The Food Safety Modernization Act (FSMA) requires manufacturers and processors to evaluate and identify food safety hazards, implement preventive controls, and document those measures. Many companies see these regulations as a means of raising the bar for the food and beverage industry. It could be argued that standards are long overdue. Consumer confidence in food manufacturers is low. According to the 2016 Food and Health Survey conducted by the International Food Information Council (IFIC) Foundation, only 10% of respondents view manufacturers as trusted source for food safety.
More educated consumers combined with tougher industry standards are creating an environment where food manufacturers need to take additional steps to ensure their processes can meet these expectations. An ERP system specifically designed for food manufacturers will benefit a company as they comply with FSMA regulations regarding preventive controls, traceability, and documentation. Forward-thinking businesses are going even further, by exploiting the full capabilities of the system in order to improve efficiencies, reduce costs, increase margins, and increase customer service levels.
The Best Defense is a Good Offense
Prevention is the cornerstone of FSMA and is an important issue to consumers. Up to 15 million Americans have food allergies, and reactions can vary from a mild response, such as a rash, to anaphylaxis, which can be fatal. Undeclared allergens are the leading cause of recall. There were over 600 recalls in the United States and Canada in 2015, and a third of those were due to the same allergens: milk/dairy, peanuts, eggs, and wheat/gluten.
Food safety standards recognized by Global Food Safety Initiative (GFSI) are a good defense against potential recalls. When these certifications are complemented by intelligent technology, the protective net around the company tightens. For example, an ERP system with Allergen Control can prevent the creation of recipes containing allergens that are not allowed in the product being produced, as well as control material issues preventing ingredients to be added that are not declared on the label. In addition, using sequencing rules to manage when products with allergens are produced can help reduce any chance for cross contamination. As an additional benefit, improved sequencing using the planning and scheduling tools in ERP can also help reduce changeover times between jobs, thereby increasing utilization resulting in additional production capacity. Software can also capture and analyze data to identify where bottlenecks occur and allow managers to assess and correct such situations. What started as compliance with preventive controls became a more efficient production line, which can lead to greater revenue for the organization.
An Ounce of Prevention is Worth a Pound of Cure
The industry average cost of recalls is $10 million in direct costs, as well as brand damage and lost sales. Actual total loss data is seldom available, and the scope of the damage can be dependent on how well media attention and public perception is managed. Financial analysts estimate that Chipotle will have lost approximately three years of earnings between fiscal years 2014 and 2017, due to outbreaks of E. coli and norovirus. Additionally, they expect to spend about $50 million in food safety measures and marketing campaigns to regain consumer trust.
Hazard Analysis and Critical Control Point (HACCP) plans are the starting point in identifying vulnerabilities. By implementing a comprehensive track-and-trace solution, a company has the ability to conduct an efficient, targeted recall that minimizes potential harm to consumers and negative impact to manufacturers, distributers, and retailers. Using real-time data, problems can be quickly identified and drilled down to the exact culprit within the supply chain, thus avoiding mass recalls. Mock recalls utilizing a robust traceability system reduces the timeframe to execute a recall from days to minutes. Fewer recalls improve bottom line performance; recovery expenses are avoided, the company brand is protected, and supplier relationships are preserved.
Don’t Get Lost in Translation
FSMA regulations require much more stringent data management procedures; there are guidelines as to what data must be recorded, how to record it, when it must be recorded, and which employee recorded it. Standalone applications and homegrown measures can be time-consuming as information is keyed into multiple systems, and the probability of inaccurate information increases due to errors in reentering data. Comprehensive reporting also becomes difficult as information has to be pulled from various systems and compiled in another.
A fully integrated ERP system provides a single source of truth. It should be powerful enough to capture detailed data and flexible enough to produce reports suitable for an auditor. Errors decrease and quality increases when employees have access to documented processes. Business intelligence and analytic solutions present Key Performance Indicators (KPIs) that make it easier to identify situations that require attention. Drill-down capabilities enable users to identify trends and conduct root cause analysis. Real-time information is available to support manufacturing and distribution activities. Managers can focus on strategic planning rather than time-consuming administrative tasks.
