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Food and beverage companies face intense competition and extremely tight margins in the manufacture and distribution of their products. In addition, unique inventory control challenges such as managing stock rotation according to expiration dates as well as monitoring temperature levels can strain already tight budgets.
To consistently improve operating efficiencies and meet regulatory and best practice guidelines, companies must maintain cost-controlled operations that achieve product traceability throughout their end-to-end supply chain. This requires tightly integrated supply chain execution systems that share accurate, real-time data from source to consumption. 3M Supply Chain Solutions has identified three critical components to food and beverage product traceability in the warehouse.
Warehousing and distribution aspects of the supply chain represent different things to different businesses. Some facilities receive product directly from their own manufacturing operations, while others receive product from outside manufacturing plants. Regardless of the model your business uses, product visibility and history must continue into this phase of your operations. A warehouse management system (WMS) can date-stamp and assign unique lot numbers to inbound and outbound products or continue to track existing numbers automatically (using RFID) as they enter and exit the facility. Date stamps and born-on manufacturing indicators are product attributes maintained in the system, enabling operators to draw on pallets in the correct order. This is important not only for traceability records, but also to have visibility into expiration dates that support FIFO and LIFO based picking and rotation. Other inventory management functions use this tracking information. During the put-away phase, stock location and rotation should be based on established, system-directed rules that avoid mixing products in locations that could affect integrity. For example, a product that has been rinsed should not be put away in a manner that would allow this excess water to drip onto another product or packaging material.
Traceability must also be preserved during value-added service management such as packaging and product bundling. In these situations, individual products are pulled from master lots to become part of a new group. For example, this could mean bundling a fruit, beverage and sandwich into a lunch kit. The master lot number for each individual item should be recorded to maintain traceability as the new grouping moves through to the consumer. Product bundling is a common practice for retailers. One retailer might want a three-pack simply because its competitor sells a two-pack. These requests are most efficiently executed in distribution to support a postponement strategy. Another common occurrence is that canned products will be stored as bright stock, meaning they are just cans without labels. Then as demand is established, the cans are run through a labelling operation to give them a name brand or store brand label, depending on the order.
Rigorous quality and inspection
Simply put, quality assurance and accurate inventory control help eliminate recalls. Warehouse management systems direct and optimise work activity quickly to put products in the right storage locations. Ensuring that goods are stocked in freezer and refrigerated zones means their quality and freshness will be preserved. Sensor and RFID technology can be helpful to regulate environmental storage in such areas and send notifications if temperatures move out of acceptable ranges. Likewise, picking products based on FIFO and LIFO rules help manage expiration dates and ensure stock is rotated properly. The WMS will track this information and direct workers to perform put-away and picking tasks accordingly, and all activities are recorded in the system. Not only is traceability important to maintaining quality in the warehouse and distribution phase, but security is also a factor. The WMS can help you leverage technology that provides tampering control, making it difficult for people to carry out dangerous activities.
Fast, reliable recall management
From time to time, we all hear the well-publicised news about product recalls, and how well or poorly the companies involved handled these sensitive events. If your business is ever faced with this situation, your ability to perform fast, thorough recalls could save both your brand name and your customers from serious consequences.
A recall is the ultimate test of your systems ability to transfer and maintain accurate data throughout supply chain operations. You will need to notify customers within hours of the recall that some of their shipments may be affected and should be either destroyed or returned. Rapid retrieval of traceability records and customer notification are key to helping you meet guidelines and prevent any harm. Your ability to narrow down the scope of the recall will be critical to identify exactly which products are at issue and which are not affected. You dont want to incur the cost of recalling all shipments if you can pinpoint only a few products that could be problematic. There are many stories in industry publications of success in leveraging the WMS to dramatically reduce traceability times during mock recalls.
The WMS will need to identify lots that left the warehouse and arrived at their destination. The final ship-to address showing what was received and by whom should be readily available if you have a WMS and transport management system in direct communication. RFID can be useful to track shipments in both mock and real recalls to ensure fast action.
Building in traceability
To ensure the ongoing safety and compliance of the food and beverage supply chain, traceability must be built into every step of the process. Traceability systems help companies minimise the production and distribution of unsafe or poor quality products, which in turn minimises the potential for negative publicity, liability and recalls. The better and more precise the tracing system, the faster you can identify and resolve food safety or quality problems. This is best accomplished through a seamless approach to supply chain execution systems. Systems that integrate directly will ultimately promote the availability of accurate, real-time information to all nodes of the supply chain, from raw materials and component suppliers, to manufacturers, distributors, and transportation providers.
Synchronicity is key to food surety and consumer safety. Regulations have been created for a reason, and theyre here to stay. Early and thorough compliance can help you turn rigorous safety processes into long-term competitive advantage as customers place their confidence, trust and dollars into your products.
Hugh Murphy (above left) is business manager, UK & Ireland, 3M Supply Chain Solutions; and, Marcus Bennett (above right) is marketing executive for 3M Supply Chain Solutions. The company provides best-of-breed supply chain execution solutions that streamline manufacturing and distribution from the point of source through consumption.