Keeping the recall from the door is the task that never ends. It depends on a suspenders and belt strategy that prevents noncompliant production with systems in place to reconstruct events if something goes wrong. While the most dramatic headlines often come from the FDA regulated industries of pharmaceutical and food, recalls are not good for anyone. All manufacturers face recall challenges from regulators, supply agreements and class action lawsuits. The value chain of raw materials-to-process-to-finished goods-to-customer needs the combined attention of Enterprise Manufacturing Intelligence (EMI) and traceability systems to maintain quality, safety and compliance. During recalls both quality and genealogy systems are critical to characterizing the problem and untangling the mess. What is at stake? • In 2012 the FDA had 4,075 recall events (life sciences and food combined). • In an Ernst & Young study, 77% of respondents estimated an average impact $30,000,000 per incident. 23% of respondents cited even higher costs. • The cost of poor quality (COPQ) is estimated at 30% of gross pharmaceutical sales. An integrated IT strategy is critical to combat these challenges. This coordinates existing systems including ERP, WMS, MES, quality management, and traceability. The traceability and process performance data collected directly impact: • Supplier management • Logistics & warehousing • Manufacturing • Product recall management The complimentary roles of EMI and traceability in regulated industry production and supply chains will be the topic of a web conversation with David Miller, President of Mobia Solutions and one of the industry’s leading experts in technology, inventory management and traceability. The complimentary webinar EMI & Traceability –Maintaining quality, safety and compliance is available at: - http://www.nwasoft.com/resources/webinars/emi-traceability-maintaining-quality-safety-and-compliance

1. A Conversation:
EMI & Traceability –
Maintaining Quality, Safety
and Compliance
November 13, 2013
Manufacturing Intelligence for Intelligent Manufacturing™

2. Dave Miller
President
Mobia Solutions

3. What is at Stake?
• In 2012 the FDA had 4,075 recall events.
• $30,000,000 pharmaceuticals (Ernst & Young).
• $10,000,000 - Food & CPG (Deloitte)
• The cost of poor quality (COPQ) is estimated at
30% of gross pharmaceutical sales.

4. The Five Core Functions of EMI
Data Integration and Aggregation
Data Contextualization and Modeling
Analysis
Visualization and Reporting
Propagation

5. Traceability
• Tracking from any point to every point
within facility & supply chain, e.g.
– Given any raw material lot #, determine all
shipments of final product in contact with
suspect lot.
– Given any finished good lot, determine all raw
material lots involved, vendor, vendor lot #,
delivery time, date, and carrier.

6. EMI & Traceability
More to this marriage than meets the eye...and the
bottom line
If opposites attract - enterprise manufacturing intelligence
(EMI) and traceability would seem to made for each other
• EMI adds value on a regular basis , traceability is USUALLY only of
value when something goes wrong,
• EMI focuses on processes at the item level, traceability is lot level,
• EMI is optional - traceability is a legal, commercial, and moral
requirement

7. • EMI is optional but adds to the bottom line
and traceability is mandatory but is always
a cost.
• By implementing the two together, we can
increase the return of EMI by more than
enough to cover the expense of a
traceability system.

8. End result:
• better controls,
• lower costs,
• improved bottom lines,
• complete traceability.

9. Background
“Traceability”
is a nebulous term -
What we are referring to is complete ‘from any point to every
point’ within the borders of the facility. In other words:
•
given any raw material lot #, determine all the shipments
(items, finished goods lots and customers) of the final product
that came in contact with the suspect lot,
• given and finished good lot, determine all the raw material lots
that were involved in that production, who the raw material
lots came from, the vendor’s lot numbers, and the delivery
time, date and carrier.

