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From: Food Quality & Safety magazine, August/September 2010

Track, Trace Technology Drives Business Improvements

These tools increase efficiency, cost savings, and quality control

by Michael Gay

The food and beverage manufacturing industry faces challenging market conditions on multiple fronts: product safety requirements, razor-thin margins, unique customer orders, and constantly varying stock keeping units. To meet such challenges, manufacturers turn to tracking and tracing tools. Capable of tracking materials and products within a single plant or throughout a network of plants, these tools have the potential to provide a complex range of benefits and competitive advantages. While tracking and tracing finished goods is now an established business process for food and beverage manufacturers, many manufacturers have realized that their approach can make all the difference.

Food and beverage manufacturers have traditionally relied on manual data collection methods to provide a best estimate on product and ingredient tracking, with reports based on paper records kept in filing cabinets. Automated systems, however, are providing manufacturers with access to dramatically more reliable real-time information. Such technology enables manufacturers not only to meet regulatory demands but also to respond more effectively in product recall situations—tracking products faster, more accurately, more efficiently, and more cost effectively. This also helps manufacturers establish brand value and provide a quantifiable return on investment.

Benefit #1: Improved Data Collection and Reporting

Given heightened awareness of the perils of terrorism and growing food and beverage safety issues around the world, protecting international food and beverage supplies has become more important than ever. This challenge is driving the push to track and trace food products throughout production more quickly and effectively than can be done using a manual solution.

An automated solution allows the user to collect genealogy data more effectively and with increased accuracy and to store it electronically in an auditable database where the information can be integrated with supply chain information. Manufacturers implementing new tracking and tracing systems gain access to more reliable and accurate information, pinpointing where products were shipped and what components were used in each product. Additionally, this holistic view gives insight into the complete supply chain and allows manufacturers to:

  • Accurately and electronically collect tracking details at all stages of production;
  • Identify the sources of ingredients used in or allocated for food production;
  • Identify businesses to which products have been supplied;
  • Adhere to tracing systems and procedures;
  • Make tracing information available to authorities on demand; and
  • Adequately label or identify products.

Such technology enables manufacturers not only to meet regulatory demands and respond more quickly in product recall situations, but also to be much more accurate and cost effective.

Companies that successfully improve the supply chain through responsive manufacturing processes have the opportunity to increase both revenue and brand marketability by earning prime shelf space at leading grocery and retail outlets.

Benefit #2: Enhanced Supply Chain

A well-implemented automated product tracking and tracing solution provides a view into the key details of production throughout the supply chain, allowing manufacturers to respond better to demands at the retail end of the food and beverage manufacturing supply chain. To reduce extra inventory held in stockrooms, for example, many retail outlets are looking for manufacturers to ship just enough product to replenish their shelves. In an increasingly competitive market, food manufacturers without the ability to respond to such demands risk losing valuable contracts.

However, to schedule production and get the product there on time, food manufacturers require real-time information on variables such as current production status, what is being manufactured, how much has been produced, and where it is in the shipping process. In a manual system, production feedback is only sent when a finalized product enters finished goods inventory on a pallet; this information can be delayed for up to 24 hours from the time of production. Such delays limit a company’s ability to respond to customer requests for information on delivery dates or confirmation that an expedited order can be delivered on time.

In contrast, automated track and trace solutions allow production tracking through each manufacturing area, supplying the key data needed to make informed decisions on actual completion dates. Advanced systems can also help manufacturers better meet customer requests for expedited orders by easily revising production schedules and more directly routing priority products through the manufacturing process.

Companies that successfully improve the supply chain through responsive manufacturing processes have the opportunity to increase both revenue and brand marketability by earning prime shelf space at leading grocery and retail outlets.

Benefit #3: Increased Inventory Accuracy

Food and beverage manufacturers are also working to reduce costs and increase efficiency related to inventory. These continuous improvement processes are focused on carefully measuring and managing raw materials while maintaining control over finished goods inventory. To meet such goals, companies can use tracking and tracing systems to monitor and record actual usages in real time, enabling far more precise inventory control compared to manual systems, in which cycle counting is the norm.

Additionally, automated tracking and tracing solutions can track the amount of actual material used at each manufacturing stage and can automatically deduct from inventory levels in business systems. This capability enables manufacturers to track inventory levels in real time and order only the amount of raw material needed—an advantage that eliminates the need for extra stock, frees capital, and reduces overall operating expenses.

Benefit #4: Reduced Costs

Raw data collected through an automated tracking tool can provide a more complete view of the actual cost to manufacture each product by identifying the costs for each step in the production process, including:

  • Actual amount of raw materials used;
  • Yield from conversion processes;
  • Quantity of good product produced;
  • Amount of scrap;
  • Labor costs involved in each process step;
  • Utilities employed and their quantity;
  • Cycle time for each step; and
  • Equipment performance, including efficiency, downtime, cycle time, and production rate.

Using such data, companies can examine specific costs associated with individual production areas and help business leaders make decisions that will reduce manufacturing costs. Additionally, data from tracking and tracing applications can be compared to actual cost data in the company’s business system, enabling a systematic comparison of actual costs at each manufacturing step. For example, waste streams can be analyzed to determine total cost, then superior production days can be compared to sub-par days to understand differences in cost and the potential value achieved through superior performance.

Moreover, by looking deep within the production process, automated tracking and tracing tools enable food manufacturers to identify the root causes behind production problems, prevent potential product quality issues, and fortify the integrity of product and brand lines.

The Competitive Advantage

Succeeding in today’s competitive food and beverage manufacturing industry means ensuring that consumers can consistently rely on a finished product’s taste, texture, shape, and smell. From batch to batch and facility to facility, products under the same brand banner must maintain the same high standards and qualities. Failure to do so can result in uneven or declining sales and damage to valuable brand equity.

For food and beverage manufacturers, maintaining consistency across facilities and batches requires having enough correlated data that can be analyzed to identify needed improvements in operations. Successful companies use tracking and tracing tools to analyze key data at each step of the manufacturing process, including the source of raw materials used, current operating conditions, product quality, and even the personnel working when a given batch is created. Using such data, company leaders can identify the optimal conditions that lead to superior batches—and products with excellent yield and quality.

Using current automated tracking and tracing tools, manufacturers can examine even the smallest factors that might affect final quality. A cookie producer, for example, might look to see if final quality is impacted by the use of a specific mixer or industrial oven in the manufacturing line. External factors, such as water supply and relative humidity, can also be isolated to examine the impact on a batch’s final quality.

Identifying granular areas for improvement generally requires a systematic approach to data collection, involving tracking and tracing tools capable of analyzing specific data points. Properly implemented automated tracking and tracing solutions can collect this critical production data and provide applications that give users the ability to analyze and understand relationships to determine the cause of quality problems.

Moreover, by looking deep within the production process, automated tracking and tracing tools enable food manufacturers to identify the root causes behind production problems, prevent potential product quality issues, and fortify the integrity of product and brand lines. No longer limited to collecting data on product yield and quantity, current tracking and tracing tools are helping manufacturers implement revolutionary new capabilities to improve efficiency, increase cost savings, and strengthen product quality control.

Gay is Rockwell Software CPG Industry Manager for Rockwell Automation. Reach him at mdgay@rockwell.com or (508) 485-4447.

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