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

Safety, Traceability in Food Manufacturing

Reduce your risk of becoming a recall statistic

by Jay Deakins

The volume and severity of food recalls in recent years are enough to scare any consumer away from grocery aisles and frighten any food manufacturer into thinking that its product might be next. The industry got a taste of that reality with the massive recall of Salmonella-contaminated products made with peanuts originating from the Peanut Corporation of America (PCA). By March 2009, the recall included more than 3,200 products, with the number rising daily. Then, just as the dust seemed to settle, a separate recall of Salmonella-tainted pistachio products hit the market.

The average recall takes 34 days to enact, according to AMR Research. Bar code-based lot tracking can help food manufacturers more quickly identify the source and all recipients of recalled products.
The average recall takes 34 days to enact, according to AMR Research. Bar code-based lot tracking can help food manufacturers more quickly identify the source and all recipients of recalled products.

Of course, recalls aren’t unique to the nut industry. In the last quarter of 2008, the U.S. Food and Drug Administration’s website listed 33 Class I food recalls and safety alerts—those posing the most serious health risks to consumers—and the U.S. Department of Agriculture reported 18 recalls related to meat and poultry. Some of those highly publicized recalls included cocoa with a possible melamine contamination, tomato sauce with a label that did not declare milk ingredients, and several beef products with possible E. coli contamination.

These cases should set off an internal warning alarm for any food industry executive. Indeed, a 2008 AMR Research survey of 251 food and beverage supply chain decision makers in the U.S. and Europe showed that more than half had participated in a health and safety recall in 2007. And these incidents came at a high cost: More than half of the recalls resulted in write-offs exceeding $10 million.

On top of that, companies face the risk of lingering consumer backlash from recalls. According to separate surveys conducted by Deloitte Consulting LLP and Gallup Inc. in 2008, about 60% of Americans have avoided certain foods or brands because of a recall. By February of this year, sales of peanut butter were down 25% for all brands, whether or not they had been involved with the recall. Contributing to consumer and industry unrest is the fact that many recalls are slow to get started, take a long time to perform, and produce incomplete results: AMR’s respondents said it takes an average of 14 days to discover the need for a recall and 20 more days to enact it.

That kind of recall lag time, and the genesis of some food recalls, can often be associated with the technology used in the manufacture of food products. Manufacturers using multiple software solutions to manage their businesses may be at the greatest risk for inefficient recalls. This article explains the recall dangers related to that technology setting and explores a strategy for solving those problems so that your company isn’t part of the latest recall statistics.

Many recall problems stem from the use of multiple software systems and/or manual processes for managing a food manufacturing business. When you have one program that handles recipes, one for sales, another for accounting, and paper-based systems for inventory and production, you have no way to establish and maintain the process controls essential to product safety and traceability.

House of Cards

Many recall problems stem from the use of multiple software systems and/or manual processes for managing a food manufacturing business. When you have one program that handles recipes, one for sales, another for accounting, and paper-based systems for inventory and production, you have no way to establish and maintain the process controls essential to product safety and traceability.

Take production, for example. A worker—let’s call him Mike—goes into your warehouse and pulls the inventory items listed on the batch ticket. He writes down the lot numbers on the ticket and sends the items to production. The problem is, Mike is only human, and he’s bound to make mistakes now and again. And, with this system, you can’t stop him from pulling lot 510 when he’s supposed to pull lot 501. Unfortunately, if it goes unnoticed, the slipup could lead to a major recall.

Lacking effective ways to generate labels and manage expiration dates also puts you at risk for recalls. With non-integrated systems, Mike has to look up quality control values and batch information in one system before turning to a separate program to create labels, which means he could make transcription errors or omissions. Similarly, Mike has to search several systems to cross-reference customer, product, and inventory data for managing expiration dates. This is particularly true if different customers have different expiration requirements for the same products. If Mike makes even one mistake, you could be stuck with spoiled inventory or products that are returned or even recalled.

If you can’t avoid a recall, like many of the companies who received peanut products from PCA, non-integrated systems can slow and complicate the process. For example, let’s say Mike always pulls all the right lots for production, but sometimes he writes down the wrong lot numbers. When your supplier calls and says you have to recall certain lots, your records are muddled by Mike’s mistakes. And if Mike lets your inventory go negative by shipping products before he enters the materials into your software, he’s shipping from lots that do not even exist. He’d have to pull batch tickets from months around the shipment date to find all the affected products, wasting time that’s needed to communicate the recall to customers and end users.

Mike can avoid these and other mistakes that cause or protract product recalls if all your company’s business processes, including lot tracking, quality control, labeling, recipe management, purchasing, sales, production, and accounting, are integrated in one food-specific system.

An integrated system should let you view a report of all aging inventory and establish alerts for lots that are nearing expiration.
An integrated system should let you view a report of all aging inventory and establish alerts for lots that are nearing expiration.

