Don’t Get Stalled by
Compliance Complexity
Software for the
Food and Beverage Industry
White Paper
Table of Contents
SYSPRO for the Food and Beverage Industry 2
The Industry 4
Food Safety 4
Regulatory Compliance 5
Brand Protection 5
Automated Traceability 6
Barcoding 7
How SYSPRO can help 8
About SYSPRO 10
Page 2 | White Paper
SYSPRO for the Food and Beverage Industry
Today, food manufacturers are facing tougher challenges than ever before. In order to meet the
Food & Drug Administration’s requirements for recordkeeping and lot-traceability, food manufac-
turers must have the ability to track and identify all ingredients in each product, from initial ingre-
dients purchases through manufacture to finished goods, shipment and final customer delivery.
Manufacturers are forced to accelerate time-to-market despite being faced with constant changes
in tastes and trends in a regulated industry. These demands and constraints drive food manufac-
turers to look to software systems to facilitate business process re-engineering to help eliminate
non-value-added processes, increase productivity and comply with governmental regulations.
To meet the stringent requirements of the Food Safety Modernization Act and the Safe Quality
Food Standards, companies must be able to identify and trace every single ingredient consumed in
the manufacturing process, from receipt through processing, packaging, and shipping to the cus-
tomer. So how can today’s manufacturer avoid the complexity of regulatory compliance that can
ultimately stall their growth? The answer is simple. With the right Enterprise Resource Planning
software solution.
The ability to manage production quality is essential to food and beverage manufacturers. ERP
systems must provide the capability to track real-time data on all aspects of manufacturing and
supply during production, and archive the data for future reference.
Quality management enables food and beverage manufacturers to track inspection results, non-
conformance and supplier management, and other best practices. For transparency, the quality
functions should provide seamless integration with supply chain management functions to give
manufacturers a complete view of their quality performance.
SYSPRO meets the requirements of the food and beverage industry by providing highly tailored
and congurable Enterprise Resource Planning (ERP) software that can help address key business
needs. SYSPRO has been selected by companies across the globe to address common business
issues through the system’s industry-specic functionality.
Excellent tracking of products by lot is critical for us. SYSPRO gives us
the tools to meet the current and foreseeable HACCP requirements.
Barbara-Ann O’Brien – Manager, Bonté Foods, Canada
The Industry
Critical issues facing the food industry include heightened levels of regulation in the form of quality, docu-
mentation and traceability, customer demands for variety and innovation, low profit margins and shelf life
management. Consistent quality of raw materials cannot be guaranteed, necessitating dynamic recipes
and variable processes. Forecasting in the final stages of production centers around packaging sizes.
Demand is driven by food consumption, which depends on population growth and demographics. Compa-
ny profitability is dependent on efficient operations because products are commodities subject to intense
price competition. Large companies have advantages in distribution operations.
Processed foods are marketed into three different channels: consumer, food service and food processing.
Marketing for consumer products is often through food brokers, who place product with grocery chains.
Local operators may sell directly to local chains. Food service and processing sales are handled by a sales
force and wholesalers. Many processors produce private-label brands under contracts with local and re-
gional retailers.
Food Safety
Food safety is the primary concern of consumers,
with Salmonella, E.coli, SARS, mad cow disease
and genetically modified organisms cropping up
around the world. More than 76 million illnesses
are caused by food contamination every year in the
United States alone.
Government food safety regulations are not con-
fined only to aspects such as expiration dates and
packaging, but also extend to traceability of the
product throughout the entire supply chain, from
raw materials through manufacturing to shipment
and final store delivery. The capability to track (farm
to fork) and trace (fork to farm) details per product
or per lot is critical in the food industry. Tracking be-
gins when raw materials are received. The date and
time of receipt is recorded along with the product
name, shipping data and lot number. For a man-
ufacturer, consumption must be recorded to link
the consumed material to the end product lot. This
includes ingredients, packaging materials and all
equipment that touches the product.
