Rely on Software To Meet Regulations

Jan. 1, 2003
Both warehouse software and manufacturing software are ready to help you meet the challenges of governmental regulations, product recall, auditing and industry practices.

Warehouse and manufacturing software comes into play in a myriad of ways when it comes to meeting FDA as well as EPA regulations. Three major areas where WMS supports governmental regulations include tighter controls, better information and improved accounting processes. For manufacturing and distribution of pharmaceuticals and health care items, governmental regulations and product liability issues apply. Warehouse management systems (WMS) track lot numbers of manufactured goods and provide traceability — whether it’s food or pharmaceutical or tire recalls.

“The whole area of traceability is becoming more critical from a product liability and consumer protection standpoint in tracking who was sent which goods and when,” says David Koch, president of SK Daifuku Corporation.

Koch adds that when it comes to tracking inventory, WMS is critical for determining the value of a company. With strict and accurate accounting rules being applied to companies today and all the SEC activity in tightening the value of good will, WMS excels in providing real-time, accurate inventory level accounting.

There are a lot of companies that track their operations manually with a long paper trail. That paper has to follow the product through all operations, and sometimes it is lost or incorrectly marked. When it comes to food handling, liability issues could come up if you’re tracking items manually. And if a problem is reported with a product, a quick response with accurate data to any question about your handling could be necessary.

Meeting recalls is more demanding today. “There are companies that have grown complacent because they’ve not been recently audited by the government,” says Koch. “However, the government’s ability and interest in auditing companies and a company’s liability are huge if they don’t have the kind of information systems in place to track and monitor their own processes.”

Food regulations and warehouse software

The government’s Hazard Analysis and Critical Control Points (HACCP) regulation applies to seafood, meat and poultry processing plants. For example, HACCP requires that frozen foods be maintained at a certain temperature so that there are not problems down the supply chain with spoilage. But now distributors using WMS to handle food and grocery items are using the HACCP program even though they are not mandated to do so by the FDA.

“I think today that our government thinks that the U.S. is most susceptible to a terrorist attack in the food supply chain. That is where HACCP recall and lot tracking functions will help prevent damage due to a terrorist attack,” says Scott Gilles, product consultant for the food industry for Manhattan Associates.

WMS in food distribution can be used to avoid and minimize product recalls with improved tracking of lots and workers who touch any item. WMS tracks lot numbers and what condition product was in at specific points — for example whether the cold chain was maintained on a trailer.

“A lot of food distributors are implementing HACCP today, but they’re performing manual paperwork. That makes it cumbersome to log in critical control point data like temperatures of trailers or temperature of product,” says Gilles.

To automate the data collection process, Manhattan uses a Question and Answer Master module as part of its WMS. Upon receipt of material, the user is informed of whether a product is HACCP-sensitive or perishable. The WMS automatically prompts additional questions for receiving dock workers about the physical condition of the foodstuff.

The WMS’s proven inventory control functions also come in handy for tracking the lifecycle data on any produce while it’s in your facility, including cycle counting, inventory checks, temperature checks or maintaining lot information for potential recalls.

WMS and pharmaceuticals

In prescription drug manufacturing and distribution, governmental regulations rule the day with the FDA 21 CFR Part 11 rule. This regulation allows drug handlers to employ electronic tracking and electronic signatures, as well as authentication and reauthentication of worker ID.

“An electronic signature is an ID that proves who you are,” says Steve Kickert, chief technology officer for HighJump Software Inc. It often includes a password known only to the worker. Warehouse software used in pharmaceutical facilities follow FDA guidelines for auditing, keeping track of successful worker log-ins as well as failed log-ins. Another point of concern for the FDA with drugs is the possibility of a worker setting down an RF terminal and allowing another person to act on the worker’s behalf. “To reduce the chance of that, the software features an inactivity timeout that locks out the terminal after so much time elapses,” says Kickert.

With drug handling, it’s important to the FDA that activity logs cannot be altered later. HighJump has built into its WMS protection against unauthorized access to activity logs, ensuring that database reporting features are read-only.

With all the RF activity going on in plants using warehouse management system software, there’s reason to be concerned about data security.

“Especially since 9/11, there’s been an upswing in interest about security and encryption and authentication — to prove you are who you say you are and to keep someone from peering into your electronic conversation,” says Kickert.

