All food distributors are required to have processes which include lot traceability, as a result of both government regulation and manufacturer and retailer demands. Both the US and Canadian governments have requirements that apply to all levels of the food supply chain in which each company, at a minimum, tracks where product has come from and where it gets sent to. Further, many retailers and even end consumers are demanding even more information. In the past, the demand for lot traceability was largely related to recalls, however the functionality is increasingly being used for individual ethical reasons. Where a product was produced, and under what conditions are factoring into consumer buying trends. Is a product Non GMO certified, does it come from a country with less than ideal labour conditions? Much of this information can be gathered through detailed product tracking.
Core ERP features for product traceability include the ability to trace history of a product prior to the distributor obtaining it and maintaining detail of where the product was sent to. At a minimum, this information will include the supplier, lot number, expiry date, production date and the customer the product was sold to. In the event of a recall, proper software will be able to generate reports with the above information in order to notify appropriate parties and begin the recall process as quickly as possible. The ability to respond quickly and efficiently to any product recall can be the difference between maintaining a customer’s trust and losing them to competitors with superior processes in place.
While still the party held most responsible, manufacturers of product are no longer the only ones blamed by consumers for product recalls. As seen in a survey performed by Software Advice end-consumers feel that parties at all levels of the supply chain should be held accountable for product recalls.
Party Consumers Hold Responsible for Recalls in Food Supply Chains
So when does a food distributor need to switch to an ERP system with strong lot traceability functionality? That really depends on the size of the company, and the alternative methods it has available for lot tracking. Companies with a small amount of products and small customer and supplier lists may be able to lot track products through manual methods or by using standalone software. Once a company grows however, manual and stand-alone methods will become too cumbersome – it is at this point that an ERP system with strong lot traceability features becomes necessary. A proper ERP system creates cost saving opportunities for businesses by reducing labor costs and the costs associated with manually managing a recall. Furthermore, even if the distributor is small they may need to implement an ERP system if they want to deal with the big boys. Many big-box retail businesses will only deal with distributors with ERP systems and traceability functionality in place as a way to ensure that the products which they carry can be properly traced back to source.