The operating personnel who are involved in the
manufacturing or distribution process should also
be tracked. The key people are those who receive
the material and those who run the process since
they have the greatest impact on the safety and
security of the final product. For food manufactur-
ers and distributors, shipping information must be
recorded, including lot numbers and selected ship-
ping details.
The ability to trace ingredients, parts and lots to
the source is very important in the food industry
as demonstrated by the recent contamination of
pet food in the United States. More than 60 million
cans of dog and cat food were recalled on March
16, 2007, by Menu Foods of Streetsville, Ontario,
manufacturer of store brands for companies such
as Wal-Mart, Kroger and Safeway, and for brand-
name pet food companies, including Iams, PetCare
and Science Diet. The company recalled gravystyle
foods made from Dec. 3, 2006, to March 6, 2007,
after hearing complaints that an unknown number
of cats and dogs who ate the food had kidney fail-
ure, and about 15 died.
The contamination was traced to wheat gluten
from a company in China. The Food and Drug Ad-
ministration acted against wheat gluten from Xu-
zhou Anying Biologic Technology Development Co.
in Wangdien, China. The pet food was determined
to be tainted with the chemical melamine, which
somehow became mixed with the
Traceability
Complete tracking functionality affords ex-
tensive visibility up or down the supply chain,
thereby providing the means to expedite recalls,
should the need arise.
Order Templates
SYSPRO provides a number of sales order pro-
cess-ing options, including order templates and
recent orders for repeat customer orders, which
process hundreds or thousands of orders per day
by fax or phone.
Electronic Data Interchange (EDI)
Exchange business transactions automatically and
electronically in standardized formats between
trading partners.
Compliance
Manage regulatory requirements including HAC-
CP, GMP and SQF with fully integrated process-
es based on raw materials receiving, production,
packaging or shipping steps. Provides electronic
signatures with transaction audit traceability.
Load Planning
Manage your delivery schedule, loading processes
and service promises. It aims to improve your pick-
ing, planning, scheduling and delivery of orders.
Recipe Controls
SYSPRO’s recipe management solution helps or-
ganizations manage recipes, ingredients and prod-
ucts while supporting them through all stages of
the development process.
Forecasting
SYSPRO’s Inventory Optimization (IO), together
with Inventory Forecasting, Families and Group-
ings, and Requirements Planning provides the tools
and processes to optimize stock levels, ensuring
stock is in the right place at the right time, and re-
duces obsolescence.
Production and Shop Floor Reporting
Anticipate and reduce bottlenecks, improve con-
trol of production processes, and increase visibility
to respond quickly to demands. Capture real-time
shop floor information, increasing eficiency and re-
ducing operating costs.
Dashboards and KPIs
Deliver reporting tools and a business intelligence
platform that provides access to relevant, real-time
data across your organization.
Page 3 | White Paper Page 4 | White Paper
Regulatory Compliance
With the U.S. Food and Drug Administration (FDA)
having authority over more than 80% of the U.S.
food supply, the U.S. Bioterrorism Act of 2002 has
more impact on the worldwide food industry than
all other regulations combined. The Bioterrorism
Act pertains to all companies that manufacture,
process, pack, hold, transport, distribute, or receive
regulated food products.
The Bioterrorism Act has significant impacts on
food manufacturing operations:
Food companies must establish and maintain
a record of the source and destination of ingre-
dients and products. This is called the “One-Up,
One-Back Traceability” rule.
Trace-Back: For all products intended for human
consumption, the processor must maintain the
source identity of all the ingredients contained
in that product.
Trace-Forward: For all ingredients received, the
processor must be able to identify the diffusion
Automated Traceability
To address the brand protection and mock recall demands of customers, automated traceability systems
have become a requirement for food processors up and down the food chain. For many food processors,
their current challenge is to find a solution to traceability that is both cost-effective and a good fit for their
current business operations. With an automated system for traceability, incoming materials, manufactur-
ing operations, inventory management and customer shipments are all traced in a manner similar to that
of established accounting systems.
