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In Today’s Food and Beverage Industry, Lot Control Is a Horse of a Different Color
In the wake of the recent horsemeat scandal in Europe, the Ferrari Group’s Supply Chain Matters blog finds food and beverage manufacturers intensifying their focus on the screening and traceability of food products. Recalling what Bob Ferrari calls “not exactly a savory development,” the post notes that Nestle CEO Paul Bulcke indicates that the scandal will affect the entire food industry—even companies such as Nestle that did not have product involved—by refocusing executive eyes on traceability. “We check our suppliers very carefully, and, of course, when something like this happens we intensify our procedures,” says Bulcke in a Financial Times interview.
 
At one level, such diligence underscores how complex and dispersed the food and beverage supply chain has become, and how challenging it is to track and trace every ingredient from every source. At another, it highlights the increasing pressures on food and beverage manufacturers from government oversight.
 
In the United States, the passage of the Food Safety Modernization Act (FSMA) in January 2011 has given more muscle to an already powerful Food and Drug Administration (FDA). The law gives the FDA the authority to order recalls of contaminated food (amongst other powers not here disclosed). As a major overhaul of food safety laws and regulations, the Act’s stated purpose is to provide a safer food supply and a more stable food industry. But it will also vastly broaden the power of the FDA to regulate any aspect of food production.
 
As a result, the traditional, yet sometimes amorphous approach towards lot control and product traceability has been banished to the dustbin of history. In today’s market, food and beverage processors must have the capability to rapidly identify and track every ingredient for every one of their products, from receipt through processing, packaging, and shipping, to the exact customer location.

According to an article in Food Quality, “One of the most important ingredients for achieving product safety and traceability is a strict lot control and tracking process.” As part of an integrated system, lot control functionality can be invaluable in preventing the common errors that cause product recalls; in the event of a recall, it can help trace items quickly and accurately.
 
According to Epicor customer Michael Montgomery, controller at Ohio-based New Bloomer Candy Company, Epicor Tropos – ERP process manufacturing software – allows them to establish a powerful lot control and traceability system, particularly with their suppliers. “Before Epicor Tropos, we didn’t have the ability to trace forward or backwards if we had a product recall,” says Montgomery. Epicor Tropos delivers full visibility of ingredients from origin to the final customer, which keeps New Bloomer Candy Company ahead of regulatory requirements and keeps them covered should an audit or potentially damaging product recall be required.
 
While the risks of not having comprehensive lot control and traceability are motivation enough (e.g., the FDA can shut a company down), business rewards also drive the adoption of these systems. These include brand protection, desirability as a supply network participant, and enhanced visibility and control of the production process.
 
According to Food Quality, "Fully integrated ERP software can manage all the business processes of a food manufacturer, including formulation, regulatory reporting, purchasing, production, inventory, sales, and accounting, in one system. In the event that you still need to trace or recall a lot, you can view up-to-date lot histories at any moment. You can pull a lot tracking report that shows you everywhere a lot is or has been, stamped by date, time, and signature. This report should include everything from the original purchase order to jobs that include the lot, products made from it, shipments that contain it, and any amount of that item still on hand."
 
Posted by Tom Muth, Senior Manager, Product Marketing

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