CAT newsletter

Software Tools for the Food Industry

An eNewsletter for Food Processors

May 2004 • Quarterly Edition • US Food Processors

In This Issue:

Business Intelligence: Enhancing your Corporate IQ

Bioterrorism Act: Are you prepared?

Ask the Expert: RFID tags

Contact Us

Business Intelligence Tools

Enhancing your Corporate IQ

Want a Powerful way but simple way to publish forecasts, budgets, and analytical reports? Congratulations, your job just got easier.

You’ve tried using spreadsheets for costing, budgeting, planning and reporting, but you and your business teams are not getting hold of strategic information in a timely way. Everyone is probably frustrated because of all the limitations in spreadsheet-based planningg:

You can’t make frequent changes to data, easily redo the budget, or perform what-if questions against the loosely connected sheets.
Data is only two-dimensional in rows and columns. You have to link or connect spreadsheets to add other dimensions. This demands time and can cause errors.
Spreadsheets were designed as a standalone tool, so sheets are difficult to share. To share information, each person on your team has to send the files to others.
Business rules and models can be buried in your spreadsheets, causing more inconsistency.

You may even be trying to use your ERP system or a legacy system for budgeting and planning, but it’s too complicated and not intended for these activities.

If you’ve run up against these obstacles, it’s time to consider extending the power of spreadsheets with TM1. For business intelligence and business performance management, TM1 is the only read/write software for planning, forecasting, reporting and strategic business analysis that transforms scattered spreadsheets and transactional data into an auditable, single version of the truth in a
proper database.

The TM1 planning budgeting and planning software provides you with a seamless interface to spreadsheets for real-time planning and analytics. Because TM1 has one of the richest spreadsheet clients in the industry, your team can be up and working quickly and painlessly.

Take a look at just a few of the ways TM1 can be applied to your business:

Product profitability(using Activity Based Costing techniques)
Business Activity Monitoring
Production planning
Customer Profitability
Production scheduling and many more

Let's take a look at a few of the items listed above.

Product profitability

While most manufacturers work to contain cost or have a true understanding of them- manufacturers in the food and beverage industry are particularly challenged. The ability to control costs for manufacturing food is impacted by fluctuating prices for prices such as dairy, eggs or produce. The TM1 application for "what if" scenarios to understand product costs with many product variables as well if viewing the financial impacts of its production schedule 3 to 6 months out.

The secret to true costing resides in full absorption costing of actual costs and veer away from standard costing and use a top-down perspective of cost allocation. Once an understanding of true costs is formed, various costing scenarios (“what-ifs) can be analyzed to power performance management policies.

Business Activity Monitoring

Monitoring business activities is not a new concept but the movement towards the centralization of financial, operational and other managerial monitoring is. The movement becomes justified from the
need to access information from various business processes from a single source system, often from a company dashboard.

For instance management may be interested in slicing and dicing the product profitability information to make an informed decision about discontinuing a line or expanding the product, or operational personnel may be interested in keeping an eye on key performance/process indicators.

TM1 acts as a highly compatible multidimensional database to source information commonly accessible through a company dashboard.

Production Planning

Operational systems and costing solutions typically contain bill of activity (machine and labor) information to produce components or final products necessary for the production planning process. Combining this information with recipe and other bill of material requirements to meet production levels, a model may be constructed to produce material, machine and labor requirement summaries for a given level indicated production. The indicated level of production is typically driven by product demand from purchase orders or even forecasted sales volumes. TM1’s incredible modeling capability facilitates the fast deployment of production planning models, customized for the client.

Production Scheduling

Using production plans, and plant production throughput constraints, production schedules are typically manually worked out and actioned. TM1 can be used to minimize time spent preparing production schedules and allow its users to focus on streamlining processes and other dependencies. TM1 uses production plans determined by itself or external sources in conjunction with the facility specific process parameters to schedule production.

TM1 vendors

CAT2 now offers our clientele an entire suite of software geared to your financial needs in the food industry, to complement our current suite of MES software geared to the production floor.

Plant floor applications married with the power of business intelligence tools will provide your company an enormous competitive advantage.

For more information or a demonstration of our business intelligence suite contact us today at 501-328-9178.

The Bioterrorism Act

Is your company meeting requirements?

Under the recordkeeping provision of the Bioterrorism Act, FDA will require food processors and transporters to maintain records that allow the agency to trace products up and down the chain of distribution and to inspect those records. This authority gives FDA an essential tool to trace tainted food back through the chain of distribution, to help identify the source of illness outbreaks and more effectively implement a product recall.

Consumer anxiety in the event of a bioterrorist attack against the food supply will be minimized by good tracing mechanisms that remove tainted food from supermarket shelves as quickly as possible. Recently, Congress required USDA to develop a plan for country-of-origin labeling requirement for most imported foods, but more specific labeling (tracing all foods back to the processing plant or even the farm) would allow for faster recalls while minimizing the business disruption for other similar products.

What Records Must Be Maintained?
“Nontransporters” (i.e., persons who own food or who hold, process, pack, import, receive, or distribute food for purposes other than transportation) would be required to maintain the following records:

Records sufficient to identify the immediate nontransporter previous source (i.e., the last nontransporter to have the food before you), foreign or domestic, and the transporter of all foods received, including the following items of information:
The name of the firm and of the responsible individual, address, telephone number, and (if available) fax number and E-mail address of the nontransporter immediate previous source, whether domestic or foreign
An adequate description of the type of food, including brand name and specific variety (e.g., brand X cheddar cheese)
The date the food was received
The lot number or other identifier of the food (to the extent such information exists)
The quantity of food and how it is packaged (e.g., 25 lb carton)
The name of the firm and of the responsible individual, address, telephone number, and (if available) fax number and E-mail address of the transporters who transported the food to you.

These records must include information “reasonably available to you to identify the specific source of each ingredient that was used to make every lot of finished product.” FDA is aware that some food processors commonly commingle raw ingredients, such as flour, from a number of suppliers, making it difficult or impossible to identify a specific source of raw materials to a specific finished product. FDA does not intend to require that processors reconfigure their operations or use dedicated storage facilities. However, the proposed rule would require processors “to capture the information that is reasonably available to you to connect finished products with the immediate previous source of each of the food products used to make that finished product.” FDA realizes that, in some cases, processors may be able to do no more than narrow down the number of potential sources and may not be able to identify one specific source.

What does this mean for you as a processor?

Processors not having good data collections systems in their plant will have a hard time proving they are meeting requirements if recalls DO occur. Plus, security features should be documented to prove who has come in contact with the product to prevent any potential terrorism tampering.

Want an easy solution?

The entire suite of CAT2 software comes equipped with security levels for different personnel of the plant, including employee picture ids and scanning of employee badges. Audit trails are available to document any changes made to processes and who made them. More importantly, our software provides traceability by raw materials or by final product.

Besides meeting bioterrorism requirements, our suite of software tools offers crucial plant production information necessary to improve yields, product consistency, cutting costs and improving efficiency.

For more detailed analysis of how to meet the bioterrorist act or other plant manufacturing issues, contact our team at CAT2.

Ask the Expert

Our team at CAT has many years of experience in the food processing industry. Please submit your questions concerning plant issues, processing problems, etc.

Question: Are your systems compatible with RFID tags?
Answer: Yes. RFID tags are currently being used to meet some vendor requirements such as Wal-Mart. Our systems already provide traceability, so the RFID tags are simply incorporated into our system, along with barcoding. Additional hardware is required such as bar code scanners or readers.

Please submit future newsletter questions to: newsletter@catsquared.com