FSMA will have some kind of impact on almost every food manufacturer. While compliance is mandated, there can be additional benefits for those organizations that choose to go beyond the minimum standards. A comprehensive ERP system allows a manufacturer more in-depth information about their operation. Such a view allows for improved inventory management as resources are better utilized; increased customer service levels as more accurate electronic records are used in forecasting and planning; and increased efficiencies as workflows are simplified and the possibility of human error is minimized. The end result is a more productive, more profitable organization that has earned the trust of its customers and the confidence of consumers.
In a recent interview, famed fantasy writer George R.R. Martin discussed how flags were a large part of developing such a creative mind at such an early age. Martin tells the story of growing up in New Jersey overlooking Manhattan and watching ships sail in and out of the harbor from all across the globe. He would look at the flags flying high atop these ships and craft stories about the peoples and lands from where they came. The author marveled at how something as simple as flags can convey so much information and create such a level of curiosity.
In our post today, we will draw comparisons between flags and a means of succinctly conveying information in our businesses today. What does a flag really do? What is its purpose? I would argue that flags are used to communicate information about nations and organizations in as simple a way as possible while remaining easily identifiable. Flags primarily use colors and shapes and, at their very best, are immediately recognizable. Take the flags of the USA, UK or Germany as examples. These would likely be recognized by the majority of the world’s population, and all done with just the use of colors and shapes.
So what does this have to do with us as we are busy running our businesses? Isn’t there something that you use daily, or perhaps many times throughout the day that is essential to communicating information in its simplest form? How about Dashboards? Are you getting the most out of yours?
Dashboards exist to provide an organization with a means of conveying data to their audience. But what are the elements of really effective ones? Let’s consider these four essential elements as we consider how to make best use of this tool to better improve our operational performance. Dashboards should be:
A good dashboard should be aligned to your organizational goals. Think of what is on your dashboard as prime real estate. Only the essential information should be included here so you don’t risk anyone tuning out due to a busy screen that they have to parse through to understand. This is your means of conveying key metrics that you want to communicate to your teams, so keep it simple and direct. This will also provide you with a means of aligning your team to your objectives as everybody will be looking at the same things and clearly understand what is important to their organization.
Dashboards should also be visual in nature. Consider the saying, “a picture is worth a thousand words”. You want the viewer to immediately understand what is being represented and equipped to take action without having to ponder about the content on the screen. Try to use as many charts and graphs as possible and make sure to use colors to identify important elements of the data. The key here is to make certain the information is understood clearly and immediately.
Another important element of an effective dashboard is that it is highly accessible. You want your team members to always be able to gauge how they are performing without having to seek out the information. By distributing this data effectively, it reinforces that everyone is on the same page. This allows for real time adjustments and a visual means of seeing the effect(s) of teams working together to set and achieve their goals.
The information you are distributing on your dashboards should be relevant. It should be refreshed frequently or be precisely the data that you want to communicate to drive action (last shift, last product run, last week, last month, last quarter, etc.) Be mindful to continuously review what you are distributing with your dashboards to ensure it is exactly what you want to communicate, or you run the risk of losing employee engagement.
I hope you like my idea of dashboards being flag for your organization. Everyone should immediately understand what it is being communicated and operate as a team under one banner. I strongly believe in their ability to drive excellence in your organizations if utilized effectively.
If you would like to discuss how to improve your dashboard, please reach out to me or your account executive to discuss how Aptean can work with you to make your dashboard a key element in delivering results for your organization.
The recent $100 million Consumer Financial Protection Bureau (CFPB) fine levied on a leading financial institution in the US marks the largest penalty imposed by the CFPB to date and makes the case for implementing a complaints management solution. With potentially millions of customers affected by the systemic fraud from the company’s employees over a five year period of time, it makes sense that some of these customers complained to this financial institution at some point before contacting the CFPB to help them find resolution. The CFPB assists thousands of consumers each week with complaints related to financial products and services like mortgages and credit cards, serving as an intermediary between the consumer and the financial institution. All of those complaints are aggregated and published in the CFPB Consumer Complaint Database after 15 days, whether the company responds or not.
