If you operate anywhere in the food and beverage industry, it is your responsibility to know the quality and safety of your goods and meet a variety of compliance requirements, or your entire operation is at risk.
Lot tracking is one of the most effective tools you can implement to not only understand your inventory but also to address legal concerns before they happen, or reduce the harm and risk to your customers and process manufacturing business when a problem occurs.
The importance of lot tracking and proper governance can’t be overstated, especially when it comes to the visibility lot tracking provides you, your partners, and your customers.
1. Minimize legal issues
One of the most obvious benefits of implementing lot tracking for any perishable is its ability to increase speed in understanding and containing contamination or other health risks.
Salmonella outbreaks have done major damage to companies, not to mention the health of individuals. In 2017, there were thankfully few major outbreaks. One large outbreak was linked to Maradol papayas from Mexico, which sickened 235 people.
Lot tracking limited the harm because the food industry was able to track2 to outbreak back to four farms specifically, and lots of papayas distributed from July 10 to July 19. Within three months, the U.S. Food and Drug Administration had not only issued recalls for all affected papayas, but it also identified Salmonella strains and increased testing to prevent further risk.
Increased scrutiny significantly reduced the risk to consumers as well as the financial risk to farms, suppliers, distributors, and grocery stores as well as restaurants. Regulators like the FDA will also shut down any business that it does not feel can adequately respond to an audit or mock recall.
2. Improve warehouse space management
There are two big threats to your warehouse: running out of space and running out of stock. Lot tracking can help address both.
Monitoring your lots and inventory levels can show you the performance of different products and allow you to automate the process of re-ordering goods as you need them. If your resupply is well-timed, you avoid ordering excess while also minimizing the chance that you’ll run dry. Lot tracking can provide a variety of measures, supporting counts of what’s on-hand, allocated, available or on-hold.
Inventory-level management is important to every partner in the supply chain. Lot tracking and sharing of this data will not only help you keep in stock but can allow your providers and partners to know when they may need to re-order their own goods to meet your next purchase.
3. Master FIFO to improve raw material usage
Consumer food products often start with a variety of perishable raw materials. If you fail to use the oldest materials first, you can end up wasting a lot of money on inventory and warehouse cleaning.
Consider natural juice production. You’ve got a variety of flavors that often use some of the same ingredients. The better you’re able to make use of the first-in-first-out rule, the more raw materials you can put into each of your production lines before they perish. So, smarter FIFO adherence can make all your lines more profitable. Lot tracking is a straightforward way to ensure that you’re pulling from the oldest lots.
Without lot tracking, you may end up not properly rotating stock so that you’ve got crates of fruits in the back that go bad and begin to rot. This can be especially bad with some fruits like bananas that can cause other pieces of fruit to ripen and rot more quickly — ripe bananas give off high quantities of ethylene gas.
Lot tracking is one of the best ways to improve your inventory visibility to make
4. Responds to customer demands
There is a huge demand for sustainably sourced goods, and it is impacting a wide range of industries and food products, including some that may seem a little fishy when you first hear about them.
Companies are looking at blockchain-focused lot tracking, it’s bringing tech to the world of fish, and will soon be able to allow consumers to track the entire journey from ocean catch to the dinner table.
The blockchain is important for visibility because it creates an immutable ledger that anyone with the right system can see. Using RFID and QR technology it makes records access even easier.
Not only does visibility make goods safer and improve relationships within the supply chain, but it makes the end-consumer more comfortable with a purchase. Potentially, this means that visibility via lot tracking could increase sales.
Geoff Whiting is regular Explore WMS and ERP Focus contributor and an experienced journalist, writer, and business development consultant with a focus on enterprise technology, e-commerce, and supply chain development. Outside of the office he can be found toying with the latest in IoT, searching for classic radio broadcast recordings, and playing the perpetual tourist in his home of Washington D.C.