Here at Receta, many of our customers fall under the category of SME when it comes to identifying the size of their business. As such many employ a relatively small number of staff and many only have a small amount of experience in the nutraceutical manufacturing sector.
We’ve compiled a list of the top ten most common issues we see when it comes to managing your manufacturing productions for our SME customers:
Keeping on top of ingredient expiration dates
For many start-ups or businesses moving into the sector, the requirement to manage your stock from an expiration point of view is something never considered. In many cases a supplier may provide an ingredient with a shorter than expected shelf-life – shorter in fact than existing batches of the same ingredient you may already have in your storage area. Without careful labelling and an accurate system (such as a Receta) when it comes to the auto allocation of the correct stock batches – a business can quite quickly find managing their ingredient batches becomes a huge headache.
A second concern is the on-going management of stock that is either past its expiration date or rapidly approaching it. Again, without an accurate system that is able to generate reports to help you both identify and then manage these potentially problematic ingredient batches – a business can find that they only become aware of problematic batches during the production cycle which is using that material. This is at best an efficiency, purchasing and logistical issue and at worse a potentially legal issue should the business be inadvertently using expired ingredients.
The solution to the problem lies in ensuring you have an automated system(s) in place for tracking and dealing with these issues before they become a problem. The ability to maintain an active log of your current material batches and their expiration dates is an absolute minimum. Also ensuring that your system of allocating stock adheres to both the FIFO method (more of that below) AND the expiration date of stock is a requirement as well. Finally, and probably the most difficult to put in place (should you already be running without the previous two requirements setup), is the ability to re-train your staff to ensure that they adhere to the new protocols regarding stock management. Failure to do this, will likely mean that all of your hard work is for nothing!
Maintaining accurate stock rotation (FIFO) and making sure staff apply the correct methods
As with the above issue, it may not be an obvious part of the initial setup of your ingredient storage areas to allow for the allocation and therefore usage of stock on a FIFO method (First in, First Out). This widely accepted method of allocating and using your stock should be central to your plans when it comes to allocating the space required to store your ingredients. You should give ample consideration to how the stock will be removed from storage to then be used in a given production. How will it also be returned to the correct stock area? In many cases, without an accurate stock batch control system, many businesses fall back on a manual allocation method whereby the individual batches used in any given production are selected by the warehouse staff whose job it is to pick the items in question. They then may enter their selections into a system/spreadsheet/hand-written document to attempt to keep their stock management up-to-date. This method should be avoided at all costs. By working this way, you are giving the power of allocation to the individual, who may not be fully experienced with picking the correct batch based upon FIFO and/or expiration date. In some cases, this could mean that newer stock is used in favour of older stock and very quickly your stock rotation falls down.
To correct this problem generally requires the power of the batch control and stock allocation to be moved further up the process in terms of production progression. The allocation should ideally be controlled by an automatic system which is aware of your batches (based upon the deliveries which have been recorded) and can allocate the stock correctly. Your warehouse team simply then need to pick the correct batches based upon their picking list sheets and your stock control and batch management virtually handles itself!
Understanding the complex nature of mixing techniques
Many of our SME businesses when first starting out with mixing their formulations may not be aware of the wide variety of mixing machinery options on the market and may not be able to fully understand which machinery best suits their needs. In many cases, a simple standard ‘ribbon’ blender would offer a satisfactory finished mix should the formulation include either a small number of ingredients and/or all ingredients with the same attributes (such as flow rate, density etc). However as soon as you have formulations falling outside of those setups (specifically those with a small amount of active ingredients in amongst several larger ‘filler’ ingredients), then you may need to consider upgrading both your mixing machinery and your knowledge in mixing best practice.
The correct techniques to adopt to achieve the correct blends are beyond the scope of this blog, however this area should be fully explored if you wish to ensure the quality of your product range to the end consumer.
Ensuring an efficient flow of the right allocated materials to the right manufacturing station at the right time
It is a common issue for inefficiencies to creep into the production management area of an SME when it comes to how that team are managing the flow of materials both to and from the storage areas. With the right system in place, the ability to “pre-pick” the allocations for individual productions and also “group-picking” can be achieved, further improving efficiencies.
Consider the following scenario:
A lubricant material (such as Magnesium Stearate) may well be used across several productions in a given day. Each production would use the same underlying batch(es). At what point is the right time to put that material back to its storage area? Putting it back after each production may not be the most efficient but will be the easiest to track a materials location at any one time. Holding onto the stock and leaving it in the production area may be most efficient but may not be the easiest track the location. Each option has its pros and cons.
With an efficient system such as Receta, you can plan your picking and replacing with 100% accuracy. A good system will let you pick on demand, pick across several productions and also understand the most efficient time to replace ingredients.
Whilst not having a good system in place to cover this problem may not be the most pressing issue for a new business – it should still be considered if the business is looking improve efficiencies and therefore reduce costs.
Creating standard policies for the despatching of orders
In keeping with some of the above points dealing with standardisation and efficiency, creating a standard policy and work-flow for the despatching of orders is sometimes overlooked by new businesses. The simple task of “sending an order”, may upon first glance seem very straight-forward. “How difficult can it be to package something and send it via courier?” Without proper evaluation of how you are planning to send and package your items, very quickly you can be subject to customer returns due to damage and incorrect deliveries.