For a bank or credit union, having complaints made public can be embarrassing and may affect current and future customers with a negative brand perception in the market. As companies increasingly compete on their positive customer experience, a process for handling complaints efficiently, and in a timely manner, is a way to distinguish themselves from their competition. Completely missing a trend or pattern of related customer complaints, as evident in the recent fraud case, takes the negative impact of reputational damage to exponential levels.
However, there are some best practices companies can follow to ensure they are protecting their customer relationships by providing timely responses to customer feedback. First, close the loop on customer feedback by automating your complaints process and funneling complaints from all channels to a single system. Complaints can come from a variety of sources -- social media, phone calls, email, or even in person -- and each of these sources should be captured in one place for coordinating responses. The ability to analyze incoming complaints information is critical to determine where action is needed to improve your company’s customer experience. The ability to aggregate data and overlay analytics leads to quickly identifying the root causes of positive or negative experiences, and spotting the hidden trends that could be used to improve customer experiences.
The key takeaway for professionals responsible for handling customer complaints is to understand that while keeping customers happy can often be challenging, the feedback they provide is a treasure trove of information that can help improve their customer experience, protect their company’s reputation, and potentially be the indicator for underlining problem areas in their business. Utilizing the right tool puts that valuable information in their hands, and the ability to use it to transform customer complaints into positive differentiators in their market.
To learn more about how Respond can help with CFPB compliance, click here.
A supplier may have the most sophisticated software, the most experienced personnel, and the proper warehouse inventory to fulfill any demand. However, even with everything in order from the supplier side, without accurate and timely store inventory the risk of stock outs can be high and go unnoticed until the next cycle count at each store. Whether the supplier is maintaining its own perpetual inventory or relying on data feeds from the retailer inventory, positions can get out of balance due to several issues like shrinkage or improper receiving of shipments. In addition, inaccurate inventory means fewer sales opportunities.
Two ways to improve inventory are through statistical analysis of historic point of sale (POS) data and direct input from store personnel in the replenishment process.
Providing statistical analysis over sales can alert central and store level personnel to situations that may need to be addressed. For example, there could be a situation where systemic inventory levels are positive, but that item is not showing sales over a certain period. Simply following the numbers would mean inventory levels are maintained; however the store could almost certainly face stock-out conditions as the suggested stock level of a replenishment system may not meet the demands of the consumer. The store’s rate of sale would not be calculated correctly due to lost sales of the item being out of stock. By examining how frequently an item is sold out and how quickly it sells once it’s back on the shelves, the retailer can make a judgement call to raise inventory levels and evaluate if stores can sustain a higher sales velocity due to that increase.
Let’s look at a national bookstore. A review of sales trends may indicate that only one copy of a particular title sold in the past 10 weeks; however the system can’t calculate an appropriate stocking level due to numerous out of stock conditions. As soon as the book was back in stock, it flew off the shelf. Perhaps the title was re-issued as an anniversary edition; maybe the rights were sold to develop into a movie. More copies could have been sold, but the inventory levels did not match consumer demand. Increasing the number of books on the shelves allows the store to increase sales.
Store Personnel Input
Most vendor managed inventory (VMI) models are managed centrally with no involvement from store personnel, even though they are closest to the end product and can be the “eyes” of accuracy. In a recently developed model, store personnel are notified after the daily replenishment has run, but prior to actual orders being generated and sent to the distribution facility, as well as given access to that day’s suggested order. They have the opportunity to review the order and make adjustments to those suggestions based on their knowledge of the actual inventory at their store, while also adjusting the inventory level for future replenishments. In addition, store personnel are given a level of flexibility that allows them to add items that, based on their knowledge of local buying habits, they know can sell and increase sales at their location. Store involvement is not mandated by the process, but optional and time sensitive. If action is not taken by a certain time, then the final decision is left to the central team as it would be in a typical VMI setting.
