More than half of all quality assurance (QA) managers in food manufacturing do not currently interface with their company’s Enterprise Resource Planning (ERP) system. The Bioterrorism Act, passed in 2002 to ensure the safety of the U.S. food supply from a terrorist attack, is quickly changing the role that food quality professionals play in the selection and utilization of ERP software.
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Explore This IssueFebruary/March 2006
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ERP selection was often left to a small committee that included the CEO, CFO, operations and purchasing managers. ERP packages were designed to integrate all departments and functions across a company onto a single computer system that can serve all department needs. ERP software, at its best, combines the enterprise into a single, integrated solution that runs off a single database so various departments can easily share information and communicate. When running at an optimum, this integrated approach has a tremendous payback. Until regulations were mandated by the government, QA managers were rarely considered in the ERP selection process or even utilization of the integrated system.
Section 306 of the Bioterrorism Act mandates strict record-keeping requirements for manufacturing, processing, packing, transporting, distributing, receiving, holding or importing food to the United States. In December 2004, FDA published a final rule requiring food firms to establish and maintain records that would allow inspectors to conduct a trace investigation to protect the food and animal feed supply. FDA estimated that about 420,000 food facilities were required to register under the act, and increasingly QA managers are looking to technology resources (existing in-house or acquirable) that will assist in meeting this compliance requirement.
ERP vendors have responded to these regulatory requirements in a myriad of different ways. Some vendors have simply added a lot traceability feature and suggest that, “voila” they are now able to address the Bioterrorism Act. Other ERP vendors have been proactive since the passage of the law to develop tools to provide the reporting mechanisms required beyond simple lot traceability; while other vendors are simply adding a new tab to their Web sites called “food and beverage” in hopes that a generic ERP system will suffice.
Lot traceability: A good place to start
The Bioterrorism Act makes lot traceability documentation a requirement by law, not merely an option or desirable ERP feature.
According to Rebecca Gill, vice president of Enterprise 21, TGI Ltd., a software development house (Toledo, Ohio) compliance with the Bioterrorism Act means full tracking of raw material lots through manufacturing and of finished good lots through shipment to customer.
Gill says complete reporting on lot genealogy, showing all usage of lots from vendor to manufacturing to end user is also a must. The system should also provide the ability to query end-user sales orders and see all raw material and finished good lots used for specific shipment; evaluate lots from vendors or manufacturing to see all the end-users who received shipments; and track lot properties with allowable “criteria” for each lot.
There are other functionalities that support food manufacturing audits and quality assurance concerns without being a direct response to Bioterrorism Act compliance. Those functionalities include automatic quality assurance of incoming products; various product grades with or without usage/holds; tracking of original country for raw materials; and complete data warehouse for 24/7 ad hoc reporting.
Sage Software Inc.’s ERP contains food safety and nutritional labeling features, warning of the increasingly litigious and regulated environment. Rather than the Bioterrorism Act, Sage, a division of The Sage Group PLC (London), focuses on tools for high product quality standards include powerful computerized formulation laboratory, comparative physical properties analysis, comprehensive vendor quality analysis, multiple lot tracking methodologies, quarantine and expiration date control and complete QC data history maintenance. Obviously some of these features are useful for FDA Bioterrorism Act compliance.
Other food ERP vendors have specific functionality such as BatchMaster Software Inc. (Laguna Hills, Calif.). This software provides special laboratory functions including recipe based manufacturing, allowing manufacturers to organize production activities around the recipe to produce multiple finished products.
“Recipe management enables the manufacturer to conduct nutritional and laboratory analysis with recipe revisions. Again, a valid and useful function for food ERP software, yet not specific to compliance with the Bioterrorism Act,” says Rory Job, vice president of BatchMaster.
“We have done a heap of work to significantly expand lot traceability, specifically for the Bioterrorism issues. However, I’m not sure that the (Bioterrorism) Act allows an ERP system to make you compliant…it’s all about processes and people, with your system helping but by itself it does not make you compliant,” says Michael Panosh, chief executive officer of Pronto North America, a Chicago, Ill.-based management software developer
Vigilistics Inc.’s platform is not an ERP system. It is software designed to provide the records needed for compliance under the U.S. Bioterrorism Act and for FDA regulations. It also provides records on energy use, product loss and production data for ERP systems. Most food processing companies still rely on the manual data entry of production results and ingredient usage, despite massive investments in ERP systems. The Costa Mesa, Calif.-based Vigilistics platform collects accurate and auditable production data in a template form.
Bill Schiel, vice president of sales and marketing, says the scope of the food manufacturing outreach is limited.
“We are laser focused on a small number of companies in the dairy processing business where we know our product works; 2006 is our year of quiet, confident, growth, where we can build all aspects of our company and insure success when we ‘break out’,” he adds.
ToolWorx Information Products Inc. is a Brighton, Mich., systems integrator specializing in automatic identification applications for part traceability and error proofing. All of our systems are based on a unique toolset. The company developed a Lot Track system that keeps track of all of the data required by the FDA. Additionally, the food traceability system allows tracking of which finished items have already shipped and which items are still in the manufacturing facility to quarantine any potentially contaminated containers prior to shipment.
QA Manager Integral Decision-Influencers
As varied as the ERP vendors (and other data collection software technology providers) are in responding to the compliance requirements of the Bioterrorism Act is the role of the QA manager in technology selection.
“If we were selecting a new ERP system today, I am confident that I would be much more involved in the decision-making process due to the Bioterrorism Act requirements.” Less than 10 percent of QA managers were significantly involved in the selection of the current ERP system,” says Lucia Falek, QA manager for Butterball Farms (Grand Rapids, Mich.).
After food manufacturers have invested heavily in ERP systems there is a demand, or certainly an expectation, that the ERP vendor must be part of the solution in Bioterrorism Act compliance. Striking a balance between effective ERP integration and tools for Bioterrorism Act and other regulatory requirements is not easy. Finding a balance between food manufacturing sector idiosyncrasies and a solid ERP system is challenging.
The basic ERP functions are often lacking when the focus is too heavily on the bells and whistles of the industry sector.
“Many vertical ERP applications in the food sector lack strong financials and must integrate with bolt-on third party systems,” TGI’s Gill says. Often these ad hoc, bolt-on solutions are antithetical to the whole notion of an integrated ERP system.
The biggest impact of the Bioterrorism Act may be the recognition of the decision-influencing role of QA manager in technology selection; likewise ERP and other technology vendors may start to market to this audience because regulatory requirements mandate the QA managers’ role in compliance and data collection and reporting. –FQ
Thomas R. Cutler is the president and CEO of Fort Lauderdale, Florida-based TR Cutler, Inc., a manufacturing marketing firm– (www.trcutlerinc.com.) Cutler is the founder of the Manufacturing Media Consortium of 2,600 journalists and editors writing about trends in manufacturing, and is the lead spokesperson for the ETO Institute (www.etoinstitute.org). He is also the author of the “Manufacturer’s Public Relations and Media Guide” and is a frequently published author within the manufacturing sector with more than 200 feature articles authored annually. Reach him at 954-486-7562 or email@example.com