Enterprise resource planning (ERP) systems have the potential to collect an immense amount of data about the sourcing, manufacturing and distribution of products and their components. This abundance of data is often at the heart of the problem: too much data and not enough intelligence. Instead of providing increased visibility and control, many ERP systems require decision makers to navigate a sea of extraneous facts to uncover truly relevant business information.

ERP Software

Is Your ERP System Recall Ready? (Part 2)

What managers and executives need is the ability to take all that raw data and convert it into easily accessible and understandable information so they have the knowledge to quickly make the right decisions and rapidly respond to market events, such as product recalls. To enable managers and executives to make faster, more effective decisions, companies should consider a solution that provides:

Integrated lot tracking capabilities across critical business functions such as accounting, inventory, purchasing and sales; and comprehensive warehouse management functionality, including radio frequency identification (RFID), bar coding, high-quality scan-able labels, quality management and electronic data interchange (EDI).

One of the biggest risks in a product’s lifecycle often lies in the ability to move the product or its components safely from one place to another. While your product or its ingredients are in transit, they most likely are out of your possession. In fact, the responsibility for your product’s safe-keeping may be outside of your hands during the majority of your product’s life.

Regardless whether your company makes seat belts or sandwich meat, the mere act of moving your product from your company to the customer places the product at risk of contamination and defect that may well be outside of your control. The transport of the necessary ingredients or components coming into your company also opens your product to potential threats.

Certain legislation could expose your company to liability. For instance, the Public Health and Bioterrorism Preparedness Act (Bioterrorism Act) views all people and parties in contact with a particular product as either a “Transporter” (someone who physically moves the product or the components used to make the product between locations), and “Non-Transporters” (someone who owns, holds, manufactures, processes, packs, imports, receives or distributes the product but does not move it to another location).

With that distinction, the Bioterrorism Act describes two different types of parties, the Immediate Previous Source (IPS) who is the party last in possession of the transported goods and the Immediate Subsequent Recipient (ISR), the party that will next receive the transported goods. This helps determine all of the different parties that can come in contact with not only your product, but also its ingredients.

Consider the manufacturing of something like a loaf of bread. Before you even acquire the ingredients, they have been transported to you through the hands of other parties. Already you’ve brought into your factory elements of risk, in that you have no absolute guarantee that there is nothing wrong with the ingredients that could require you to recall the eventual loaves. Once baked, the bread may pass through one, two or more transporters before it arrives in the hands of the retailer or consumer.

The more information that your company gathers about the parties in contact with your goods, the better it will be for all. One mishap, accidental or otherwise, could jeopardize your product, your reputation and your company.

Continued in Part 3