The consumers of a general electronics store tend to vary, depending on area demographics. The suggested inventory levels may not be appropriate for all stores. Some items may not sell in certain locations, taking up valuable shelf space, while the same products may be popular elsewhere, constantly sold out because demand exceeds the maximum limits set by central office. By allowing store personnel visibility into a suggested order, the retailer can have the right inventory at the right location, minimizing the potential for overstock or out-of-stock conditions. In addition, by having access to the complete catalog, personnel can adjust the planogram for that store, maximizing sales potential.
Inventory is the one of the most significant sources of capital; you want to make sure the right inventory is in place at the right time. These two methods will allow a clearer picture of current inventory, as well as provide opportunities for additional sales.
Twist or turn it, compliance issues in global trade are a component of non-tariff barriers. With duty barriers ever decreasing, average duty rates went down from 8.55% in 2000 to 4.74% in 2014,[i] it is difficult to substantiate claims that non-tariff barriers have been put into place instead. However, the international focus on trade compliance, ranging from import facilities to export licenses for dual-use goods, has increased over the years, with more countries following the United States regarding the export compliance side and the European Union when it comes to simplified import facilitation.
A wide variety of legislation applies to the shipment of goods. An export shipment from the US going into the EU seems innocent enough, but at the very least a restricted party check has to be performed. If a dual-use item is shipped, product screening and possibly export licenses have to be applied. Shipping documents are required. Import and export declarations need to be filed. Customs value and HS codes need to be declared or identified. Not complying with these (inter-)national customs requirements results in delays at the very least to time in prison at the most, with financial penalties and export restrictions in between.
Often times, complying with customs legislation is complicated as some facets, such as license requirements, will be different based on the tradelane, and different types of licenses or compliance issues may arise based on the exact country of export and import combination.
Enforcement of export legislation has become particularly strict. A few simple rules will reduce the risks of non-compliance:
Having a compliance program in place does not ensure smooth sailing. Trade compliance is a collaborative effort, especially in the supply chain, where you are dependent on partners for certain data. Their efficiency will affect your programs. Getting your supply chain partners in sync with your compliance programs will result less issues and fewer delays, as well as faster resolution should compliance issues occur.
While it can be a challenge to get all supply chain partners on the same page, it is recommended to review opportunities for the following:
Prepare for the Unexpected
While it may be an over-used cliché, it applies to well-oiled supply and compliance chains. Run a mock audit. While not necessarily a fun exercise, it will point out the weaknesses in your compliance program. Ask your supply chain partners for support documentation on some invoices or customs values, ask a supplier for verification of an origin statement, challenge a logistic service provider with a few ‘what-if’ scenarios (‘what –if’ we have to change routing of a shipment or need to use a truck instead of a plane – will these chances affect paperwork needed and therefore our capability to be in compliance?).
In summary, it may not be as much about the risks associated with global trade management as it is about how to anticipate and deal with them. Identify the compliance requirements you are subject to, set up programs that make you compliant, and create a common understanding internally and externally about the importance of compliance. It can save you time in multiple ways: valuable time wasted in the supply chain or even time in prison.
[i] The World Bank, Tariff rate, applied, weighted mean, all products (%). http://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS
A woodsman was asked, “What would you do if you had just five minutes to chop down a tree?” He answered, “I would spend the first two and a half minutes sharpening my axe.” The first time I heard this statement, I recall thinking how profound it was. While it effectively communicates the power and importance of preparation, upon reflection I feel like the message is inherently flawed. When viewed through the lens of continuous improvement, I think about all the potential that may exist if he acted differently, if he acted intelligently.
For our purpose, let’s imagine that the woodsman not only has to chop down one tree, but an entire forest. This scenario would apply the message to many of our challenges we face today, as we are tasked with operating efficiently, making decisions, and taking action to improve our bottom line. What if the woodsman arrived at the forest with an already sharpened axe? What if he purchased a technically superior axe that only requires sharpening every 10 trees? Does his axe really require two and a half minutes of sharpening to perform better than just one and a half minutes spent in preparation, or does it really even need sharpening at all to perform adequately to cut down the same tree in the five minutes?
