Get up to speed on traceability

There is one question that everyone should be asking themselves, says Ian Rutherford, head of the SAP division at system integrator CSI. "If you come into work in the morning and find you've had a letter from the Food Standards Agency to say that you've got a problem with one of your products out in the market, would you comfortably walk over to your laptop and push a button or would you go into a blind panic?"

Since the European General Food Law came into force in 2005, the onus has been on food and beverage manufacturers to be able to trace every batch they produce, both forward to the retail shelves and back along the ingredients supply chain. Automated solutions are available to give this level of traceability, but vendors say that many companies still have a long way to go to achieve the batch- or pallet-level traceability needed for compliance.

"There's some awareness but not as much as there needs to be," says Steve Mumby, director of software supplier, Innovation Software. "99% of people would fall into a blind panic in a product recall situation, but with a computerised system you can trace forward or back at the press of a button. From a final batch you can track back to the raw materials. And if a particular batch of raw material has caused the problem you can then trace forward to find all the affected products."

Unfortunately, many companies fall considerably short of this theoretical ideal. "Some companies have very little automated tracking," says Stuart Foreman, director of system integrator, Khi-Ro. "In the past they may have had an ERP [enterprise resource planning] system at the financial level, but not at the shop floor level. A lot of information will have been recorded manually using pen and paper for back-office entry into the ERP system. More advanced companies may have automated shop-floor recording already but have no communications with the ERP system."

According to Rutherford, the necessary tracking information is almost certainly there at some level in every company, but it's often hidden away and difficult to dig out in a crisis.

"When we launched our SAP solution in the UK in 2006, we contacted 500 food companies to ask if their systems were compliant with EC/178/2002 [the EU Directive behind the General Food Law]. We spoke to IT directors and financial directors and found that many companies didn't know what the directive entailed, and that was a year after it came into force. The chances are that someone, somewhere - a quality manager or production manager - is noting the necessary information on a spreadsheet, but if the company had to carry out a product recall, they couldn't do it quickly."

Of course, one solution to a product recall crisis would be simply to recall everything. But, as Rutherford points out, that could cost a company millions of pounds. Other costs of not having the right systems in place might also include higher insurance premiums, or losing business because retailers increasingly want to deal with suppliers that are up to speed. "These days, traceability is not just a 'nice to have' feature," he says. "It's a business need."

It'll be a steep learning curve for many food companies, according to Matthew Stephenson, head of IT practice for Deloitte's consulting arm. "There are lots of SMEs [small companies] in the food industry and many of them are not quite mature in terms of IT."

So what's the best approach? There are two basic options. Those companies starting more or less from scratch have the option of investing in an all-singing, all-dancing ERP system that includes factory-floor, batch-level traceability alongside its business management functions. But Rutherford stresses that companies choosing this option must be absolutely clear about the features they need to make sure that they don't end up with a system that supports only limited traceability.

"The thing about ERP systems is that some ERPs can't do batch traceability very well," he says. "They can handle stock control, but not batch traceability or shelf-life."

Different approaches

Most companies will have substantial IT systems of one kind or another in place already. These might include ERP, manufacturing execution systems (MES), supervisory control and data acquisition systems or product specification databases, for example.

Companies in this position may choose to rethink all their systems, or they may opt to tack on a specialised system to handle traceability and quality assurance.

"Big systems don't do these things in the same sort of depth as specialised systems," says Mumby. "Traceability is just one aspect - though an important one - of quality. A specialised quality management system offers significant spin-off benefits such as reducing scrap product and giveaway and promoting right first time production." Innovation Software's Tracesoft package is used by both Weetabix and Greencore Groceries (see box).

Both approaches have pros and cons depending very much on the individual business, according to Stephenson. "For SMEs there's an understandable drive to reduce the number of [IT] vendors you're dealing with, but that needs to be balanced with the fact that a vendor might be good at ERP but not MES, for example. And if you do need more than one approach, it's important to have an overarching strategy for IT throughout the company."

The demand for traceability extends beyond the factory gates both up and down the supply chain, so it's crucial that information is transferred successfully between companies.

"One of the things we've seen over the last couple of years is increasing automation and traceability in the receiving process," says Khi-Ro's Foreman. "This often takes the form of supplier labelling. In the past, pallets would have arrived with a purchase order, but not a bar code on every pallet."

An end-to-end view

"Once you're fully automated within your own enterprise you need an end-to-end view across the supply chain, so standards are a big issue," adds Stephenson. "If everyone has to use the same system vendor to make the automated supply chain work it's doomed to failure, so the key is having data standards that operate across the supply chain."

For example, the GS1 standards for bar codes and radio-frequency identification tags involve manufacturers buying blocks of numbers that enable them to give each batch a unique label. "If the supply chain involves co-packers and smaller companies, a large manufacturer will give each partner some of its numbers, and sometimes even the scanners or other kit they need," says Foreman. "The requirement passes up and down the supply chain."

"It's actually about more than traceability," says Stephenson. "In future the value chain will need to deliver much more flexibility for consumers and companies need a collaborative data platform for that to work. It's coming but it's not there yet." FM

Food Manufacture is organising a conference on Product Recall​ on March 6 in Warwick.​

Key contacts​

• CSI 01623 726300
• Deloitte 0117 985 2807
• Innovation Software 01472 500345
• Khi-Ro 01733 405820
• Millitec Food Systems 01664 823032

Delivering more than compliance

According to the vendors, manufacturers should not feel that improved IT is simply an unavoidable and expensive consequence of traceability regulations. They insist that high quality information can deliver substantial benefits, although some of them may be tricky to measure. "A system might enable me to execute a product recall more effectively, but how can you put a value on that?" says Matthew Stephenson, head of IT practice for Deloitte's consulting arm.

But for Greencore Grocery's plant in Selby, North Yorkshire, some of the benefits of installing a Tracesoft quality management system from Innovation Software have proved easy to quantify. The system uses hand-held computers to capture data from around the plant and combines aspects of quality management, traceability and lean manufacturing.

The 23-acre Selby site manufactures a range of products, including cooking and table sauces, pickles, salad dressings and soft drinks. Supplying products to all the major retailers means having a huge range of product specifications. Paper-based quality checks generated hundreds of different check sheets and a huge amount of data, most of which was simply filed away in case of a customer audit.

The benefits of the new system include an overall reduction in scrapped product from 5% in 2005 to 0.6% in 2007. And in one section of the plant, the drop in off-spec batches was even more dramatic, falling from 8% to 2% in just six months.

"Easier record keeping, faster, more accurate information and removal of the 'paper chase' from the daily work load have contributed to improved productivity and a significant reduction in non-conformance levels," says Adrian Regan, Selby's technical director. "