Point A to B to C

One of the most important ingredients for achieving product safety and traceability is a strict lot control and tracking process. Incorporated into an integrated food manufacturing software system, this can help you prevent the common errors that cause product recalls, and, when a recall is unavoidable, help you trace items with surprising speed. For one food manufacturer, La Tortilla Factory, an integrated enterprise resource planning system with built-in lot tracking reduced the amount of time the company spent tracing raw materials by half.

“In a matter of hours, we were able to trace back to the source of ingredients,” said Stan Mead, president of La Tortilla Factory.

Bar code-based technology, used as part of a fully integrated software system, is what allows food manufacturers like La Tortilla Factory to achieve that level of lot control and tracking efficiency. This kind of system should let Mike generate bar code labels as soon as he receives purchase orders. Then, using a handheld scanner, he can enter lot data into the system and trace items as they move through every part of your operation, including inventory, production, and shipment.

With these advantages, Mike couldn’t make transcription or data entry errors that might complicate lot tracking during a recall. Bar-coded pick lists and batch tickets should also help him prevent accidental substitutions that could ruin or taint a batch. The scanners would alert him if he scanned the bar code on lot 510 when he was supposed to pull lot 501.

The software should also allow you to establish process controls that would prevent Mike from allowing negative inventory: By preventing him from filling an order that includes items not listed in inventory, he would be forced to follow the process of receiving, using, and shipping materials to ensure that he creates traceable, electronic lot histories.

So, if you still needed to trace or recall a lot, you could view up-to-date lot histories at any moment. You could pull a lot tracking report that could show you everywhere a lot is or has been, stamped by date, time, and signature. This report would include everything, from the original purchase order to jobs that included the lot, the products made from it, the shipments that contained it, and any of that item still on hand.

The best part of all of this is that pulling that report should take only a few clicks in an integrated system, as opposed to the several days or weeks of research you’d invest with disjoined systems and manual processes.

Fortunately, you don’t have to be a recall statistic. Implementing business software that’s designed for the food industry and integrates quality control, lot tracking, and labeling requirements with the rest of your business processes in a single system can help you respond to tainted batches with speed and effectiveness—or avoid recalls altogether.

Best if Used By

To ensure product safety, an effective expiration date management system is also essential. The more products, ingredients, and customers you have, the more difficult it is for Mike to keep track of shelf lives, particularly if you have customers with different requirements for the same products.

With an integrated system that uses bar codes, you could automate your lot selection process based on picking rules, such as LIFO (last in, first out), FIFO (first in, first out), or FEFO (first expire, first out). You could configure the system to your needs so that it would prompt Mike to pull the appropriate lots for each production job based on item shelf life and any customer-specific requirements you’ve entered.

Configuring refers to adapting the system to your business without altering the software’s basic programming code. Configurability is preferable to customization when it comes to expiration date management and all other business processes, because it requires less time, labor, and cost. That’s true both for initial system implementation and testing, and in managing updates throughout the software’s life cycle as operating systems and business requirements evolve.

Configuration options would let you establish alerts for lots that are nearing expiration so that the appropriate action could be taken. Also, if Mike tries to pull an expired lot from inventory, the bar code scanners should alert him so that he avoids ruining a batch.

Product Contains Milk

The last key element to improving product safety and minimizing your recall risk is label generation. Incorrect labeling—tomato sauce that fails to mention the inclusion of milk, for example—is a frequent source of recalls for otherwise high-quality products. According to data analyses by U.K.-based industry consultancy Reading Scientific Services Limited, about half of the food recalls in the U.S. and U.K. in 2008 resulted from packaging that failed to mention the presence of allergens.

Labeling mistakes are minimized in a fully integrated system. First, the software should allow you to configure labels to your specifications. By arranging data fields, logos, and other characters to your design requirements, you establish label templates without software customization. Then, because the system already stores all your recipe, lot, expiration date, batch, and quality control data, it can automatically populate the correct label template with the appropriate data. Mike simply has to click the “print labels” button.

And, because all label data is stored in one spot, making an adjustment to a calculation or an ingredient in your formula automatically drives through to your label. Your customers clearly see that a new batch of sauce contains an allergen, for example, whereas the original version of the formula did not.

The last thing you want is your company’s name plastered all over the news because your product caused consumer illnesses. It hurts your customers, it hurts your brand, and that hurts your bottom line.

Fortunately, you don’t have to be a recall statistic. Implementing business software that’s designed for the food industry and integrates quality control, lot tracking, and labeling requirements with the rest of your business processes in a single system can help you respond to tainted batches with speed and effectiveness—or avoid recalls altogether.

Deakins is president of Deacom Inc., the producer of an integrated accounting and enterprise resource planning software system for food and beverage manufacturers. Reach him at info@deacom.net or visit www.deacom.net.

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