All good questions, but what our woodsman would really benefit from is a means of measuring actual performance to determine what provides the best relative balance of return. If our woodsman was interested in cutting down more trees in less time and doing it more consistently, it would be beneficial to know exactly how long it took him to chop down a sample of trees with his axe in its current unsharpened form as a point of reference. He could then begin sharpening his axe in incremental units and compare against past performance (rate of trees felled) to identify the point of diminishing return and act intelligently to determine and deploy the best course of action (Uptime/Downtime). Isn’t this what any business process owner really wants to know: what is really happening on the shop floor before and after a change is made?
In fact, this is what Factory MES provides. In our example, I would argue that Factory would allow our woodsman to not only see the trees before him, but to actually see the forest because of the trees by providing him a means of collecting data on each individual action. This visibility would give him the competitive advantage he would need to reach, and perhaps even surpass his goals. Armed with this information, now easily at his disposal, he could not only affect change in-shift, based on trending data, he would also know where to focus his energy to improve his performance over time. Equally as important is the visibility he would now have to determine the effectiveness of how his countermeasures are affecting current performance. In effect, using Factory-derived data, he would now act and react intelligently rather than just chopping away.
It’s this uncertainty that we all want to bring to light. We all want to do what we do more efficiently. With Factory MES, we have a powerful tool to meet the challenge as it is specifically designed to provide reliable and relevant data to give you that competitive advantage. Next week we will take a look at Dashboards, their purpose and best use in driving performance on your shop floor.
We have all heard anecdotes of the handyman whose only tool is a hammer and perhaps a roll of duct tape; some have even witnessed his work firsthand. While it may be possible to fix a leaking roof or patch a fence so equipped, I think it is apparent that the handyman will be quite limited in his scope of projects, and the quality of his work is questionable. The reality is that many businesses continue to operate like our handyman, by using the same approach and resources to tackle whatever problem arises.
Noted psychologist Abraham Maslow once said, "I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail." Now consider how you might approach individual challenges if you had at your disposal the precise tools to handle the task at hand. More importantly, imagine if you had the right tool and the expertise to wield it. Rather than seeing every problem as a nail, you would likely approach each challenge very differently, have increased energy and a renewed attitude to get the job done. Perhaps, you would even take on some of those challenges that were before so big and daunting, that these game changing improvements now become not possibilities, but reality.
In today’s business world, we are challenged to continually improve or be passed by. New methods and different, more precise ways of achieving excellence and eliminating uncertainty are now the norm. In the previous post, we touched on taking small steps and embracing a culture of experimentation as a means of driving your organization towards its targets, but what do you need to breakthrough and consistently outperform the competition?
The simple answer is that you need tools; not just a hammer and tape, but the right tools at the right time, and the knowledge of how and when to use them. What you really need is operational visibility in real-time and a means of analysis to determine the effectiveness of your actions and countermeasures. All businesses have to make real-time decisions to affect operational activity in the moment: in shift, during a product run or while getting a down-time issue resolved. In order to effectively change, set, and realize targets, you also have to reflect and determine the root causes responsible for the challenges you are facing and determine informed courses of action to close the gaps.
Not all businesses have the visibility we mentioned above, or at least not a comprehensive, consistent and immediate source of the invaluable data that Factory MES delivers. Aptean’s purpose built application is chock full of capability out of the box and configurable to fit your specific needs. Upcoming blog posts will dive into the individual tools that are built into Factory MES and those that are complimentary of its capability. Whether it be Metrics, Reporting, QA, Problem Solving, or Coaching, the intent is to help you extract the most out the Factory actionable intelligence application and equip you with the tools to excel.
Over the coming months, let’s build complete tool boxes together and load them up with proven tools made for specific applications. Let’s discuss their functionality, capacity and when they are the best tool for the task at hand. A hammer is indeed a very effective tool, but to be competitive we need the precision that job specific tools offer. So stay tuned as we open our tool boxes, put our tool belts and discuss the best tools available to us.
What a strange thing it may seem to encourage someone to think small while one is in the pursuit of excellence. It does seem counterintuitive to actually think small while our culture continually impresses upon us to do the just the opposite. However, I will lay out why it often makes sense to think differently, to think in incremental terms in order to make the right changes that move you closer to your goals.