In an accounting system, the general ledger (GL) serves as the central repository of all financial transac-
tions. In automated traceability systems, the electronic batch record (EBR) serves as the central reposito-
ry of all operational transactions. Automated operational systems are often linked directly to production
lines and to inventory (through barcode and RFID systems) to streamline the flow of critical data directly
into the electronic batch record. This reduces the risk of errors during data entry and also speeds the flow
of information to support real-time visibility and analysis for company executives.
The advantages of an automated production tracking system are significant: n Instant Traceability
An automated traceability system provides end-to-end traceability for every action that can impact food,
starting with orders placed with suppliers and ending with the receipt of finished goods by customers. At
any point in the supply chain, a food processor is able to trace back to the source of all ingredients and
trace forward to the disposition of all finished products. n Confidence
With instant traceability, food processors can gain the confidence of customers, auditors and regulatory
inspectors. By establishing the confidence of these constituents, processors can establish a competitive
advantage that can add real, measurable value to the business. n Improved Bottom-line Performance
With an integrated production tracking system, food processors have the ability to improve the financial
performance of the company. Detailed visibility into product line costs and profitability, manufacturing
efficiency, inventory spoilage and many other operational metrics can expose hidden opportunities for
improvement.
Additionally, improvements in forecasting, scheduling and order fulfillment can have a positive impact on
customer service. The same automated system that addresses the “overhead” requirement of traceabil-
ity can also be used to improve bottom-line profitability and competitiveness.
of the ingredients in all intermediate and fin-
ished products. n Processors are required to cre-
ate tracking records at the time of processing.
They must maintain the records for a minimum
of two years and they must make the records
available to the U.S. Food and Drug Administra-
tion (FDA) within four hours if requested.
Food importers must notify the FDA at least
one day before a shipment arrives in the United
States, disclosing details on the shipment and
the contents and estimated arrival time.
Regulatory compliance is not just about the regu-
lations. Regulations focus on both minimizing risk
through Hazard Analysis and Critical Control Point
(HACCP), and responding to incidents through re-
calls. How aggressive a food company becomes
in compliance efforts should be based on the risk
level. of an incident. Categories that process or sell
fresh product (for example, seafood, meats, fruits
and vegetables, and dairy) are at higher risk of hav-
ing an incident occur.
Brand Protection
Food suppliers are expected to prove that they can consistently deliver high quality products to ensure they
do not put their customers’ brands at risk. In light of recent high-profile food contamination events in the
news many food processors now find themselves measured on their ability to help customers protect their
brand equity.
Historically, food processors have competed for business based on metrics such as price, product consis-
tency and customer service. In today’s highly competitive market, the processor that can demonstrate the
most reliable means of brand protection can have a significant competitive advantage. The demands for
brand protection begin at points closest to consumers in the food chain and then cascade back all the way
to the food source. Every participant in the supply chain assumes the risks of poor quality control, regard-
less of which partner in the supply chain may cause a problem.
One of the ways that food processors are being tested for brand protection is through food safety audits
and mock recalls. Many processors that supply the national retail chains are now conducting mock recalls
on a quarterly basis. For a food processor, the cost of a failed mock recall can be catastrophic. Compared to
the initial warnings that might be imposed by the FDA, a customer may switch to another supplier based
on the failure of even one mock recall.
Page 5 | White Paper Page 6 | White Paper
Barcoding
Compliance requires linking ingredients to end-items. This is best accomplished by real-time recording of lot
numbers and the actual quantity consumed. Using bar coding, computer-based batch sheets generated by the
ERP system will link consumption to end-items with accuracy.
Management should consider data-collection methods that lower the time and costs involved. Barcoding can
strengthen regulatory compliance, improve manufacturing lot tracking and traceability, develop visibility into
operations and streamline and automate many of the distribution processes.