To standardise your packing and despatching can be easily achieved with a little bit of advanced thought. Consider who will supply your outer packaging boxes? How many will you need to buy? Does your standard products fix well within your boxes? Have you considered any additional packaging you may need to protect your products? How will you send your items? Will you use different couriers dependant upon location? What can you do to standardise both your packaging method and materials across all of your product ranges?
Fully answer the above questions and you should find this problem is consigned to the history books!
Keeping on top of the maintenance on machines
With a new production line comes several new machines, each with their own maintenance schedules. In many cases, this can involve daily tasks, weekly tasks, monthly and annual tasks and can require the cleaning and changing of parts, on-site service engineers visits and indeed whole replacements. The dates and requirements for these tasks should be clearly notes in either a system (such as Receta’s “Machine Tasks” section) or a document kept alongside the machine. It is vitally important that the manufacturers recommended maintenance schedules are adhered to ensure the validity of warranty and extend the longevity of your machine life for as long as possible.
Failure to complete these tasks can quickly lead to machine breakdown which in turn adds to your overheads and reduces profits!
Ensuring customer ETA expectations are met in conjunction with incoming stock deliveries
As has been covered in other blog entries, keeping your customers informed as to the progression of their order is an absolute must. Handily, Receta offer many opportunities to automate that customer notification and keeps your staff free to manage the day to day running of the orders themselves. However, one key area which should always be addressed is the way which you calculate your likely despatch date for the individual products. To understand how this should be calculated, it’s best to understand all of the factors which could influence this date and ensure all are taken into consideration.
Things to consider:
Do you have the materials needed to produce the goods, in stock?
Do you have the packaging design finished and print ready?
Are there any issues with producing the item such as problems with mixing, difficulty with labelling the product?
Is the item being sent to an unusual location?
What capacity do you have on the machines which will be used to produce this item?
Only when all of these have been taken into consideration (usually in conjunction with speaking with several other staff members), can accurate ETAs be given. If any of the above factors change, it is vital you update your ETAs and inform your customer accordingly!
Management of customer packaging (especially from the third party suppliers)
One of the biggest issues we hear time and time again from our customers is the difficulty they face when dealing with materials being issued directly from the client (or at least ordered and supplied into the premises by the client). In most cases this will be the packaging material for the new product(s) to be placed within. Most commonly this would be labels and/or outer boxes, however it could also cover other types of containers and closures. Your ability to produce the items required on the customer order can be heavily compromised should any of the above materials fail to arrive in a timely manner – and in those scenarios it is a wise choice to maintain a constant line of communication with your client during then time when the order is placed through to the time the materials arrive on site. In many cases the client may not have a full understanding of the implications of not having their stock arrive on the site at the time/date agreed. They may also not have a full understanding of the specifications of the materials they are ordering and sending directly to you and this may cause further problems such as the materials not being fit for purpose upon arrival.
This neatly brings me onto the single most commonly reported issue which our customers face when dealing with customer supplied materials and that is to do with product labels.
In many cases, the complexities of getting an initial design correctly produced are high. The issues to overcome can be layout and visual, legality of the information on the label, correct sizing and other specifications, decision on the stock (paper etc) used for printing onto, quantity to order and more.
The lack of certainty and lack of experience in this sector by the customer can easily add many days onto the delivery date of a label which can impact on the ability to produce the finished product.
Unfortunately, with the complexities of labels, there are no easy answers to fix this problem – however if are able to ‘arm’ your cutomers in advance with all of the relevant information to help them when it comes to designing, printing and supplying the labels – that can be a great help. Think about producing a single document which outlines the size, bleed, label core size you are expecting. You should also look to pre-warn your customers of the likely implications of providing their own artwork/labels and how this can easily push back their delivery date.
Accurately planning your productions using a schedule
To accurately plan your productions, ideally you would use a production schedule calendar (usually referred to as a Gantt chart). Ideally the ability to add productions to your schedule should be easy and straight-forward and keeping track of production status’ for jobs should also be as easy as possible.As a fall-back, even something as simple as an online calendar can help when it comes to planning. This system or document should be easily viewable by all concerned parties to enable any potential problems to be spotted as early as possible.
In most cases, the expected turn-around time for the customer should be adhered to, as well as determining other factors which can influence the production dates available. These can be machine availability, staff availability, using accurate production timing data to ensure a long enough gap between other productions to fit this production into and more.
With Receta, as well as a standard production calendar, it can also handle your ability to accurately plan the timings for the job based upon your previous history. In practice, this means your production planning becomes as accurate and efficient as possible easily and quickly!
Housekeeping of obsolete materials and low value stock
Without an accurate system to maintain a record of your stock holdings, it is very easy for slow moving or low quantity stock to fall through the gaps and remain on file for some time. Ideally, you should look to hold minor stock checks as often as you see fit and larger stock checks at least annually.
With the help of a product such as Receta, you can also generate a report showing stock which falls into the category of slow-moving, and also another report showing materials which may be ok to archive/remove. You should ideally be able to generate similar information yourself in your own systems, allowing you the chance to easily identify the stock currently clogging up your shelf space.
By ensuring your holdings of these stocks are kept to a minimum you reduce your storage overheads and therefore increase efficiencies with picking and in turn improve your profits!
Looking to easily solve the top 10 problems outlined above – choose Receta!
By choosing Receta as your preferred ERP for your business, you can be sure that we will become a useful addition to your skillset within your business. As part of your adoption of Receta, we offer on-site training to help aid adoption of the software as well as free video conferences, help videos and more.
Why not contact us today to discuss how Receta can help your business?