He finds that the larger the company, the more attention is paid to security. For those using RF networks and the 802.11 IEEE communications standard, there’s a possibility of eavesdropping. “With RF, you could technically sit in the parking lot with the right equipment and ‘sniff’ into the system. To prevent this, we authenticate users with passwords and encrypt those communications so that no observer can obtain the passwords,” adds Kickert.

When it comes to meeting FDA regulations and data security, look for a WMS vendor that can conform to FDA requirements and that has the flexibility to reauthenticate workers at the appropriate spots. HighJump is frequently asked about its ability to log failed and successful attempts to access its WMS, inactivity timeouts, original authentication and reauthentication. These are major points for FDA compliance.

An example of a pharmaceutical facility using WMS is the pcAIM 4.1 software installed at Schering Laboratories in Branchburg, New Jersey; Suwanee, Georgia; and Reno, Nevada. At Schering, lot control, product tracking and keeping data on shipments longer were priorities as it sought to achieve FDA compliance. Also of concern for Ann Arbor Computer in installing the software was security access so that only certain workers could access production data and generate reports.

“We code our pcAIM software so that it records who performed a task, when they did it, and what they did with the drug product,” says Roger Crawford, pcAIM operations manager for Ann Arbor. It uses a log-in ID for all warehouse users and is designed to reduce shrinkage and improve recall preparedness. “There have been some recalls at Schering due to manufacturing issues. When you’re talking asthma inhalers, you want to have an effective recall to get product that works into the hands of customers,” says Crawford. This WMS software tracks where every package and carton of medications were shipped. “FDA certification at our customer sites has improved our pcAIM product, forcing us to meet more stringent requirements,” adds Crawford.

Dairy manufacturing and distribution

A major manufacturer of dairy goods recently purchased irista’s warehouse software to manage the pick, pack and shipments of finished goods. The manufacturer had seen an explosion in the number of yogurt products with different packages as well as many new frozen yogurt confections. As a result, the number of SKUs of raw material had proliferated, and it was critical to ensure that the right raw material went into the right process.

“The dairy manufacturer wanted the WMS to track goods for internal recall,” says Scott Rishel, vice president of business development for irista. “If you introduce the wrong ingredient into a process, it can be quite expensive to retrieve, especially once it leaves the manufacturing facility.”

The WMS also handles the manufacturer’s HACCP requirements, delves into traceability for each lot of goods, and records which goods were moved, who moved them, into which line the goods went, the quality of the goods before they were moved and which supplier sent the goods.

“Tracking these data allows a positive release of goods that have passed incubation and the quality assurance process, and it replaces a manual, paper-based system,” adds Rishel.

The WMS also addressed thorny manufacturing line problems by increasing line-side efficiency. Before, all the material needed to make yogurt for a single day was kept at line side. Now with the WMS supporting production, only the raw goods needed for a specific run are brought to the line. The software also solved problems of starving the line of goods as well.

Software also cut labor costs; before, one worker was needed to watch one line. Now three or four lines can be checked by just one worker. The software directs the worker’s attention to critical production control points as raw goods are being consumed.

Reducing the impact of product recalls and increasing the shelf life of food are concerns addressed by software at Santee Dairies in City of Industry, California. The software keeps track of first-in/first-out rules to maintain the retail store’s longest shelf life as well as tracking at what hour the product was manufactured should there be a recall.

Daniel Labell, president of Westfalia Technologies, says that the WMS tracks unit loads as they enter the warehouse coming off the production line. Unit loads resemble palletloads of milk containing 48 cases with six gallons per case. Unit loads are tied to individual store orders.

Westfalia also installed a similar system for Hershey’s Ice Cream in Middletown, Pennsylvania. Ice cream is tracked to within one or two unit loads. The concern for Hershey’s is to avoid bad batches or contamination. A customer might complain or get sick, and the problem is brought up at the retail level.

“Hershey’s would have to prove the problem has not occurred in other production lots by producing the tracking information. This proving process is helped by the WMS storing data on when the ice cream was produced, what day, what hour and what line manufactured it,” says Labell.

The most important thing that Labell says about recall situations is the availability and rapidity of getting information out of the WMS so a company can respond quickly and early to a recall question. This way, a company can tackle a complaint to make certain it isn’t blown out of proportion.

“Without that information, red flags can be thrown up everywhere, and a company would have to look at all the inventory produced over the last month — and then there’s a recall costing millions of dollars,” warns Labell.

