regulations and more rigorous documentation requirements resulting in the Food Safety Modernization Act (FSMA) being signed into law in early 2011 to give the U.S. Food and Drug Administration (FDA) the authority to inspect records based on reasonable probability versus the previous credible evidence and can suspend registration which effectively shuts down a facility. FSMA was instituted to change the model from “find and report” to a more risk mitigation approach of “prevent to protect.”

From a regulatory standpoint, processors only need to trace one-up and one-back, from incoming suppliers (not their suppliers) and outgoing to customers (not necessarily to the final consumer). The current trend in the industry however is for “farm to fork” traceability. Final branded products or retailers may combine the traceability of each individual supplier to trace back to anywhere in the supply chain. To meet the industry recordkeeping and lot-tracking requirements demanded by the U.S. FDA, USDA, and many other regulatory agencies, all food and beverage manufacturers must be able

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to quickly “track and trace” every ingredient in their products, from receiving, processing, packaging, and shipping to any customer location. They must be ready to respond at any time, within hours for the U.S. FDA, when notified of a food safety event.

Many food and beverage manufacturers still keep paper-based records on materials movement and limit tracking to incoming ingredients and outgoing finished goods. This makes responding to a food safety event a paper chase, which includes pulling relevant documents together but rarely allows manufacturers to isolate the specific lots of goods that might be affected. They may have to recall anything related to the production process—costing much more in time, lost product, and brand value.

Traceability is just one tool in the food safety toolbox however. A comprehensive food safety management system includes a risk-based approach to potential safety issues as per the FSMA requirements. This requires a system that enforces greater rigor to track not only incoming and outgoing moves, but also every move and operation in the supply chain.

The New Model

A cloud manufacturing ERP solution is the key to unlocking best practices in food and beverage documentation for improved quality and traceability. Since a cloud solution is maintained and managed in a highly secure environment off-premises, manufacturers can focus on quality and improving processes rather than supporting their ERP environment. Cloud solutions make it much easier to share quality information from suppliers and make it readily available to customers in real time at anytime, from anywhere, on any mobile device.

What does this mean for food and beverage manufacturers?

• Data is collected on the plant floor in real time via barcodes that carry any amount of information.

• All data can be correlated easily, at any time, in different contexts that may be appropriate in the case of a recall.

• A single, central database makes it easy to collect and store information from suppliers and lot numbers to expiration dates. Data is stored forever.

• All data is readily available—information can be accessed by customers, distributors, and suppliers, enabling seamless communications and corrective action tracking, particularly useful in case of a recall.

• Traceability trees can be produced to visually navigate a suspected lot to isolate a potential issue.

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Standard Traceability Practices: Reactive and Costly

Standard practices are often reactive. If a quality or safety problem is identified in an ingredient or food product, the distributor or retailer (or perhaps a regulator or consumer) notifies an account representative who notifies the quality teams. The quality team will then have to:

• Wade through paperwork and numerous systems to identify the root cause.

• Gather processing and shipment paperwork.

• Analyze the problem.

• Notify the supplier of a subpar ingredient.

Using best practices in traceability, quality professionals spend more time preventing recalls than responding to them.

Once the quality teams have identified the problem, employees must:

• Manually search all paper records for details on the receipt of the bad ingredient.

• Reconcile the amount of raw ingredients received with usage based on the receipt and processing dates.

• Identify all potentially affected products and quarantine them.

During a recall, all resources that may be focused on proactive quality efforts or other projects are diverted to handling the situation until it is resolved. This process must take priority and can take considerable time. With every passing day, total costs rise and the risk of a large-scale recall or public illness increases.

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Traceability Best Practices: Proactive, Cost-Effective Prevention

With a manufacturing cloud ERP, quality professionals spend more time preventing recalls than responding to them.

When a quality problem is identified, the distributor logs onto the system (even if the distributor is not a subscriber to the system) and creates a problem report, noting the unique identification number, batch number, or barcode scan. The problem ticket triggers an alert inside the system.

Quality staff receives the ticket, along with a complete traceability tree for the problem product, including all ingredients. If there are multiple complaints, the system can aid in a root-cause analysis by identifying commonalities. With the click of a mouse, the quality team can direct all or some of the ingredients within the identified batch to be quarantined inside the software, preventing their further use on the production floor.

