The industries where your ERP choice is a major competitive differentiator

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Categories: Cannabis, Chemicals, ERP, Food and Beverage, Sage X3
June 26, 2018

ERP solutions can help ensure compliance in a range of industries.

When compliance is not an option, your manufacturing company needs an enterprise resource planning solution (ERP) that provides the proper tools to ensure regulatory adherence. There are three industries where your ERP choice is a major competitive differentiator: food and beverage, chemical, and cannabis.

Why are compliance issues so critical in these areas? Because each is heavily regulated to protect the public. Ensuring compliance is on the manufacturers, with required reporting and documentation necessary to meet regulatory requirements.

That’s where enterprise resource planning solutions play a key role. ERP solutions allow your company to complete the requirements put in place by multiple regulating agencies, often using automated tools to measure, record, and track. These tools can automate the preparation of required reports and audit trails. In addition, in the unfortunate case of a recall, ERP solutions can provide information that allows your company to respond faster and mitigate impact on customers and reputation.

Let’s take a closer look at each industry and why having an ERP is a major factor when it comes to compliance.

Food and Beverage Industry

Similar to life sciences, the food and beverage industry faces extensive regulatory scrutiny from domestic and international regulations. In 2017, for example, major elements of the federal Food Safety Modernization Act were enacted, requiring manufacturers to develop preventative controls to protect food for humans and animals. The FSMA also requires companies to have mitigation strategies in place to protect from food supplies becoming adulterated, compliance with transportation guidelines, and verification procedures to ensure safety standards are being met by foreign suppliers.

Like in other applications, an enterprise resource planning solution integrates multiple components of the enterprise, from accounting to operations to warehouses management to business intelligence. When it comes to compliance issues, this integration is critical.

With an ERP solution in place, companies can automate the measurements, monitoring, and recording of data required to maintain compliance with FSMA and other guidelines in place by the U.S. Food and Drug Administration and other federal and state agencies. Ingredients can be monitored closely at each step in the supply chain, allowing your organization to generate detailed reports at the moment of need.

In the case of an incident, a robust ERP platform also allows for rapid tracking and tracing of ingredients. Manufacturers can quickly determine the scope of an incident, down to the batch number, and determine the customers and consumers effected. ERP solutions help not only in the mitigation of such incidents, but also in the communication about these incidents to customers, consumers, stakeholders, the general public, and regulators.

Automating these tasks reduces the likelihood of human error from factoring into the reporting. It also allows for audit documentation that is easy to generate and detailed.

Here are several other areas where ERP solutions help with compliance.

  • Processes and procedures. Multiple federal, state, local, and international agencies may have regulatory requirements. Tracking, updating, and maintaining these guidelines can be complex, as there are often subtle yet important nuances for each agency. Each agency may also have different reporting and documentation standards. With an ERP solution in place, manufacturers can track these variances, record and report, and present documentation necessary to meet the requirements of myriad agencies.
  • Scheduling and Ingredient Management. To ensure that the public is safe from allergens and contamination, recipe management and production scheduling are critical. When factoring in warehouse management, clean-out times, staff scheduling, and the need for efficiency, scheduling is a complex subject. ERP solutions can coordinate employee and machine scheduling, cleaning schedules, and warehouse management while developing optimal production sequences that maximize efficiency.
  • Employee Training. Ensuring that workers understand the machinery they are using, the products they are making, and the ingredients with which their working is an important component of many compliance standards in the food and beverage industry. That’s why ERP solutions make sense. By coordinating staff training, documenting that training, and ensuring the proper reports are available if needed, the ERP helps to ensure compliance, improve employee development, and save time for HR and employee training staffs.
  • Transparency. ERP solutions allow for better transparency across the supply chain. By providing access to data among staffs, suppliers, and distributors, an ERP solution can bring to bear the collective insights of multiple players. If there is a compliance issue that requires a change in processes or procedures, access to this data can allow for the best solutions to be brought to the fore.