Barcoding benefits include: n Automated regulatory compliance and integration into the ERP
Facilitation of target-product recall and minimized exposure
Significant reduction in time required for a recall, from several hours to minutes
Increased food safety through ingredient tracking
Improved inventory accuracy n Reduced manual recording
Increased visibility and more accurate costing information
Improved yields across manufacturing processes
The benefits of using barcoding for data collection are speed and accuracy. According to studies, entering bar-
code data is at least 100 times faster and more accurate than traditional manual keyboard entry, producing
a dramatic increase in efficiency and productivity for any operation. When barcodes are used in the business
process, procedures are automated to improve efficiency and increase productivity. As a result barcoding can
yield tremendous return in a short period of time and often eliminates the need for additional warehouse staff.
How SYSPRO can help
Food companies today must increase efficiencies, reduce costs and ensure compliance with food regula-
tions across the entire supply chain. Companies using SYSPRO can react rapidly to changes in customer
demand through access to real-time supply chain information. SYSPRO provides a totally integrated enter-
prise business solution that encompasses:
CRM n ERP n Planning and Scheduling
Business Analytics
deliver efficiencies through maximizing throughput
and resource utilization by leveling off production
peaks and troughs.
Improved decision making is based on what’s sched-
uled and what’s running, capacity, resources, labor,
work orders, overloads, skills, potential problems,
set-up, tear down and pegging. SYSPRO enables a
manufacturer to decide where to make the product
with what resources, and to specify sequence sched-
uling thereby improving throughput. This functional-
ity provides the ability to synchronize and integrate
a variety of manufacturing techniques all within one
fully integrated software system.
SYSPRO provides all the facilities to control both
short and long production runs; however, since the
batch size of a particular product can vary from a few
units to several thousand units, SYSPRO will calcu-
late the dynamic elapsed time of an operation or job.
Environments include assemble-to-order, blend-to-
order and finish-to-order through make-to-order.
(continued page 9)
E-Commerce
SYSPRO can improve customer service levels with
real-time visibility across the entire enterprise, on-
time deliveries and quick response to change-orders.
Flexible pricing options, plus the ability to manage
promotions and deductions allows profit margins
to be optimized. The ability to plan truck loads and
routes further improves service and efficiency.
Fully integrated financials ensure that costs and
expenses are accurately recorded to provide at-a-
glance information of the bottom line. The ability
to analyze your company information is the key to
success. SYSPRO Analytics provides informed de-
cision making, with the ability to slice and dice the
data from all areas of your business. Easy manipu-
lation of the views with drill down to detail provides
the insight and flexibility required to run a successful
business in a rapidly changing world.
Having the right product at the right time is particu-
larly critical for the food industry. SYSPRO Inventory
Forecasting is a powerful tool that helps plan for the
right mix of products, while reducing inventory and
facilitating optimum inventory levels. SYSPRO In-
ventory Forecasting is easy to use and flexible and
has the ability to determine the best algorithm to
use, per item; it takes the guess work out of fore-
casting.
SYSPRO manufacturing modules offer an array of
features for estimating, master scheduling, factory
scheduling, labor performance, costing, purchasing,
receiving, backflushing, material verification and
capacity and material planning. SYSPRO’s powerful
lot and serial tracking functionality provides the at-
a-glance “source to sale” tracking required by the
food industry. The SYSPRO manufacturing suite of
applications enables manufacturers to keep finished
goods in inventory at an absolute minimum and
Page 7 | White Paper Page 8 | White Paper
How SYSPRO can help
SYSPRO Barcoding Solutions provide an integrated
data collection solution for all inventory, warehouse
management, sales, purchasing and work in prog-
ress transactions, reducing data entry time and in-
creasing operational accuracy and eliminating the
need to perform post-processing paperwork. SYS-
PRO Barcoding is a Web application which means it
can operate on any piece of hardware utilizing Inter-
net Explorer, such as a desktop PC, laptop computer,
cell phone or a handheld barcode scanner. SYSPRO
Barcoding enables realtime tracking of inventory
from the time raw materials are received through
all phases of manufacturing and distribution. Man-
agement always has an up-to-date record of inven-
tory and work-in-progress. Barcode scanning also
enables real-time shop floor data collection to track
production and capture labor and overhead costs.