10. Traceability
• Legal
• Commercial
• Moral

11. What are your chances of needing to
‘prove’ traceability?
• In 2013 - 4,075 FDA driven recall events.
This is dwarfed by customer driven tests (mock recalls) .
• Where the same product is produced by more than one
manufacturer - a problem for one manufacturer is a problem
for all manufacturers unless they all have good traceability.
• As the scallion industry learned the hard way, your industry
does not even need to be involved in the contamination to be
the focus of a recall.
• Add the those three together and you soon realize that if you
are thinking of traceability as being as ‘optional’ as insurance,
consider that insurance is only needed if your business has a
problem. Traceability is necessary if anyone, anywhere, in
any linked supply chain has a problem.

12. Case Against Traceability
Most manufacturers see traceability, like
insurance, as a cost without benefit,
...until it’s needed.
• Cost to purchase a system.
• Costs to maintain and run.

13. Case Against Paper-based Traceability
• The major impediment to paper based traceability is ‘efficacy’ Paper based systems are too time consuming and have an
extremely high error rate.
• According to several governmental and private sector studies manually searching paper documents for an item is only 40 to 60%
effective.
• If only three entities in the supply chain have paper based systems
we could be down to 21% effectiveness (60% x 60% x 60%).
• Hand written text is even more likely to induce errors.
• While most laws do not dictate technology - they do dictate efficacy
- do these numbers sound ‘reliable’ to you?

14. Some Good News
• Electronic traceability systems can be far easier and less
expensive to purchase and operate than expected:
– Starting at under $200 per “barcode scanner - data collection
terminal”,
– Starting at $5 a month per tracking station/user,
– Minutes to setup a basic system.
• Linking production history and quality data in a manufacturing
information system with the lot history information of a
traceability system - throw in some costing and the resulting
amalgamated information can be used to create a second to
none road map of best practices. For instance:
– which lot properties determine yield,
– what properties determine quality,
– what properties ranges are acceptable.

15. Linking EMI, Accounting & Traceability
• Imagine a very simple cake manufacturer
that buys flour, milk, eggs and yeast.
• We will concentrate on just the milk
ingredient and just the fat % property.

16. Assumptions
• The purchasing spec requires 0.75% to 1.5%
milk fat,
• We record the actual delivered percentages
of fat for each lot in EMI,
• We know the cost of the purchased lot,
• We record the milk lots used in each cake run
in the traceability system,
• Each traceability recording is time stamped,
• Oven speeds, temperature setting, etc. are
recorded in the EMI.

17. Assumptions
• We score the finished cake runs according
to quality and have ‘actual costs’.
• There is variance in one or more of the
following:
– fat %
– quantity of milk actually used vs. recipe
– oven values
– run sizes
– personnel

18. EMI can help us link the process and
quantity focused data of the process
systems with the lot focused data of
the traceability system and use the
commonality of time stamps to link
the data together.

19. Each run helps us zoom in on the optimums, including:
• BEST percentages of milk fat
– does the higher percentage, which increases cost, increase yield
or quality?
– does using more or less than the recipe standard quantity affect
quality or yield?
– how far can we lower each before we affect quality or yield?
• BEST oven conditions
– does the temperature at the 2nd stage burner alter results ?
– can we speed the oven up - or do we need to slow it down?
– what are our true min and max conditions?
• BEST operators
– is there one group that gets better yield or quality?
– does one get more done and does it affect yield or quality?

20. Conclusion
The marriage of manufacturing intelligence, and traceability
has become less of something you have to justify doing and
much more of something you have to justify not doing.
There is a much higher likelihood that you will need good
‘from any point to every point’ traceability” than good
insurance - and the stakes are higher.
If you don’t have EMI - you are leaving a lot on the table
and you will never truly know how efficient you are
compared to optimums because you can only guess at
optimums.

21. EMI & Traceability
•
•
•
•
Supplier management
Logistics & warehousing
Manufacturing
Product recall management

22. Questions?
Manufacturing Intelligence for
Intelligent Manufacturing.™

23. View Recorded Webinar
Dave Miller
Mobia Solutions
(864) 881-1505
davemiller@mobiasolutions.com