U.S. Nut Snack Manufacturer Upgrades Business Software to Better Trace Products and Enable Recalls
By Heather Angus-Lee
As a busy production facility making 11 lines of blended-nut snack products at the rate of 2,000 lbs. an hour, Sahale Snacks juggles many production issues—and product traceability is one of their most vital issues. Like many food manufacturers, the Seattle, WA company lives under a double-edged sword of compliance: the strong-arming of mass merchandising customers to meet their safety regulations, as well as tougher government legislation on food safety. Sahale recently decided to invest in an ERP (enterprise resource planning) system to meet compliance as well as improve efficiencies of their business processes.
Their largest retail customers—including Costco and Starbucks nationally—apply stringent regulations to ensure suppliers implement programs such as the Global Food Safety Initiative, Safety Quality Food Institute, Food Safety System Certification and British Retail Consortium Global Standards, all of them requiring third-party audits. Although customer-enforced compliance takes a large toll on a food processor’s stretched resources, Sahale has always looked to stay ahead of these regulations.
Like everyone involved in food production, Sahale Snacks has been closely following events since the Food Safety Modernization Act (FSMA), includes a major section on product tracing, was signed into law by President Obama last year. One result of FSMA is the creation of ongoing pilot projects conducted by Institute of Food Technologists—in partnership with the U.S. Food and Drug Administration (FDA), the food industry, other government partners such as the U.S. Department of Agriculture, state public health agencies and consumer groups—for the purpose of developing a national food tracing system. Participants in the pilot projects are working to identify the source of outbreaks through more rapid trace-back and trace-forward investigations to better prevent future outbreaks and illnesses. FDA’s Transparency blog gave an update in March 2012 about these projects; so far nearly 1,000 individuals and organizations have been asked for their input, and the types of foods being focused on are tomatoes, frozen Kung Pao-style chicken dishes, jarred peanut butter, and now expanded to include dry, packaged peanut/spice.
Top Allergens in Their Snacks
Ten foods, and their derivatives, account for most food-allergic reactions, including peanuts, almonds, cashews, pecans and pistachios—and Sahale Snacks uses all these nuts in their snack foods. Thus, they had to find the most accurate, fastest way to lot-track every raw material right through to every finished good going to the end customer. “One of our biggest business challenges in recent years has definitely been to have the best practice product traceability processes,” says Lindsay Palmer, supply chain coordinator at Sahale Snacks since 2007.
At the nut-snack production facility of Sahale Snacks, traceability requirements include lot tracking on all items that come in direct contact with food—which is all of their ingredients, and all their packaging. They use a lot algorithm when creating lots to remove user error, and the ability to perform bidirectional recalls in the fastest possible time. “Our company expectation was always that we have the ability to do a full recall, forwards and backwards, within 2 hours, and our goal was to reduce that to 20 minutes,” says Palmer. “In our old system, in mock recalls we were always able to meet our expectation, but our record time was 35 minutes. Now that we are in a full ERP system, mock recalls take under 5 minutes.”
The implementation of the new ERP system includes well as a unique functionality known as “the 60-second recall.” This bidirectional product recall includes immediate integration to Microsoft Word and Outlook for letter writing and notification. “It used to be just a few of us who were specialized in food recall, and we like to go on vacation sometimes!” Palmer notes. “Now, anyone can just type the lot number into the ERP system, and a click a button to trigger the recall. Almost all employee’s within our 80-employee organization can act as backup for the critical business process of a product recall.”
Since their ERP system went live, Sahale hasn’t experienced a recall; however, they had been affected by the U.S.-wide pistachio recall of 2010 regarding possible Salmonella contamination. “Nuts were considered a pretty safe food until about 2 years ago,” notes Palmer. “Then there was a large peanut recall, then the pistachio recall.” Sahale was a part of the latter recall, since one of their suppliers delivers pistachios. Since they were using pivot tables within Excel to manage it, that recall “was successful but not pleasant,” she remembers. Nevertheless, they still got the recall done in under an hour,” not counting all the extra work for Sahale’s administrative staff such as mailing out letters to all their customers. “It give’s us peace of mind knowing that we could handle a situation like that much faster and much easier,” notes Palmer.
