The need for consistent, dependable information across the enterprise is the driving force that resulted in Enterprise Resource Planning (ERP) systems. ERP systems take what were formerly disparate, back-office applications and databases and consolidate them into a homogenous, comprehensive application on a common database to create a single source of truth for the business. Because of the nature of business technology, new, disparate, business-critical applications continue to be developed to improve operational efficiency and provide accurate, real-time information for agile decision making. Executive management universally understands that these disparate systems must be integrated with ERP systems to maintain the single source of truth for the business. This applies to all systems that impact operational data, however there is a large chasm on the shop floor in operational, data collection and integration for most process manufacturers.

The Challenge for Process Manufacturing

Tracking Real-Time Raw Material Consumption

Most process manufacturers have a glaring deficiency in tracking real-time consumption of raw materials during production. Raw materials are typically pulled from inventory and manually logged with pen and paper, and manually measured/weighed before being added to each batch without adequate checks and balances to ensure formula compliance. Not only is this process error prone, it makes tracking actual consumption virtually impossible. This becomes more problematic when raw materials become part of a sub-mix that is added as a single ingredient to the final product. This gap has the potential to negatively impact formula accuracy and product consistency. This almost always creates the unavoidable consequence known as unaccountable losses. When there is insufficient, automated, formula control on the shop floor, ERP Systems assume accurate raw material consumption during production. Once production is complete actual raw material inventory must be reconciled to expected raw material inventory based on formula requirements. When actual inventory falls short of expected

levels based on expected consumption, an unaccountable loss has occurred. Management has no visibility into why more inventory was consumed. Possible causes are inaccurate weighing/measuring devices, lack of employee precision or spillage. Without automated controls that are integrated to ERP systems, diagnosing the root cause and taking corrective action becomes guess work.

Lot Traceability

The lack of controls and integration becomes more problematic in manufacturing processes such as food production or other consumables (supplements, pharmaceuticals, etc.)  where regulations require lot number traceability. In most process manufacturing environments, this is typically performed with pen and paper. Just like actual inventory consumption, this is an error prone process that information must then be manually added to either ERP or reporting systems to be in compliance with regulatory standards. Not only does this create an additional opportunity for human error, it requires expensive manpower to complete and is often neglected. In addition, when raw materials become part of a sub-mix, it is virtually impossible to accurately track lot numbers all the way through to the final product. Lack of precision in lot traceability creates additional risk for both the manufacturer and the consumer. If a raw material is tainted and must be recalled, manufacturers usually recall more product than is necessary to mitigate risk.

The Solution: Automated Formula Control and Lot Traceability with Real-time Integration to ERP and Back Office Systems

SG Systems V5 Formula Control can automate the consumption of inventory and lot traceability at the point of production and all the way through shipping of finished goods. Checks and balances are enforced to ensure that formulas and processes are followed with precision. Inventory is depleted in real-time and policies can be enforced such as using inventory on a first expiry, first out basis. Benefits include:

• Real-time visibility to raw-material consumption
• Improved product consistency
• Reduction of raw material usage by 4-6% for a typical process manufacturer
• Reduction in rework
• Process enforcement
• Automated, FDA/FSMA quality lot traceability
• Allergen identification and notification prior to production
• Safety notifications
• Reduction in human error
• Reduction in required manpower to track inventory usage and lot traceability