Software makes for smart process manufacturing

Automotive paint and petit fours have something in common: both have formula-driven recipes with ingredients that need tracking. Software that handles process manufacturing can be the key to automatically generating government-mandated Material Safety Data Sheets (MSDS) or to reporting on hazardous material for SARA 3.12 and 3.13 (Superfund Amendments and Reauthorization Act) reporting. SARA reporting requires that if a company holds certain quantities of hazardous material on site, the firm needs to report at the end of the year the average daily total of material.

Best Software has plenty of experience in offering software for batch manufacturing operations. BatchMasterPFW is used for making chemicals, solvents, additives and adhesives. “No matter whether the manufacturer is mixing paint or chocolate, it is grabbing certain ingredients at varying units of measure, sizing them differently and containerizing and packaging them specially,” says Chris Knapp, senior account executive for Best Software. Best has also moved into food manufacturing and sauces. On the food reporting side, FDA requirements for nutrition and ingredients come into play as manufacturers must submit nutrient analysis reports to the government.

“Islands of information are the biggest problem for chemical companies in that they may be using software written for discrete manufacturing. Some manufacturers run these discrete manufacturing software packages and then laboriously generate MSD sheets using Microsoft Word or some other template. Then they have a lab group that uses Excel software, trying its best to manipulate units of measure and coming across rounding issues that tend to frustrate accounting,” observes Knapp.

Knapp says that at the end of the ’90s, everyone was going gangbusters to install Y2K-compliant software, but some companies are finding they installed the wrong systems. As a result, the market for new software isn’t nearly as great as the market for replacement software as companies grow or find they bought a system that isolates their departments.

One guideline to finding the right software package is whether the data are held in one relational database so that reporting is automatic. “You need to avoid digging through data to generate a SARA report, print a nutrient analysis or print an MSDS. Also look for a software vendor that is quick to accommodate new reporting standards, new report formats,” says Knapp.

Manufacturing software for aerospace, defense, medical devices

Industries such as aerospace and defense have government oversight, as do medical device and biotechnology manufacturers. In aerospace and defense, it is Tier 2 and Tier 3 manufacturers that need to meet governmental AS 9000 aerospace requirements. “Electronic signatures and tracing are big elements for manufacturers that have to account for and demonstrate a chain of custody for raw material through finished goods with serialization and lot numbers,” says David Bennett, director of product management for Lilly Software Associates. Lilly’s Visual Enterprise manufacturing software is managing operations for manufacturers of armaments and mine safety equipment.

The most critical problem that manufacturing software addresses in this field is traceability. A serial number can be assigned to trace raw material and assign that material to a work order to build a finished product. “If there is a problem in the field with an assembly, you can trace the problem back to the manufacturing line, telling you which processes were performed and what inspection data were taken as part of the work order,” says Bennett. You can even track the original lot numbers back to the raw material vendor.

When it comes to tragedies or failures in the field, you need to track back to the root cause of the problem to take corrective action. Or possibly, a raw material vendor notifies you of a problem and you need to look at where that raw material was used.

Also useful for meeting governmental quality requirements is Visual Quality software. It is designed to meet Western Electric manufacturing rules, and supports aerospace and defense work. Integrating the Quality software with Lilly’s Visual Manufacturing software lets users control the big picture of quality, like tracking workers to ensure they have certain job skills or training before beginning a task.

Product configurator software helps in highly engineered manufacturing operations so that items purchased for an assembly don’t conflict with design safety. For example, if you are purchasing an oxygen valve for a certain design, you don’t want carbon steel going into the product. Product configurator software prohibits certain options and combinations of parts based on rules and logic.

Whether you need to be able to track goods for product recalls or ensure quality manufacturing and handling of goods, make sure any software you select will help you satisfy current governmental regulations. MHM

New Container Security Initiative May Supersede Shipping/Identification Standards

U.S. Customs implemented the new Container Security Initiative (CSI) on December 2, 2002. Its four objectives for inbound U.S. shipping container cargo are:

1. Establish security criteria;

2. Prescreen shipping containers before they reach U.S. ports;

3. Inspect high-risk containers;

4. Use smart and secure containers that protect the integrity of contents and transmit accurately that integrity has been lost.

Gordon Fuller, director of e-business group for Covansys, an international consulting firm, explains the standard by saying the first phase of the CSI is to provide 24-hour advance notice from foreign ports of all goods being shipped to the U.S. In addition, previously allowed shorthand descriptions for cargo will no longer be allowed; they’ll be replaced by detailed item descriptions.