The FDA is now mandated to conduct product recalls, which can take place if food becomes contaminated—at any number of stages in the supply chain—because an allergen isn’t listed on the food label; if the food came in contact with an allergen at some point during processing; foreign materials were found in the batch; or current Good Manufacturing Practices regulations weren’t followed. The possibilities are endless, and now Sahale employees feel more recall-ready than ever since their new ERP system, Palmer and her coworkers at Sahale feel even more prepared for a product recall, with optimized reporting and tracking of data, and the technology and processes in place to support it.
A holistic view of food safety incorporates “prevention-and-proof” as well as the traditional “record-and-response” approach to lot tracking and recall. Prevention-and-proof approach includes features such as:
• Built-in quality procedures that can enforce quality audits at various stages of material movement, from receiving through to shipping. All relevant quality control test data recorded and retained permanently.
• A preventive maintenance module that ensures proper maintenance of plant facilities and production equipment.
• Inventory picking based on “first expiry-first out” principals, enforcing inventory picking through directed or suggested methods.
• Inventory expiry analysis to show raw materials and finished goods that are expired, or nearing expiration, to help enforce rules from customers.
• Tracking the nutrients in an item, and comparing those nutrients against the government’s recommended values.
• Full food safety reporting and document retention to satisfy the most thorough external audits.
• Samples data recorded and retained permanently.
• Dates of receiving, movement, transfers, picking, staging and production recorded.
• Allergens recorded.
• Lot number changes recorded as the product is produced, while tracking each lot number of stated ingredients.?
• All relevant tests, production activities, inspections, incubations, and all scheduled processes applied to each batch, are recorded.?
• Finished good shipment data is recorded, including lot number of finished good product and packaging, name, address, phone number, fax number, email address, transportation carrier, bill of lading number, mode of transportation, date of delivery and COA if applicable.?
• A complaint management system for handling, investigating and resolving complaints.
Since Sahale Snacks imports most of their nuts and spices from other countries, it was important for them to be able to track the countries of origin for raw materials all the way through to the finished goods, which they can do with their ERP system. That visibility is particularly a hot topic these days, given the publicity around some bad materials coming from various countries.
Many food processors have product-tracing systems in place, but not all of them are created equal. They will vary depending on the following: how much information the system records; how far forward or backwards in the supply chain the system tracks; the precision with which a system can pinpoint a product’s movement; and what technologies are used to maintain records.
Product traceability and recall functionality “was one of the top priorities in our selection of an ERP vendor,” says Palmer, who was project lead for the implementation. “We needed a software and services company with enough of a food clientele base, and food expertise, that they would grow with us. As the new regulations come in for food, as the industry changes, our system has to be able to make the needed changes.” Finding the right ERP software and implementation partner is not an easy decision in a crowded marketplace: Palmer and her colleagues spent—a cross-departmental team of 10 including the chief financial officer as executive sponsor—spent a full year researching ERP systems and meeting with vendors. The final four—Syspro, Deacom, SAP BusinessOne and JustFoodERP—went to Seattle to demonstrate their technology and how it worked for Sahale’s issues.
Palmer says they narrowed the selection down to SysPro and JustFoodERP, and ultimately went with the latter because “their model fits our business better,” says Palmer, explaining that “JustFoodERP uses a product roadmap that is so compatible with where we are going as a company,” such as the recall and product traceability features, as well as ‘more manufacturing-friendly scheduling tools.” JustFoodERP provides food-specific software powered by Microsoft Dynamics NAV, and a services team comprised of professionals from the food industry.
Sahale Snacks is part an industry that never stands still for long—with an ever-growing importance placed on the ability to nimbly and appropriately adjust to changes in legislation, to customer demands, and the global economy. Choosing a food vertical-specific ERP system has given Sahale an advantage in being able to meet the regulatory compliance, while keeping their operations as profitable as possible.
Heather Angus-Lee is a longtime business journalist, including as the editor of Manufacturing AUTOMATION Magazine. She can be reached at [email protected].