Food-Based manufacturers have very specific requirements in an ERP.
Since they deal with consumable products their operations are subject to more regulation and reporting requirements
than most other manufacturing sectors. The food SIC (20) has many vertical industries, this whitepaper
is intended to give the general requirements of all of the verticals within SIC 20. Future whitepapers
will include more information on the specific requirements of the sub-vertical markets.
The effectiveness of a system is measured by its
ability to:
Easily and efficiently capture all necessary data in one central location.
Present data in a format conducive to efficient flow of operations.
Report on all aspects and combinations of data in the system.
Management of a food-based inventory: Inventory management of a food manufacturer typically has
the following characteristics:
Food manufacturers typically manage inventory that is perishable, sometimes expiration
dates are as short as one week. Managing expiration dates is of vital importance to food manufacturers.
Inventory can have varying attributes from lot to lot. For
example a lot of oranges received in the summer will have different characteristics (brix, pH, etc.) than oranges received
in the winter. Therefore, lot management, planning and reporting is critical for effective inventory management
of food manufacturers.
Many food manufacturers produce “intermediate items.”
Intermediate items are materials that are produced in manufacturing and used as an ingredient in another formula, i.e.
a company makes chicken broth (an intermediate) which is then used an as an ingredient in the formula for vegetable soup.
One formula can produce multiple finished goods (or SKUs), i.e. a formula “Vegetable
Soup” can produce a 10 oz can, 14 oz can and 2 pound box. A finished good is characterized with a
“split bill of materials” which includes 1) a formula and fill level, and 2) packaging (or bill or materials).
Formula management: Formulas are the “central nervous system” of food manufacturers.
Characteristics of the formula management function are:
Chemists are typically tasked with attaining key attributes of the product; for
example, fat content, calories, sodium, etc. as well as cost. A formula module must have dynamic, user-defined
calculations based on ingredient attributes.
A formula defines the relationship of ingredients as a percent (vs. defining the
quantity to make 1 piece as in discrete manufacturing). Formulas can be represented by weight, volume or
a percentage, i.e. 30% sugar, 30%, flour, 40% water.
Typically chemists’ manage many hundreds or even thousands of formulas;
requiring a central database with management tools such as item substitution and searches by item attribute.
Formulas are food manufacturers’ most valuable assets, requiring the highest
level of security from theft and unauthorized alteration.
Production planning and control for food
manufacturing: Production in a food-based
environment is the place where art and science meet. Inventory attributes of raw material lots can vary
widely and production managers can substitute items within a batch; yet finished goods produced must be consistent.
MAS 500 was designed for food manufacturing and provides tools for calculations, inventory/lot data, expiration dates,
etc. (the “science” portion) and is flexible enough to allow the production manager to make and record on-the-fly
decisions about a batch (the “art” portion). These tools include:
Role-based dashboards to manage operations in real-time with drill-down/drill-around
capabilities
Production batch yields and cost analysis
Batch calculations based on raw material lot attributes
Integrated MRP/replenishment module.
Quality Control and HACCP: In a food manufacturing environment, quality control testing of raw materials and finished goods
is absolutely necessary. Yet often time’s quality control and HACCP control information is maintained
as an “island” of information in Excel, Word or Access leaving the QC personnel with few tools to help them plan
or execute their job function. The integrated design of MAS 500 allows QC managers to design tests and
define rules; then allows the system to communicate with purchasing and production modules on the necessary tasks via a role-based
dashboard which queries the database in real-time.
Security and Reporting: Food manufacturers have many governmental regulations
(21 CFR Part 11, Bioterrorism Act, and Sarbanes-Oxley) and good manufacturing procedures (cGMP) with which to comply.
In addition, there is a high demand for operational reporting requirements. Since most food manufacturers
are not on integrated process manufacturing systems, they usually find themselves reporting from Excel spreadsheets from their
various departments. MAS 500 provides graphical, customizable, multi-dimensional reporting from a fully
integrated system.
Following are typical reporting
requirements from each department head:
Executive:
Information that effects cash flow:
o Margin on products / product lines / salespeople / territories
o
Most profitable customer / products
o
KPI’s – order turn around, orders
returned, returned raw materials, etc.
Production Manager:
Information that helps them manage and analyze production:
o
Batch yield and cost by: formula / product /
product line
o Production planning information
o Critical materials (material shortages) with expiring lots
Quality Control:
Current and historical information on tests and trends:
o
Historical trends of tests
o
Documentation of QC and HACCP tests