If all cargo is not identified within 24-hour notice of leaving a port, the cargo may be classified as high-risk, requiring detailed inspection on the dock. That also applies to cargo shipped to Mexico and Canada to avoid the more stringent CSI requirements.

Fuller sees a more finely detailed data requirement as one way that this regulation will be met. The definition of smart containers hasn’t been ironed out yet by Customs, but Fuller’s idea is that RFID will be required for all shipments with all the RFID scans within a container being tied to the container’s seal. “If the seal is broken or if any of the contents doesn’t match the RFID data encoded into the container seal, then the seal and container contents aren’t synchronized. This is evidence of tampering. RFID tags can be read simultaneously through the container walls, which makes them ideal for meeting the CSI requirements for cargo identification,” says Fuller.

The UCC has established a 2005 Sunrise Date for applying new 14-digit bar codes to goods shipped to the U.S., allowing two more digits to help identify items. But that won’t be enough digits to meet CSI, maintains Fuller. “The 13-digit EAN 128 bar codes and the new 14-digit UCC identification standard are pre-9/11. I see the RFID chip solution offering 96 digits will be needed to meet the Homeland Security shipment standards.”

For more on the CSI and its effect on bar code standards, visit, MHM, Articles, Industry News, “New Container Standard Changes All the Rules.”

Resource for Food and Beverage Operations

Material Control in the Food and Beverage Industry is a free white paper offered by irista that discusses a variety of concerns that affect the food industry, including:

• Product recalls;

• Terrorism;

• Hazard Analysis Critical Control Points (HACCP) regulations.

A section titled Current State of the Food and Beverage Industry states that “Illness and death from contaminated food products are not the only concern for industry and governmental officials.” The director of the Center for Food and Nutrition Policy “doesn’t believe that a terrorist attack on the U.S. food supply will result in the death or illness of large numbers of people. Of greater concern is the financial impact a terrorist attack would have on the food industry.”

The paper describes how software can be used to mitigate the risk of product recall while also reducing the cost of manufacturing by improving the quality and consistency of raw material. The paper covers real-time tracking and control for food and beverage as well as data capture to ensure that the right material makes it into the manufacturing process.

For a copy of the white paper, go to www.irista/fb.

Global Logistics Software Improves Security

Meeting governmental regulations regarding the myriad of shipping documents required for customs officials is the specialty of global logistics software vendors. The goal is:

• Full audit visibility;

• Tracking where a shipment is at all times;

• Alerting trading partners about overdue shipments;

• Using automatic identification like RFID tags.

For a report on what this software offers today, see an interview with Stephanie Richelieu of Qiva at, MHM, Articles, Industry News, “Global Logistics Software Smoothes Regulatory Issues for Trade Security.”

More Functions Ahead for WMS in 2003

Leading software providers that were surveyed in a recent study by What’s Working in WMS, an industry newsletter, reported that they plan to add new functions to their WMS packages in 2003.

Look forward to:

• More order management functions as well as transportation, Web-enabled training, auditing and claims, planning and forecasting, and scheduling functions.

• More tightly integrated WMS with transportation management, yard management and other execution software.

• More constraint-based optimization. Look for software to better analyze capacity constraints of labor and dock locations, etc.

• More features to be offered by major software vendors, and that smaller vendors haven’t had the revenue lately to invest so much in research and development.

To see the full report in the February 2003 issue of What’s Working in WMS, go to, or phone 800 232-4317.

Adopting the EAN 128 Standard

With EAN 128 bar code standard, instead of just a pallet number and an item identifier, the bar code can indicate manufacturing or kill date, expiration date, catch weight information, lot number or package date. The new standard is already in fairly widespread use in the U.S. Many users might be in pork processing, making bacon or sausage or hot dogs, says Scott Gilles, product consultant for the food industry for Manhattan Associates. “Consumer meat producers and other distributors will find the standard useful because through a single scan you can learn so many attributes, with catch weight being important.”

Manhattan has started to embed EAN 128 into its receiving and picking software. It’s of benefit especially to meat producers and distributors so that a product doesn’t need to be entered in or weighed again, which increases productivity at the receiving dock.

Software Resources

Ann Arbor Computer,

Best Software,


Distribution Group, 800 232-4317

HighJump Software,


Lilly Software Associates,

Manhattan Associates,


SK Daifuku Corporation,

Westfalia Technologies,

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