Manufacturing Intelligence for Intelligent Manufacturing™

November 13, 2013

A Conversation:

EMI & Traceability –

Maintaining Quality, Safety

and Compliance

Dave Miller President

Mobia Solutions

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.

The Five Core Functions of EMI

Data Integration and Aggregation

Data Contextualization and Modeling

Analysis

Visualization and Reporting

Propagation

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.

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

• 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.

End result:

• better controls,

• lower costs,

• improved bottom lines,

• complete traceability.

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.

Traceability

• Legal

• Commercial

• Moral

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.

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.

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?

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.

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.

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.

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

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.

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?

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.

EMI & Traceability

• Supplier management

• Logistics & warehousing

• Manufacturing

• Product recall management

Manufacturing Intelligence for Intelligent Manufacturing.™

Questions?

Dave Miller Mobia Solutions

(864) 881-1505

davemiller@mobiasolutions.com

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