ERP: How Enterprise Software Can Improve Traceability

(Editor’s Note: This is an online-only article attributed to the June/July 2018 issue.)

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With product lifecycles shortening and the number of SKUs increasing, how do food and beverage manufacturers keep up with traceability requirements? From more varied forms of packaging, regional mass customization, seasonal products, and other variations, this is more of a challenge now than 10 or even five years ago. Each new SKU involves new vendors, new processes, different equipment, and other risk factors that must be accounted for and mitigated.

The CDC estimates that each year, roughly one in six Americans—or 48 million people—get sick due to foodborne illnesses, with another 128,000 hospitalized. With human health at stake, it’s little wonder the industry faces multiple regulations. Just within the U.S. market, key regulations include Good Manufacturing Practices (GMPs), the Food Safety Modernization Act (FSMA), and Hazard Analysis and Critical Control Points (HACCP).

Compliance Not as Easy as ABC

One element these regulations have in common is the idea that food safety is driven by the establishment of well-documented procedures, including who touched which material in each step of the manufacturing process. This regulatory emphasis on procedures creates a natural fit with enterprise software because these are the systems that carry out most of the critical enterprise procedures—the management systems that food and beverage companies use to manage procurement, production, product information, quality assurance, maintenance, distribution, and other functions.

1. Finding the right fit: ERP that integrates the chain of custody. ERP systems are broad in functional scope, but when it comes to support for regulatory compliance in food and beverage, core ERP often isn’t broad enough. This is because most ERP systems lack integrated applications for quality management, quality assurance, and enterprise asset management (EAM), which are often delivered as whitelabeled software or through third-party integrations.

The best way to envision the software scope needed for food and beverage regulatory compliance is to think about the “chain of custody” in producing and bringing a product to market. The manufacturer needs to develop and maintain the product and related labeling information, procure the raw materials, test materials for quality, manufacture the product, test it for quality again, and distribute the product.

While some of these processes can be handled by an ERP system that supports recipe management and batch/process manufacturing, there remains a need for solutions such as quality management and EAM to ensure quality procedures are followed, and that production equipment that touches the product is cleaned and maintained as required.

By contrast, a “pure-play” ERP suite tailored for the food and beverage industry includes all of these things and more as part of a complete application suite. Pure-play ERP eliminates cost and organization risk of systems integration projects to extend ERP with the required functionality. It also avoids the problems that result when an ERP vendor whitelabels software from another vendor and sells it as part of their application. What happens when you upgrade? Will that whitelabeled software be compatible? Will it deliver on your needs as they change over time, or will that require custom coding? For food and beverage manufacturers, a pure-play suite should span quality management, EAM, project management, document management, and business process modeling—in addition to core manufacturing resource planning and finance. It should include roles-based user interface and dashboard features that make it easy to surface necessary information by employee role.

2. Fragmentation the enemy of traceability—get integrated. While many companies have implemented ERP systems, these solutions in some cases are fragmented. Many enterprises, for example, will use one ERP system for enterprise financials and order management, but use a different system for production management and another system for maintenance. This increases the integration overhead in forging a comprehensive solution while also making it much harder to bring together the information and metrics that make up a comprehensive traceability system.