Manual lot tracing makes it challenging to manage inventory effectively. Numbers are prone to misreading or incorrect recording, resulting in traceability issues down the line. And if a plant is subject to a recall or food safety audit, it can be tedious and time-consuming to hunt down handwritten information that may or may not be accurate.
To respond rapidly to these critical situations, it’s becoming more necessary for food processors to upgrade to a fully electronic inventory management system. To learn about the benefits of such a system, we interviewed Sean Clemmons, CEO of ParityFactory.
ParityFactory has been helping food and beverage manufacturers improve their operations for over 30 years. About five years ago, the company launched automated inventory management software and digital lot tracing tools. The software is designed specifically for food processors and manufacturers to record, track, and report on inventory-related data. It integrates with existing factory technology and is ready to use in Internet of Things (IoT) networks.
Clemmons has a background in business processes and business intelligence, and when he and his partners acquired ParityFactory back in January, they specifically focused on advancing the company’s inventory technology. “Our passion is food safety and seeing our customers grow,” Clemmons says. “What we really care about is helping them grow their businesses by getting off manual and error-prone processes and into barcode scanning and tracking.”
Improving accuracy by reducing human error
“Over 70% of all food manufacturers are doing their lot tracing manually,” Clemmons says. “47% still use pencil and paper.” He adds that larger companies with a long history in the business seem more likely to stick to manual processes, sometimes despite being the ones who’d benefit most from modernizing.
The problem is that it’s impossible to ensure accuracy if you’re typing data into a spreadsheet or writing on a piece of paper. People make errors, sometimes critical ones with real and direct costs. Barcode scanners, on the other hand, don’t make mistakes. “The scanners in our system prevent people from certain mistakes,” Clemmons says, “like shipping goods to the wrong customer, mixing organic and inorganic, etc.”
Another area where manual inventory errors occur is order picking. “Someone could be looking for Grade A fruit for 20 minutes and only find Grade B,” Clemmons describes. “So they just ship Grade B, and then the inventory is inaccurate until they do a cycle count.” With an inventory system like ParityFactory’s, however, all items are scanned into their specific locations. So you know not only how many products are available, but exactly where they are in the facility.
“Our software makes inventories over 99% accurate,” Clemmons says. “So it reduces how often you have to do manual cycle counts and manual inventory checks to once a quarter or twice a year.”
Preparing for FSMA requirements
Taking steps toward automated inventory is particularly valuable as food companies build their required FSMA food safety plans and complete mock recalls.
Ideally, plants should be able to provide traceability data within four hours. “Depending on the food, specific governing bodies, and client requirements, that means they typically have four hours to identify where that ingredient came from, where it is in the warehouse, what products it went into, and who they sold those products to. The idea is that you'll have a full chain from front to back.”
For some food manufacturers — like those selling to big box stores like Costco, Sam's Club, and Walmart — the stakes are even higher. They need to be able to locate the necessary information in just two hours, a feat that’s nearly impossible if your system consists of paper records in filing cabinets. But with everything automated, ParityFactory’s software can do all of the work in just minutes.
Integrating with existing software and operations
Most companies are already using enterprise resource planning (ERP) software, but that system can’t provide a complete picture of operations without some help. ParityFactory helps here as well, adding digital lot tracing and barcoding technology to connect ERP systems with what’s happening on the factory floor.
Since ParityFactory’s software integrates with all major and many of the minor ERPs, plants can see real-time information on inventory for both ingredients and finished goods, as well as where they are in the processing stage. “We pull the purchase orders out of the ERP system,” Clemmons explains, “so when ingredients arrive, our system will know what they're supposed to be receiving and whether they receive too little or too much.” The same goes for shipping — the system matches the outgoing items with the sales order from the ERP. “We make sure that the right goods go on the right shipment to the right customer.”
Saving time, money, and labor resources
As with any new technology, implementing inventory software requires some time upfront. For ParityFactory, the process takes about three months — but once it’s up and running, it makes up for that time commitment very quickly.
“Ultimately, once it's done, the amount of effort to train new employees to use this system, because of the error checking and the simplification of it, is significantly less than teaching new employees to do the old manual system. Our average customer saves between 3,000 and 4,000 hours a year in data entry alone,” Clemmons says. “And that doesn't count any of the time savings from error reduction.”
That’s enough to free up a few employees to devote their attention to other important operations, which, for processors struggling to find new workers, can have a huge positive impact. “It's often their best people who are doing these manual exercises because accuracy is so important,” Clemmons says. “Moving to our system frees up some of their best folks for more critical and more strategic work.”
That time comes back to the company in dollars, too. The software can pay for itself in as little as a year.
It’s also a technology that employees enjoy using because of its simplicity, which helps with worker retention and engagement. “On the factory floor, there are always a few employees who say, ‘Hey, this looks like fun. I’m into this!’ And those folks typically tend to quickly become leads and experts in the software.”
It’s because of these benefits that ParityFactory has never lost a client in the five years of the software’s existence. “I think that speaks to the impact of the software and to the courage of the folks that invest in it,” Clemmons says.
ParityFactory will be a first-time exhibitor at PROCESS EXPO this fall. “It’s where a lot of our existing clients are already,” Clemmons says. “We know they're there, and we're partly going just to see them and to make sure we can spend more facetime with them. One of our main focuses this year is to be better partners to our clients. We want to be a generous company to the people we work with and the industries we work in.”
To learn more about ParityFactory’s inventory management software and the implementation process, visit them at Booth #3971 at PROCESS EXPO.