Mention traceability in the food and beverage sector, and the first thought is usually around its use for government and industry compliance. However, food manufacturers have told me that traceability data is just as important as production process reporting when it comes to running the business. Not only does this information support periodic audits and reporting, it is also critical in preventing and troubleshooting quality issues internally and across suppliers. Moreover, traceability is helping F&B companies navigate unpredictable supplies of raw ingredients, shipping delays and other factors that have forced them to reconfigure their supply chains overnight.
The growing role of batch and ingredient traceability data in driving F&B manufacturers’ decisions is directly tied to advances in Internet of Things (IoT) and Industrial IoT (IIoT) sensors that are making this traceability more real-time and contextually intelligent. These sensors are capturing everything from humidity, moisture and current freshness of ingredients to how secure every lot, container and shipment is.
With greater amounts of real-time traceability data, F&B companies can more effectively manage quality, production and resource allocations in 2022 and beyond. So let’s look at how traceability can be applied to best practices, as well as key functions to consider in implementing traceability.
Applying Traceability to Best Practices
Given the maturity of track and trace technologies, the F&B industry is implementing a variety of traceability approaches across their operations and supply chains in 2022. Following are four strategic ways that manufacturers are applying traceability to F&B best practices.
Achieving FDA compliance at scale. Traceability can significantly reduce the costs of complying with regulations and quality standards from the U.S. Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), regions, and industry alliances. By using an enterprise resource planning (ERP) system to automate reports that capture stats from track and trace technology, F&B companies can improve the quality of data while cutting the time to complete audits.
Optimize recipe management. Today, F&B manufacturers are pursuing finite scheduling to optimize recipe management and inventory levels across all plants. At the same time, they are automating sourcing to recipe management and need to ensure that inbound materials and ingredients meet consistent quality standards. Traceability complements inventory management technology by providing real-time data and insights that reduce the risk of accepting stale or below-quality ingredients.
Ensure quality across the supply chain. F&B companies are doing all they can to avert stock-outs and stop allocations before they begin, but they need to ensure that decisions do not impact quality. Traceability enables these manufacturers to gain greater visibility and control over supply chain costs and reduce the risk of product recalls by having accurate product genealogies available in real time. By combining supplier quality assurance (SQA), quality management, and batch and ingredient tracking, food manufacturers can conduct audits and obtain real-time reports to predict and gain greater control over product quality levels.
Improve inventory accuracy and forecasting. F&B manufacturers that take advantage of advanced predictive analytics and statistical modeling skills are finding new ways to anticipate supplier shortages and define alternate plans in real time. Applying these analytics and modeling against months or years of reliable traceability data can lead to improved supply chain predictability while alleviating risk. This is the goal food manufacturers investing in advanced analytics are pursuing today.
Designing an Adaptable Traceability Platform
Every F&B manufacturer’s business model is different, which leads to variances in how they adopt, implement and fine-tune their application of traceability and supporting technologies. However, there are a number of foundational technologies that companies will typically want to have in place when implementing a track-and-trace solution.
Data Collaboration. Traceability systems are designed to enable greater data sharing and automated audit reporting, with many systems offering templates that enable FDA, regulatory, and customer quality audits to be customized for an F&B manufacturer’s unique reporting requirements.
Detailed Search and filtering. Traceability provides numerous ways to search for product data. Common details captured are sales order purchase order (PO), serial number, lot number, packing slip, work order, and label number—including shipment serial number and PO receipt—to the lot level. Many traceability systems also support product groupings and quick data drill-down functionality down to the item, component, raw material, and supplier.
Integration with business software. When track-and-trace is integrated with an F&B company’s ERP, manufacturing execution system (MES), and supply chain management (SCM), the manufacturer gains end-to-end visibility starting from suppliers, through production to customer delivery. This integration is also invaluable in evaluating how effective traceability best practices are performing across an F&B manufacturer’s workflows.
Real-time production and quality monitoring. When real-time production and process quality data from the plant floor is captured in the track-and-trace software, F&B companies gain the timely insights to reduce risk, troubleshoot quality issues before they affect production or deliveries, and ensure compliance.
Regulatory and compliance reporting. Depending on their products, target markets, whether they are certified organic, and other factors, F&B manufacturers need the flexibility to select between custom and standard reporting options for regulations (such as FDA 21 CFR Part 11) recalls, and product history, to name a few.
Supply chain security. In an industry where recipes are highly competitive and intellectual assets need to be protected, item and shipment-based security must be designed into the traceability platform. This allows manufacturers to selectively choose which data elements to share.
Time-sensitive materials and expiration monitoring. Any traceability platform in F&B manufacturing needs to provide a way to quickly and easily view time-sensitive factors, such as ingredient freshness and expiration dates when handling perishables in order to plan production ahead of those dates.
When traceability best practices and the systems supporting them are adaptive enough to flex and meet a manufacturers’ unique business requirements, F&B companies can gain the insights they need to navigate unpredictable markets—reducing waste and supplier risk while ensuring quality and growing profits.
Louis Columbus is currently serving as principal of DELMIAWorks and teaches MBA courses in international business, global competitive strategies, international market research, and capstone courses in strategic planning and market research. You can reach him on Twitter at @LouisColumbus.