Chemical Industry

Compliance in the chemical industry is critical. If formulas are not followed accurately, products can be misapplied, resulting in death and damage. Here are some of the key ways an ERP solution benefits compliance in the chemical industry.

  • Procedural compliance. Chemicals used in production are often hazardous yet need to be transferred, used, and handled. Each chemical requires a protocol to determine how workers interact and use the material involved. ERP tools can maintain the necessary specifications for each ingredient in use, maintain records on the handling and use, use automation tools to monitor, track and record usage, and reducing the likelihood of errors that can affect worker health and safety.
  • Formulation analysis. As manufacturers or their customers request new products or variations on old ones, careful calculations need to be made to ensure that hazards are known and that procedures are developed or adjusted to fit. An ERP tool can help determine if the new formulations are safe and if changes need to be made. ERP software can also ensure that chemical and product strengths and qualities are accurate and that labeling matches.
  • Maintenance and calibration. A key component of compliance is ensuring accuracy. That means that tools, measures, and other equipment is working accurately and properly. Scheduling maintenance, and documenting the results, means compliance. Alerting employees to measurement errors or needed maintenance also ensures that production does not lag and that operations continue working efficiently.
  • Storage and access. Security is critically important to chemical manufacturers, and with an ERP tool, automation and sensors can assist with access control, rules management, and monitoring of environmental conditions that can adversely affect supplies and product.

Cannabis Industry

Along with the upswing in cannabis use and product selection, comes an increase of rules and regulations from local and state regulatory agencies governing its production and sale. For the growing cannabis industry, these rules are critical, not just for individual business viability, but for broader credibility with elected officials and the public.

With the industry, and the regulation of it, so new, it’s inevitable that there will be many changes and additions to existing regulatory mandates.

An ERP solution for the cannabis industry is essential to ensure compliance across the broad aspects that are regulated: finances, production, waste management, inventory tracking and management, licensing compliance, packaging, labeling, and taxation.

An ERP solution, for example, could track plants from seed to sale, providing data from multiple locations that can be documented, as can the finished products.

ERP tools can also handle the important security considerations with the cannabis industry. Customer data access and privacy continue to be hotly contested issues, particularly in an industry where federal and state laws vary significantly. Insecure storage of this data could be costly from regulatory and PR perspectives.

The Right ERP For Your Manufacturing Company

Choosing the right solution for your enterprise resource planning needs is essential. With Sage X3, companies have a comprehensive solution to meet their specific and complex compliance needs.

Here are just a few of the key resources available in Sage X3 that address compliance:

  • Inventory Management. Sage provides tools to manage and analyze inventory. Warehouse operations can stock, pick, and fulfill orders faster and accurately. Reports and analytics allow for decisions about product profitability, inventory, and order to cash issues.
  • Operations. Sage simplifies traceability, allergen reporting and recall management. It optimizes production schedules, speeds up turnaround times, and increases productivity and efficiency.
  • Traceability. In the case of a recall incident, Sage offers full traceability of products from manufacture to point of sale. Immediately see the impact of a recall.
  • Quality Control. Compliance relies on internal controls, measures, and processes to ensure the accuracy and safety of ingredients, products, and processes. Sage tools allow for the implementation of quality control procedures, tracking of ingredients throughout their life cycles, and creation of audit trails and related documentation.
  • HR. Training, managing, and retaining staff is critical. With ERP tools from Sage, you can integrate, payroll, benefits, recruiting, self-service, training, and analytics to ensure your employees remain focused on the work and have the right tools and training to maintain compliance.
  • Business Intelligence. Business intelligence allows your company to spot trends, stay on top of the competition, and draw insights from centralized data that can ensure your growth strategies align with compliance requirements.

NexTec Group helps companies navigate the complex array of ERP solutions. Our expert consultants work closely to understand the needs of each customer and identify the right ERP. Give Sage X3 a try and see how NexTec group can help develop and implement your ERP solution.