how traceability creates profitability

How Traceability Creates Profitability

with Judith Kirkness

Judith Kirkness Small Business Owner Over 20 years experience

working with food manufacturers Use software and technology to

solve problems, gain efficiencies Lifelong learner Author

Traceability Perception

It’s just a Cost

Something QA/QC takes care of

Requirement of GFSI certification

Done to satisfy the government inspector

Traceability Opportunity

Given that you are tracking the information anyway, how can you get it working for you for a competitive advantage?

The Government Goals (as I see them)

• Increase Jobs (stimulate our economy)

• Increase skill set of Ontario workers• Ensure safe foods (for us and to preserve

Canadian reputation)

• Encourage Entrepreneurship (small business are the current job creators)

• Improve labour productivity• Help you sell more

Growing Forward 2 – funding for traceability technology• ERP• Traceability software, inventory/warehouse management• Customization of existing software to get programs connected• Network server installation• Hardware: label printers, barcode/RFID scanners for

traceability use• Mobile devices for traceability collection• Cables and wiring to get hardware connected• Enclosures to protect traceability equipment• Integration Consulting and services for the above• Training your staff and management

Will implementing technology produce the desired outcomes?

• ERP• Traceability software,

inventory/warehouse management• Customization of existing software to

software pieces talking• Network server installation• Hardware: label printers, barcode/RFID

scanners for traceability use• Mobile devices for traceability collection• Cables and wiring to get hardware

connected• Enclosures to protect traceability

equipment• Integration Consulting and services for the

above• Training your staff and management

• Increase Jobs (stimulate economy)

• Increase skill set of Ontario workers

• Ensure safe foods (for us and to preserve Canadian reputation)

• Encourage Entrepreneurship• Improve labour productivity• Help you sell more

The Operational Traceability Flow

When Traceability is tested…

Canadian recalls for year ending March 2012

142 allergen related

24 due to chemical residue

31 due to extraneous matter

104 due to microbiological or other food safety concern

301 Recalls total

Recall reporting is the most important feature for protecting your brand – time is of the essence

Being able to pull product quickly is the usually the least used feature of automated traceability

We hope you do more mock recalls than real ones!

So traceability collection needs to offer more to be of value…

It can!

Bringing information together for analysis can improve your business in meaningful ways!

The actual lot number information won’t help, it is the information the collection process can offer that can be so valuable

Let me share 5 ways…

Food fraud, allergen and product claim recall prevention

Item attribute and item substitution tracking/alerting, supplier approvals

Food Safety• QA/QC Information storage• Use information for release of product for

sale• Produce the specific Certificates of

Analysis (CofA’s) for each shipment• Linking batches to their test results should

there be a problem with a finished good

Knowing your true costsHow are you calculating your costs now?

In your head?Using spreadsheets?With pen and paper?

ERP Costing• What goes into your raw material costs?

(landing factors)

• Do you assemble or disassemble products, or both?

• Costing by batch is a RESULT of entering quantities of inputs and outputs

• Timely, accurate and also depletes raw materials or WIP as it creates finished goods

Yield Calculations

• Regular, timely comparison of inputs vs. outputs

• How did yield knowledge help Halenda’s?

Profitability• If the system knows your costs and

knows what you sold each item for to each customer, it can compute PROFIT across your items and your customers

• Computers can track and deduct marketing program costs to give you true profit figures?

Theft plus dated and damaged product

• Inventory control that includes traceability and expiry information combined with reporting can alert you to approaching dated product

• Damaged product can be adjusted out or scanned to a damage location

• FIFO suggestion can help determine missing units from a lot

Technology to bring information together• ERP or integrated business management systems• Customer portals and dashboards• Barcode scanning and handheld warehouse

management• Plant floor equipment (scales, PLC’s) feeding your

ERP system• Touch screen plant floor weigh/label stations• Mobile worker tablets, scanners, and printers

Remove the Silos of Information

Scanning – How ready are you?

• Supplier labels?• Your labels• Your facility – slot or location labels• Label printers for GS1-128

Scanning Technology

1. Choose your software first

2. Don’t skimp on infrastructure (wireless network)

3. Get the right handheld or scanning devices for your environment

Mobile Workers

• Tablets• Cellular handhelds• Mobile printing

Your Game PlanWe all compete against worldwide players. To win,

you need a goal, a plan, people given the right training, time to develop and leadership to WIN.

Use Traceability Information as your Edge