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Food Manufacturers Use Technology To Manage Supply Chains

KERIKERI, NZ - JAN 07: Chocolate factory worker prepares dipped Chocolate balls on Jan 07 2014.In 2006 more than 6.5 million tons of chocolate was traded worldwide.

With lots of moving parts and growing complexities, food manufacturers need to keep close tabs on food safety and managing product and data throughout the supply chain.

Sometimes keeping it simple, stupid, is way easier, and much more fun to say, than actually doing it. Take the phrase “farm to fork.” The sentiment behind the statement is so intuitive: Let’s get the food from the farmer to the consumer’s dinner table as efficiently and directly as possible. That is, after all, the best way to ensure the food is good and good for the consumer. Actually doing this, however, is not at all easy or simple.

Processors have a lot of moving parts to keep track of, starting with the intake of raw materials and ingredients to making sure the right amount of product gets to the right place. Because many of the products have a limited shelf life, not to mention being under increasing food safety and quality scrutiny, getting the logistics right is crucial. To make matters more confusing, many variables, such as consumer tastes and market fluctuations, can rapidly change and are completely out of the processor’s control.

The optimal flow of food and beverage goods to consumers is vital for brand protection. To ensure the efficiency and performance of food supply chains, the entire end-to-end process, from sourcing to manufacturing to delivery, must be strategically planned and systematically managed. Fortunately, new technology is helping members of the food processing industry improve the management and performance of their supply chains.

Resilient supply chains

To be sure, food and beverage processors are facing a host of challenges.

“The complex processes that characterize the food and beverage industry bring an extensive list of challenges, including low profit margins, perishable products, stringent government regulations and changing consumer tastes,” says Brian Shannon, chief strategy officer for Dolphin Enterprise Solutions Corporation, a provider of SAP (Systems Applications Products) solutions.

Of these challenges, Reinhard Steup, senior manager of supply chain management for HAVI, says consumer demand is the most rapidly changing variable within supply chains.

“Consumers have become more accustomed to instantaneous response and reaction, so companies must maintain more efficient communication, productivity and supply chain optimization to stay relevant and effective with consumers,” he says.

Some of the other variables that can cause instability are oil and gas prices, as well as carrier capacity and availability. If you have a global supply chain, it might produce benefits, such as access to seasonal foods and exotic ingredients. However, the international scope of operations could expose a company to many variables in the suppliers’ locale, such as geopolitical issues and weather-related transportation disruptions, including natural disasters.

“More options can bring more opportunities for something to go wrong, so it is crucial that organizations recognize this and have contingency plans,” says Steup.

It would be unreasonable to expect processors to be prepared for every possible risk or unexpected change. However, the best way to guard against these things causing major upheavals in business productivity is to have a resilient supply chain. In its 2013 white paper “Supply chain resilience—A risk intelligent approach to managing global supply chains,” Deloitte defined supply chain resilience as being characterized by four things:

  • Flexibility: Having the ability to adapt quickly to a problem while not increasing operational costs.
  • Visibility: Having the ability to track and monitor supply chain activities in real time.
  • Collaboration: Working effectively with supply chain partners to develop a relationship that will help both companies achieve productivity goals.
  • Control: Putting robust policies and procedures in place to monitor and control all operational processes.

So, how does a company start building this resilience? A good place to start is looking at increasing automation.

“The food and beverage supply chain involves many steps and processes, most of which continually repeat as operations progress,” says Mike Lorbiecki, vice president of sales for IFS North America. “These repetitive processes present the perfect opportunity for automation.”

He suggests processors look at employing technologies that limit manual labor, such as barcode scanners, radio frequency identification (RFID) and sensors.

“Seizing automation opportunities can provide instant and long-term benefits, as the more steps and procedures you can automate within your supply chain, the less time employees will have to spend ensuring processes are completed as planned, limiting human error,” Lorbiecki says.

Traceability and audit readiness

Knowing exactly where product is located at any given time is useful information for not only optimizing the supply chain, but also complying with increasing food safety regulations. The Food Safety Modernization Act (FSMA) consistently emphasizes putting preventative measures in place at food processing operations to stop a food safety event before it happens.

“With the advent of food safety regulations like FSMA, having the ability to look at where products have been in the supply chain is a requirement as opposed to ‘nice to have.’ So, having tools that give organizations that visibility is vitally important,” Steup says.

To help contribute to that real-time understanding of where things are and what is happening to them in the supply chain, new technologies equipped with sensors can be used to track and maintain temperature, moisture content, light and the freshness of foods.

“Advancements in IoT and big data have helped revolutionize safety and compliance efforts in the industry,” says Lorbiecki. “Organizations can now see exactly where a product is, where it has come from and where it’s going, thanks to the affordable and automated labeling and identification IoT brings.”

With the existence of big data analytics, data can be easily stored and analyzed, which can help sift through the undesired information and identify where problems might occur. This is a proactive approach to food safety in the supply chain and aims to stop potential food recalls or contamination issues, which is in step with FSMA’s preventative controls.

“Traceability systems are now streamlining the management of supply chains and helping companies adhere to these strict industry regulations,” Lorbiecki says.

Previous traceability efforts tracked only a few ingredients back to a single point in the manufacturing process and didn’t provide full visibility. However, today’s ERP solutions have track and report functions to ensure compliance with all state, federal and even global food safety guidelines. This is needed in the event of an audit to deliver precise data and detailed historical records.

“When facing an audit or attempting to gain a certification, the amount of information you can provide will directly impact the outcome of the process,” Lorbiecki says. “Keep detailed records of materials processes, maintenance and cleaning efforts since the more you track, the better prepared your organization is.”

With a potentially huge amount of data being stored, having a data management strategy could be just as important as having the information. Dolphin’s Shannon says it’s a good idea to have a data archiving strategy in place to reduce data volume and complexity in order for management to access information more efficiently.

“Data that has met its prescribed residency period must be promptly archived and stored, and if done consistently, the system will perform more efficiently, with fast back up, upgrade and recovery times,” he says.

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Source: Food Engineering Magazine

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