During the week of July 23, the U.S. Consumer Products Safety Commission issued recalls for over 1 million automobiles spanning 7 automakers. Earlier in the month, on July 8, the U.S. Food and Drug Administration issued a recall of batches of a critical anti-diabetes drug that had shown higher than acceptable levels of impurities.
The key question behind any recall is what caused the problem and when did the problem start. The defect may be the result of a design flaw in a product or in a manufacturing process. The problem could also lie in undetected variances during production or impure precursors or raw materials. The bottom line, however – is this. Every manufacturer wants granular track-and-trace capabilities. But how can they extend that track-and-trace into the deep production processes inside their plants – an area that has to date remained opaque?
The Critical Importance of Track-and-Trace
Manufacturing traceability has always been a critical requirement for today’s industrial businesses to reduce risks and stay competitive. A proven track and trace framework is essential, and not only in highly regulated industries such as medical, food and beverage, aerospace, defense, and automotive. Every manufacturer and brand that sells goods cares about quality control and brand reputation. Being able to track every batch and every item back to a specific production run or cycle time is the only way to guarantee that manufacturers can close the loop on quality control and respond to downstream problems in a timely fashion. For this reason, manufacturers, across all industries see track and trace as a vital tool to gain greater control over product and process quality and to respond to their customer demands.
What is Manufacturing Traceability?
Manufacturing traceability means that you know which supplier lots and or serial numbers were used in which finished products. With a lot and serial traceability system, you have a way to track and trace goods from the supplier that sent the raw material to you and you will also have a method to track finished goods through delivery to the customer. In continuous processes like chemicals, traceability means matching a batch in a can or a storage tank to a timestamp in the plant when that chemical was made.
Tracking goods once they have left the plant is relatively simple. Tracking and identifying bad batches of materials back to material suppliers is also not challenging. These are part of the digital supply chain. But the missing link – the “Heart of Darkness” in track-and-trace – is what happens during the manufacturing process. Gaining visibility into that part of the production journey remains for most manufacturers hard, time-consuming, and very resource-intensive to do on a one-off basis, let alone as a repeatable process.
Why is this difficult to do?
In modern multi-tier supply chains, hundreds or thousands of suppliers may contribute to a single product. Even identifying the full set of suppliers from the raw-material sources to a final product can require a significant time investment.
The scope and scale of risks are intimidating. The probability and severity of many risks are difficult to ascertain and therefore difficult to address, quantify, and mitigate. And proprietary data restrictions impede progress. In complex products, Tier 1 or 2 suppliers may consider their supply chains to be proprietary, limiting visibility at the purchaser or integrating-manufacturer level. This is why it’s so important to know not just your supplier but your supplier’s suppliers, too.
Nine Big Risks Of Not Doing Track-and-Trace Properly
By now it should be pretty clear that track-and-trace is hard. But that doesn’t mean you shouldn’t do it. Let’s break down all the risks that a company faces when they are unable to properly track-and-trace products or batches through the entire manufacturing process. There are two specific buckets – manufacturing productivity risks and business risks. One category impacts production, the other is about how track-and-trace failures can hurt your sales, reputation, and profits. Note that this is not an exhaustive list.
Manufacturing Productivity Risks
Three of the biggest manufacturing productivity risks include:
- Process disruption, equipment or execution failure resulting in shutdowns
- Poor quality control and excessive scrap and rework
- Failure to meet schedule, inability to accurately plan
Five of the biggest business risks include:
- Failure to meet regulatory, environmental or stated quality standards
- Balance sheet risks arising from unforeseen or hard to diagnose production problems
- Over or under-producing product
- Inaccurate forecasting
- Poor decision making on personnel, plant, and equipment, and raw materials
- Poor quality control resulting in upset customers
Doing Track-and-Trace Right Creates New Opportunities for Productivity
Putting in place a robust IIoT capability that digitizes track-and-trace throughout the production process generates key benefits and outcomes beyond visibility and quality control in the following areas:
Compliance – The costs of compliance continue to escalate in manufacturing. Track-and-trace techniques can help to reduce these costs by enabling more consistent compliance, reducing cost and the expense, impact, and risk of product recalls by having accurate genealogies of each product available in real-time
Supply Chain – Smart track-and-trace strategies improve supply chain, in-plant and fulfillment efficiency by making it easier to see what’s moving through the supply chain and to understand historical supply chain patterns, right up to the factory door. Supply chain optimization and track-and-trace are complementary goals.
Planning – Well-designed track-and-trace can Increase inventory accuracy and forecasting. This enables production planning to optimize manufacturing schedules better. Knowing inventory levels throughout supply chains and all the way through the production process makes inventory planning and management more efficient for each production center. Over time, track-and-trace systems can capture patterns, making it possible to anticipate shifts in demand. This insight contributes to greater forecast accuracy and the potential to optimize manufacturing schedules
Productivity – Perhaps most importantly, track and trace that illuminates what’s happening in production and relating that to upstream and downstream inputs and impacts can Increase machine and tool capacity utilization and contribute to improved Overall Equipment Effectiveness (OEE),. This leads to reduced scrap and rework, and improved manufacturing efficiency by making quality and traceability data available at all production locations. Additionally, if order accuracy can be addressed as part of a holistic supply chain strategy, the delivery of high-quality products on time to your customers will enhance brand, reputation, and loyalty, ultimately boosting sales and profits.
Conclusion: Track-and-Trace is Now Mandatory. It Is Also Good For Business.
The COVID Pandemic has accelerated movement towards digitization of manufacturing. Every major manufacturer needs remote monitoring to keep their plant running even during lockdowns. Remote manufacturing monitoring is just another flavor of track-and-trace. Simultaneously, the need to implement traceability measures for the entire manufacturing process has been underscored by the chaos that ensued around purchasing PPE and medical supplies during the virus – and the massive quality control and misrepresentation issues that surfaced. Other signs of the rise of track-and-trace include more stringent FDA regulations and even private sector awareness by Amazon that dangerous counterfeit products sold on their platform are a growing problem.
This drive for transparency also means that the data behind manufacturing processes will become more available and analyzable. This is an unalloyed good for companies that make things. By illuminating the production processes as part of track-and-trace technology implementation, manufacturers will tackle their risks but also access the real benefits. This means their products will be higher quality and customers will be happier and safer.