SYSPRO’s Lot Traceability module as well as to oth-
er modules facilitates the ability of manufacturers
to trace parts and lots. This is very important in the
food industry to guarantee public safety and to com-
ply with government standards. In addition to en-
abling users to trace items from their source to the
current location while maintaining assurance certi-
fication and tracking expiration dates, the module
enables one-to-one tracking between component
serials/lots and parent item serials/lots. This gives
SYSPRO offers you:
Design Control - Extensive design control system allows you to manage incoming/receiving and in-process
inspections, electronic digital signatures, materials and quality dispositions along with complaint tracking and
non-conformance reporting
Document Control - Maintain an accurate and up-to-date system with SYSPRO document control, engineer-
ing change controls, process instruction sheets, maintenance and repairs, as well as health and safety
Purchasing Control - Manage your approved vendor list, inspections, work in process (WIP) and audit trails, as
well as get insightful reporting on trend analysis, supplier performance and corrective actions
Traceability - Comprehensive inventory management system enables better batch/lot and serial tracking, lot
traceability, shelf life expiration monitoring, FIFO/ LIFO, bar code identification, and more inventory and distri-
bution control capabilities
Compliance & Regulations - Facilitate compliance with recall processes, ISO compliance and other the strin-
gent requirements of regulators domestically and abroad.
manufacturers the ability to track which component
serial numbers were used in the production of a par-
ticular parent serial number and which component
lot numbers were used in the production of a partic-
ular parent lot. The module, also maintains a history
of traceable items for accountability and customer
service follow-up and keeps detailed notes about
inspections.
SYSPRO Electronic Signatures enables manufac-
turers to secure transactions by authenticating the
operator who is performing the transaction. This is
useful for businesses that require Sarbanes-Oxley
compliance or those who simply need to control who
in the company is allowed to process various trans-
actions. Electronic Signatures ensure the integrity of
transactional activity within SYSPRO, logging who
did what and when. Electronic Signatures can be
configured against a list of key business processes
on a transaction by transaction basis to provide se-
curity access, transaction logging and event trigger-
ing. Transaction logging enables users to generate
an audit file of completed transactions. Event trig-
gering enables users to send an email notification
or run another application following the successful
processing of a transaction.
Page 9 | White Paper
SYSPRO is a global, independent provider of
industry-built ERP software designed to simplify
business complexity for manufacturers and
distributors. Focused on delivering optimized
performance and complete business visibility, the
SYSPRO solution is highly scalable, and can be
deployed on-premise, in the cloud, or accessed
via a mobile device. SYSPRO’s strengths lie in a
simplified approach to technology, expertise in a
range of industries, and a commitment to future-
proofing customer and partner success.
SYSPRO has more than 15,000 licensed
companies in over 60 countries across six
continents.
About SYSPRO
SYSPRO provides a unique combination of robust, scalable solutions
that ensure minimal risk and a high return on investment.
Africa and Middle East
SYSPRO Africa
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Tel: +27 (0) 11 461 1000
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+254 720 909 530
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Canada
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Suite 215
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British Columbia
Canada
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Toll free: +1 888 259 6666
Email: [email protected]
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USA
Tel: +1 (714) 437 1000
Toll free: +1 800 369 8649
Email: [email protected]
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Australia
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3168
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Singapore
059818
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SYSPRO Europe
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50 Kansas Avenue
Salford Quays
Manchester
United Kingdom
M50 2GL
Tel: +44 161 876 4498
Email: [email protected]
www.syspro.com
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Don’t Get Stalled by Compliance Complexity
Learn how you can meet the requirements of the food and beverage industry with highly tailored and configurable ERP software that can help address key business needs.