Traceability essentially means having insight into the chain of events that is your business. But how to achieve it and what are the mechanisms that support it? Read more from our blog. #traceability #traceabilitysoftware #manufacturing #manufacturingsoftware #mrpsystem #mrpsoftwre #mrpeasy

1. HOW TO ACHIEVE TRACEABILITY
IN MANUFACTURING?

2. Traceability essentially means having insight into the chain of events that is your
business. But how to achieve it and what are the mechanisms that support it?

3. The journey of a product leads from the source of the raw materials all the way through the
supply chain to the end consumer. In most cases in the modern world, it takes a long time
and multiple accountable parties to get a product from the first phase to the finish.
Suppliers, component manufacturers, transporters, manufacturers, distributors, retailers – all
of these links are responsible for their own part in the chain.
Traceability gives you the chance to pinpoint the exact place where something has gone
wrong, and to organize product callbacks whenever a pervading fault in a batch is detected.
Even more importantly, having certain traceability-related policies in place could give you
the chance to avoid product non-conformity that could be traced back to your company.
What is traceability?

4. Traceability essentially means that every action and every change leaves a trail that allows us
to come back to a specific process to see what might have gone wrong. With today’s highly
regulated markets, it is an important aspect of doing business, especially in industries such
as food, healthcare, automotive, etc., where one mistake could have a large impact.
Traceability should, however, be a priority for all modern manufacturers regardless of their
industry and its specific regulations.

5. Apart from handling product non-conformity issues, traceability helps to improve the processes of
different departments of your business in the day-to-day thanks to constantly generating data
regarding the performance, costs, lead times, and other aspects of your business. In inventory
management, traceability also ensures that you know exactly where and in what quantity your
materials and goods are, and how long it would take until they expire.
In a nutshell, traceability can aid in constantly improving your production processes, customer
retention, brand image, and bottom line.

7. In manufacturing, achieving traceability requires you to keep track of all your raw materials, WIP
inventory, finished goods, workstations, factory floor and stockroom workers, and any other
parties directly handling the products at some point. This means marking your inventory and
documenting the actual production and inventory handling process.
There are two types of inventory tracking: stock lot tracking and serial number tracking. Lot
tracking usually deals with goods in bulk (i.e. process manufactured goods like food,
pharmaceuticals, fabric, etc.) while serial tracking is used when handling individual items (i.e.
discrete manufactured goods such as electronics, furniture, etc. as well as parts and components).
Whichever the case, for the tracking system to properly work, all SKUs need to be allocated
specific areas in the warehouse or stockroom, each individual item must be properly labeled, and
each stock movement needs to be recorded.
How to achieve traceability?

8. Lot number tracking
In the case of lot tracking, stock lot numbers are assigned to each batch produced or
procured that would allow tracking their origin, quantity, value, expiry dates, certificates of
conformity, and other information deemed necessary. When a part of the lot is found to be
faulty (e.g. a client says that a loaf of bread they bought at the supermarket was moldy), it
would be easy to know which batch it was from, and where other parts of the same batch
are.
For example, a batch of raw materials is procured and it is assigned a unique number L-001,
and goods are labeled accordingly.
These raw materials are used in two production runs, products from one run are assigned
the lot number L-002, and the second gets the number L-003.

9. These products may go out to hundreds of customers, and you write down exactly from
which lot the products were issued, from lot L-002 or L-003.
In case you become aware that there had been an issue with these raw materials, you have
the means to identify in which production runs these raw materials were used specifically.
And if necessary, you can identify which customers received those products, for a potential
callback. This is called forward traceability.
Alternatively, in case you receive information from your customer that there is an issue with
a product, you are able to trace back step-by-step and identify where something went
wrong – was it during shipping, in production, or something to do with raw materials. And
take action accordingly. This is called backward traceability

10. Quality inspections
Quality inspections can be performed to check the conformity to standards of your raw
materials, WIP inventory, and finished goods. This implies that definite specifications have
been set for each SKU inspected in order for the tangible item to be compared to the ideal
one.
Whether you track items by lot or serial number, the quality inspection results are stored
with the lot and/or serial number’s information.
Quality checks performed at the reception of raw materials from your suppliers may reveal
errors on their part, while quality checkpoints after certain internal processes or at the end
of the production line can point to problems in your own facility.
Few companies can, however, afford to inspect every item they receive and produce. For
that reason, it is necessary to account for the cost of quality and determine which items are
so valuable that they merit regular quality checks.

11. Shop floor control and execution reporting
Worker and workstation reports can give you invaluable insights into your processes and provide
you with the necessary paper trail that would allow you to trace back errors and inconsistencies
to specific events, people, or parts of production. With proper reporting policies in place, you can
receive accurate information about the materials consumed, the employees tasked with different
activities, equipment usage, any hiccups in the process, etc.
When you identify a certain employee as the culprit for recurring inconsistencies, you might want
to provide them with additional training or assign a senior worker to supervise and instruct them.

12. External traceability
Going further from your internal processes such as production and inventory, traceability can
also be achieved externally to a certain degree. Apart from propagating traceability policies
among your suppliers and distributors, you can also perform quality inspections directly after
receiving materials and directly prior to shipping out your finished goods. This allows you to
minimize the chance of errors on your part, and to use concrete data in order to communicate
to your partners about inconsistencies that can be attributed to them.

13. The above-mentioned prerequisites for achieving traceability might seem like a lot of work –
because they are. Organizing it all on paper or in spreadsheets is a horribly time-consuming
endeavor and that is why most small businesses opt for only doing the bare minimum in
order to not over-stretch themselves with administrative tasks. That is also why SME
manufacturers often say they do not have the resources to achieve full traceability.
Implementing a manufacturing ERP software, however, allows small manufacturers to take a
huge leap towards better transparency. Modern ERP systems are perpetual inventory
systems that track and update inventory and financial data with each movement. They allow
for stock lot or serial number tracking, expiry or best before date tracking, barcoding,
quality inspection management, and other inventory control methods, while also providing
you with the capacity to plan out and schedule production in the most efficient way
possible.
Using traceability software

14. The best solutions also provide workers with the capability to report their activities, giving
you the chance to track their work time and actions. An ERP system uses all the information
provided by different departments of your business to create meaningful statistics about
your production efficiency, equipment effectiveness, supplier performance, inventory
movements, etc. that you can use to trace back inconsistencies and to improve your
processes.

15. • Traceability means leaving a trail with each action directly related to product handling.
• It allows companies to trace inconsistencies back to specific events, employees, or parts
of the production process, to organize recalls and returns, and to continuously improve
their processes, minimizing product non-conformity altogether.
• Even though traceability is especially important in highly regulated industries, its benefits
extend to all manufacturers regardless of their specific niche.
• To achieve traceability, companies need to properly track their inventory and all actions
that are performed with it.
• Although it is a mammoth task to undertake using paper or spreadsheet based solutions,
modern traceability solutions like ERP software allow achieving traceability with much
less effort even in the most demanding environments.
Key takeaways

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