A rich database containing production data becomes an even more valuable business asset for food and beverage manufacturers in the event of a recall.

The software quarantines the inventory not yet consumed and all finished goods still in stock, identifying any shipped products that need to be recalled if needed. Notifications are immediately sent to all distributors and customers.

The U.S. FDA requires food and beverage manufacturers to respond within four hours. With the use of technology, the same result is achieved in just minutes. Not only does technology based on traceability best practices generate faster, more accurate results, it eliminates hours upon hours of manual labor, the possibility for human error, business interruptions, and any risks to the company’s brand or to the public. Instead of tracking documents or mimicking paper-based systems, a cloud manufacturing ERP manages and tracks every step during production while measuring and recording data based on built-in quality best practices—and it’s all done in real time.

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Real-Time Production Data

A rich database containing production data becomes an even more valuable business asset for food and beverage manufacturers in the event of a recall. Depending on product and geography, they may be subject to audits by multiple other regulatory agencies (SQF, BRC, et. Al) who require periodic audits to be completed. With cloud manufacturing ERP, all the required information is readily available, eliminating days or weeks of preparation and making it easy for auditors to complete their work in hours instead of the days or weeks that is more typical.

The data collected for track and trace is also highly valuable for quality and production processes and often results in companies identifying issues before they leave the facility—which is obviously the preferred scenario to shipping tainted product to customers. All of this translates into reduced effort and disruption to the business.

Continuous Quality Improvements

A cloud manufacturing ERP enables best practices for today and creates an environment for food and beverage manufacturers to continuously improve their quality and traceability processes—effectively keeping up with the ever-changing food safety legislation and customer requirements.

Plant floor data can be used to improve decision-making with real-time data rolling up into easy-to-read dashboards and easy-to-share reports. Quality reports can be administered and stored online so processing automation performance can be reviewed. Manufacturers have anytime access to process data and can refine their preventative maintenance programs at will to ensure the highest quality procedures.

A Case Study in Traceability

Aaron Thomas Company, Inc. (ATCO) is a full service contract packaging company providing specialist services from bundle wrapping to pouching, pallet displays and more. Customers span the food industry all the way from Fortune 500 companies to small and midsize businesses.

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Dealing with customers who manufacture food, nutraceuticals, and pharmaceuticals, Aaron Thomas needs to track 100 percent of its inventory at all times. As a contract packager, customers fully rely on them for centralized inventory visibility, quality controls, and the traceability to perform recalls in a short period of time.

The company implemented a manufacturing cloud ERP to gain real-time visibility into inventory and automate its quality control process. With a fully standardized quality control and compliance process, users can monitor which internal and external audits have been completed, when they were performed, and by whom. Mock recalls can now be conducted in 7 minutes with all documentation sent to a customer in under an hour—a process that previously took several people and several days.

The Plex Manufacturing Cloud—Built on Best Practices

The Plex Manufacturing Cloud is a cloud-based manufacturing ERP for food and beverage manufacturers with best-in-class traceability. It includes support for developing and maintaining Hazard Analysis Critical Control Points (HACCP) plans and the newer Hazardous Analysis and Risk-based Preventative Controls (HARPC) as part of a robust manufacturing operations management (MOM) solution.

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“From a quality perspective, we need to measure waste and recalls as well as ensure quality checks are being performed on schedule and at the right points in the process.”

—Nicholas Jones, Operations Manager at Aaron Thomas Company

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Traceability and quality best practices are built in to mitigate the risks in food safety events that result in costly investigations and recalls. With the Plex Manufacturing Cloud, food and beverage manufacturers can focus on maximizing productivity and safe, quality products while protecting their customers, company, and brand from food safety issues. Not only do food and beverage manufacturers get best practices in traceability but they also get a solution that was designed for best practices manufacturing—in one solution.

About Plex

Plex is the Manufacturing Cloud, delivering industry-leading ERP and manufacturing automation to more than 500

companies across process and discrete industries. Plex pioneered Cloud solutions for the shop floor, connecting suppliers,

machines, people, systems and customers with capabilities that are easy to configure, deliver continuous innovation and

reduce IT costs. With insight that starts on the production line, Plex helps companies see and understand every aspect of

their business ecosystems, enabling them to lead in an ever-changing market.