How ERP Can Optimize Your Business' Batch Management
Running a business requires a lot of supervision. This is particularly true when you work with time-sensitive products such as food items, beverages, or pharmaceuticals. As with anything that humans ingest, you must be mindful of freshness and expiration dates, amongst many other factors. Batch management has been around for many years but, as production increases, so does the potential for human error. Using an ERP software for lot management maximizes your business’ control over day-to-day operations while allowing you to plan ahead efficiently.
Remember the 1997 Shiraz? It was particularly tasty, and the vineyard is proud of that specific lot. The same may not be true for the following year's batch, which may have suffered from bad weather and turned sour. Batch management is a well-established practice found everywhere: it’s how industries track the variables that come with their production process.
In the food processing and pharmaceutical industries, this data is tightly controlled. So much so that strategies are needed to ensure batch quality throughout the production chain.
What are batches and why manage them?
All products and ingredients that pass through your plant are associated with a lot of "batch" thanks to a specific identifier originating from your company's inventory system. Using this method caters to multiple objectives: ensuring the traceability of your items and products, their quality, and your operational efficiency by helping you determine exactly what is produced at your plant and what protocol is used to produce them.
Looking at the basics, batches are homogeneous units with unique recipes or dimensions. Since these can relate to ingredients and finished products, batch management is potentially involved during all production stages - from purchasing required raw materials to the final product you are putting on the market. Implementing such a strategy aims at making the best use of your supplies, minimizing losses and optimizing the manufacturing process.
Needless to say, this might significantly impact the growth of your food, beverage or pharmaceutical business. That is why it’s important to seek help when it comes to finding the right batch management system for your specific needs.
How can batch management help your company?
By helping you get the most out of your ingredients or components. Adopting standardized procedures will ensure that your batches meet your specifications in terms of quantity, temperature, or time spent at each stage of your production line. While it will prevent you from throwing away lots due to contamination or poor preservation, making optimal use of materials and equipment will allow you, in turn, to act with greater flexibility when the aforementioned situation arises.
Other benefits of adopting a batch management strategy are leaner processes and reduced waste. Here are two of the main batch determination methods:
- First In, First Out (FIFO) is the most basic batch determination system. It’s a simple rotation of putting the newest product at the back of the shelf. This method is generally the least risky regarding expiration dates and shipping perishable goods.
- The First Expired, First Out (FEFO) system prioritizes the expiration date as a criterion for use or delivery. This may be useful when you receive a batch that is closer to the expiration date than a previously received batch.
In both cases, alignment with one of the above strategies will allow you to reduce the unnecessary loss of items, optimize your stocks and grow your profits.
Furthermore, optimizing your inventory will also facilitate the traceability of your products while enhancing your product recall procedures.
Batch management is also useful to guarantee your "shelf life" days. Whether you sell pharmaceuticals or food products, the distributors you work with may require you to deliver goods with a minimum shelf-life duration. Grocery stores such as Costco have such policies in place to reduce waste on perishable products. Managing your batches properly will allow you to ensure that their shelf life is superior to what the distributor requires, as they might otherwise reject them.
Why is ERP your best ally when dealing with batch management?
If you’re ready to get into batch management, you probably already know that ensuring quality control, storage and preservation conditions are all steps that require due diligence and attention to detail.
You can consider assigning these steps to your employees but be aware that it’s extremely complicated to carry them out manually using Excel files - even with a specialized team: the risk of human error is high and will increase as your company grows. These tasks are also time-consuming or may require a lot of human resources based on the scope of activities.
Keep in mind that automating your processes is a transformative step that will help you succeed in managing your batches and growing your business efficiently in the long run. To carry out this digital transition and take your company to the next level, ERP software is your best ally. Here’s why:
1. ERP allows real-time tracking
ERP software assists you in all necessary processes allowing for the smooth running of your operations through an integrated system. With the help of tablets or monitors installed at key points in your plant, an ERP software specifically designed for the food, beverage, or pharmaceutical industry may integrate directly with your existing machinery.
Because this tool allows data collection related to your operations centralized with automatic updates, you can easily access information originating from batch quality control, or their various statuses. It not only helps you track your expiration dates but also gives you an overall view of your stock levels at any given time.
Real-time tracking also allows you to easily identify defective items, whether they are finished products or ingredients. Thanks to an overview of the batch's complete history, you can see when and where a specific ingredient was used, as you can track every transaction with your suppliers and distributors associated with this ingredient. This overview of all batch movements, from reception to retail, makes it much easier for you to deal with a product recall if / when it occurs.
2. ERP allows multiple location tracking
Using an ERP not only lets you know what is happening at any given time, but also where it is happening. You can track your product movements, whether they’re in separate boxes within a single lot or in multiple locations.
More specifically, you can identify in which part of a warehouse the batches are located and in what quantity you may find them.
3. ERP allows status tracking
ERP technology also provides you with accurate information regarding your batches' availability, whether they’re still in the production process or unavailable due to quality control or quarantine flag.
Status changes can be easily tracked: a batch of vaccines can be released from quarantine and returned to it the next day if an irregularity is found.
Information provided by the ERP is also precise: if a lot meets several status criteria, the software will report it. Similarly, ERPs may allow you to maintain a batch partially without isolating it completely: if a fraction of the lot has to be quarantined for quality reasons, the unaffected portion can still move forward.
4. ERP enhances internal communication
Lastly, Enterprise Resource Planning software is a wonderful tool for sharing information. It makes it very easy to notify all relevant departments that a batch is excluded from the available stocks, minimizing the potential for miscommunication or oversight.
Adopting a batch management strategy is critical to the success of a growing business. To achieve your goals, equip yourself with the right tools. By embarking on the ERP experience with software designed specifically for your industry, you will gain control over your supply chain and inventory, deal more promptly with any recalls and defects, and achieve clearer profit margins for your business.