Food & Beverage Training. Prepared for Winn Technology. October 24, 2008. Scott Pugmire Sr. Vertical Industry Manager. Purpose of this Presentation.
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Food & Beverage Training Prepared for Winn Technology October 24, 2008 • Scott Pugmire • Sr. Vertical Industry Manager
Purpose of this Presentation • To learn how to gather information from a food or beverage (F&B) manufacturer, distributor, or service company in order for the next step in the sales cycle to be well prepared (i.e. Sage lead distribution, partner follow-up) • Understand their pains for ROI • Have them feel comfortable that you understand what they do
Key Concepts • Process Manufacturing – blending of ingredients “goop” vs. assembly of “widgets” (aka discrete manufacturing) • F&B manufacturing has complex requirements and they are getting more complex every day. • Complex requirements require complex and flexible solutions. • Very few ERP solutions for the SMB market fulfill the requirements of F&B manufacturers. Many F&B manufacturers are on “home-grown” applications.
Food & Beverage Issues • Regulatory / Food Safety • Bioterrorism Act • HACCP • ISO 22000 • cGMP • Kosher / Halal standards
Food & Beverage Issues • Process manufacturing capability is essential for manufacturers where formulas and recipes replace bills of materials and inconsistent raw products must be converted into consistent quality output • Recipe Management • Quality Control • Catch Weight Management - parallel inventory accounting of varying weights from piece to piece, either due to biological variations or because of weight loss during storage • Strict federal regulatory requirements must be adhered to by both manufacturers and distributors. • Inventory Management. • Vendor/ Raw Item Traceability. • Product Labeling Requirements • Bio-Terrorism Act Compliance • Special inventory handling via refrigerated or other means applied to warehousing and logistics to compensate for inventory shelf life limitations
What you may not have heard… • LiveSmart Weight Management Chicken and Brown Rice Recall(April 20, 2007) • FDA Seizes All Medical Products From N.J. Device Manufacturer for Significant Manufacturing Violations(April 17, 2007) • Harry & David Expands Its Nationwide Allergy Alert for Undeclared Nut Allergens in Candies(April 13, 2007) • Menu Foods Voluntarily Recalls Additional Pet Food made with ChemNutra Wheat Gluten(April 10, 2007) • ChemNutra Announces Nationwide Wheat Gluten Recall(April 3, 2007)
Food & Beverage Issues - General • Expiration/freshness dates of ingredients and finished goods • Dynamic / fast-paced manufacturing environments • Material handling can be very manual • Ingredients can have varying attributes from lot to lot in some industries • Rebate and promotion programs for distributors • Quality control is very important • Production scheduling by attribute (i.e. allergen, color, etc)
Food & Beverage Opportunities • Expiration/freshness – Do you think F&B mfg is going overseas? I doubt it • Dynamic / fast-paced – They need an ERP designed specifically for them; work arounds in a discrete system don’t work. • Manual material handling – O2 Warehouse automation was made with Smart- CodeTM Technology. • Varying attributes – O2 lot attribute functionality • Rebate and promotion – EVS and Nextec to deliver solution soon • Quality control – O2 has a robust, integrated QC module
The Marketing “Silver Bullet” • Unfortunately there isn’t one! • Understand the industry: • Needs by sub-vertical • The solution that O2 provides • Persistence – don’t quit • EVS is working for you: • Success stories • Features / functionality • Complimentary products • “National View” of requirements
Must Read List • http://www.praxiom.com/22000.htm - ISO 22000 • http://www.expeditors.com/Services/FDABio.asp - Bioterrorism Act • http://www.cfsan.fda.gov/~dms/alrgact.html - Food Allergen Labeling and Consumer Protection Act • http://www.foodquality.com/mag/03222005/fq_03222006_IL2.html
Key Concepts • An ERP that works the way they do. Round peg – Round hole • Split Bill of Materials – Separating Goop from packaging • Fully integrating all departments – typically QC (quality control) and formula management are left out.
F & B: 5 Leading Questions • How do you determine what to make and when to make it? • How do you manage recipes/formulas? • Tell me about your manufacturing process • Describe your quality control processes • Describe your regulatory requirements
F&B: Question 1 Drill-Down How do you determine what to make and when to make it? • What to make = how is demand determined… • sales forecast, open orders, transfers to other locations • When to make = how do they plan production; • MRP, infinite scheduling; finite scheduling, scheduling based on attributes (allergen, color, type, etc.). • Do they have to manage expiration dates • When they make a batch, do they have multiple finished goods? Co-products and by-products – explain the concept of split BOM • Schedule by the formula, multiple finished goods can be produced
F&B: Question 2 Drill-Down How do you manage recipes/formulas? • Most SMB-sized companies keep formulas in Excel • Issues: • Security; loss, backup, and theft • Costing – how do they know how much the formula will cost? • What happens when they want to substitute an ingredient in all formulas • How do you indicate what QC tests to take on the formula • How do you keep revision history of changes
F&B: Question 3 Drill-Down Tell me about your overall manufacturing processes that you haven’t covered already • Should uncover any specific or peculiar techniques that they employ to transform raw goods into finished product. • May uncover some potential pain points in their processes • May be able to determine if there is something special that they do that their competitors don’t. (These will be critical factors to include in the partner’s final solution offering)
F&B: Question 4 Drill-Down Describe your quality control processes • Incoming materials • Manufactured materials • How to determine what to test • What test to do • Outside process (micro testing) • HACCP Procedures(pronounced “hassip”) • Metal detector • ISO 22000
F&B: Question 5 Drill-Down Describe your regulatory requirements • Describe your procedures to be compliant with the Bioterrorism Act • Do you have to produce nutritional labels for your products? If so, how do you currently do that? • If they deal with allergens, how do they manage allergens and avoid cross contamination of products?
Thank You Q & A