The most widely used “systems” for traceability in the food industry are low-cost and relatively simple. Conversely, they are also high in risk, affording the least amount of protection. These systems are essentially manual, relying on paper records and spreadsheets. These systems are also largely based on financial data such as purchase receipts for raw materials and invoices for finished safety margins in retrieval will be increased. The direct and indirect costs will be higher for all parties involved.
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Explore This IssueFebruary/March 2006
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Confidence: Without the necessary speed and accuracy, food processors cannot gain the confidence of their customers, auditors or regulatory inspectors. This confidence is necessary to maintain prices and a competitive advantage.
Many processors rely on their process line control (PLC) systems and manufacturing execution systems (MES) to support detailed traceability requirements. These systems generally provide a wealth of detailed operational data for the manufacturing process. While this data can be an important component in a mock recall scenario, it is limited in scope and therefore limited in its ability to support one-up/one-back traceability requirements. Critical information not addressed by these systems includes purchasing and receiving, inventory management, transportation and customer records. The inherent risk is obvious: Records provided during a mock recall or a regulatory audit must be complete. Any gaps not filled by detailed records in the one-up/one-back chain, will result in exposure to risk for both the processor and their customers. As with manual systems, customer confidence will be compromised.
An Operational System of Record
A new concept is becoming popular with food processors of all sizes and at all positions in the food chain. Much like they already use their accounting systems as their financial system of record, industry-leading food processors are utilizing enterprise resource planning (ERP) systems as their operational system of record. Serving as an operational system of record, incoming materials, manufacturing operations, inventory management and customer shipments are all traced in a manner similar to that of financial systems. The system can also be used to standardize and streamline food safety audits and mock recalls. With an operational system of record, the advantages over other approaches can be significant:
Instant, Thorough Traceability: An operational system of record provides end-to-end traceability for every action that can impact food, starting with the orders placed with suppliers and ending with receipt of finished goods by customers. At any point in the supply chain, a food processor is able to trace back to the source of all ingredients and trace forward to the disposition of all finished products. For instance, if a processor receives a notice about possible contamination of an ingredient, it should be able to immediately identify all customer orders that included that ingredient.
Confidence: With the instant, thorough traceability made possible with an operational system of record, food processors can gain the confidence of their customers, auditors and regulatory inspectors. By establishing the confidence of these constituents, processors can establish a competitive advantage that can add real, measurable value to the business.
Improved Bottom-line Performance: With an integrated operational system of record, food processors also have the ability to improve financial performance. Detailed visibility into product-line costs and profitability, manufacturing efficiency, inventory spoilage and many other operational metrics can expose hidden opportunities for improvement. Additionally, improvements in forecasting, scheduling and order fulfillment can have a positive impact on customer service. The same operational system of record that addresses the requirement of traceability can also be used to improve bottom-line profitability and competitiveness.
Over the past few years, automated traceability has become a virtual necessity to reduce industry, regulatory and customer pressures. By selecting a traceability solution with proven success in your market, you can turn implementation into a valuable tool, not an arduous part of the company’s overhead.