Recently, I watched an interview with Jeff Bezos, CEO of Amazon, and what struck me was his strong belief and strategic use of experimentation across all of his organizations. He is a staunch believer that an organization must continually change in order to be excellent. Not dramatic, bet the farm types of change, but small steady steps that enable you to monitor whether the change is actually working and, if necessary, be positioned to change tack accordingly and swiftly.
These experiments are the small steady steps that many of today’s most successful companies leverage to effectively drive their change efforts. The challenge is knowing exactly what to experiment with. What are the right questions to ask? What are the correct actions to take? Luckily, there are answers to these questions if you know where to look.
It’s in the data. The Factory MES data that you collect on your operational activities is the key to informing effective real-time actions and driving successful improvement activities. Equipped with this accurate and relevant data, you are now ready to take a step or multiple forward…or simply experiment. Embracing this philosophy of experimentation has the ability to yield significant results. This mindset, coupled with structured problem solving to get to the root cause of issues and to develop, deploy, and analyze countermeasures, equips one with a strong set of tools to achieve the big things they are after.
While the reality is that occasionally these experiments do not yield the desired results, you ultimately gain the knowledge of what doesn’t work, further reducing uncertainty and leaving you one step closer to what actually does. By taking small measured steps, you steadily move forward, even with an occasional setback…indeed a continuous process towards excellence. The idea is to have your eye always on your organizational true north, to keep you aligned with your vision while climbing the ladder upward rung by rung.
In order to achieve your targets, a change from your present state must take place. The competition is changing and industries are evolving in search of more efficient and cost effective ways of getting things done. The choice is to accept the status quo and risk getting passed by, to change using risky uninformed actions based on intuition or emotion, or to take steady measured steps that are based on actual data. Think small and deliver big by using your Factory MES data to inform your actions and create a culture of success.
Essex County Council (Essex CC) is an upper tier local authority based in Chelmsford and is the main public sector body in Essex, United Kingdom. The council looks after highways, social care, infrastructure and education, amongst other responsibilities. Essex CC has been using Respond, Aptean’s Complaints and Feedback Management solution, since 2008 to manage inbound enquiries and complaints, including Local Government Ombudsman (LGO) complaints, Chief Executive correspondence, corporate and social care statutory complaints, member service enquiries (a service which is provided for County Councilors), and Freedom of Information and Environmental Impact Regulation requests.
While the initial Respond system at Essex CC was fit for purpose at the time of implementation, Essex CC realized that both its own technology and that of Respond had moved on considerably since then. The organization decided to upgrade from Respond 3 and moved to Respond 6.0.1 in April 2016 in order to take full advantage of the latest product enhancements.
“The clarity and insight we have when reporting now is so much better,” said Olivia Shaw, Customer Experience Lead at Essex County Council. “We’ve got a lot more visibility across everything, and our reporting now makes it so much easier to pick up any issues or trends.”
To learn more about how Essex CC met their tight deadline and improved their reporting, click here to read the full case study.
The Altro Group business structure consists of two divisions: Altro, a leading provider of premium flooring and wall cladding systems for construction and transport; and Autoglym, which designs and supplies a range of premium car care products such as waxes, shampoos and alloy cleaners. Over 700 employees work within the Altro Group, which is headquartered in Letchworth, Hertfordshire in the United Kingdom.
Since 2002, Altro has been using the Aptean Pivotal CRM system as a means of keeping its databases organized and allowing for maximum efficiency across the company. In May 2015, Autoglym decided to invest in a CRM system as a means of improving operational efficiency. In line with an organization-wide strategy to implement more technologies into work processes, Aptean Pivotal was specified as the solution to help with automation and coordination within Autoglym’s marketing, sales and customer care channels.
“Together with Aptean, we have open and candid conversations that have led to trusted communications. This, combined with the familiarity and confidence in the product itself, made it a natural choice for Autoglym and is what has made me into a Pivotal and Aptean advocate,” said Suzanne Symonds, CRM Analyst at Altro.
To learn more about how Autoglym aims to capitalize on the success that Altro has already experienced with Pivotal, click here to read the full case study.