1. Create SKUs for all the package sizes you sell
"Many small manufacturers get caught by this one." says Ian Benoliel, President of NumberCruncher. Instead of creating different units of measure as a way to define the package size you should create an entirely different SKU. Although you will have more SKUs, you will be able to track sales of a specific package size and more accurately reflect the cost of the packing. This the same thing the big boys do. In the super market you can purchase a can or case of Coke. You will notice that the singles and cases have different SKUs. This is because The Coca Cola Company uses a 'Packaging Bill of Materials' for the case. They combine 12 singles, case materials and labor to create an entirely new SKU.
2. Use Lot or Batch numbers
A product will typically have an identifier often referred to as an SKU (stock keeping unit). For example a case of tomato sauce may have an SKU of SCS-123. In addition to the SKU, the case will have a lot number which may be different on each case. For example cases purchased in December may have a different lot number than those purchase in January but the SKU will be the same. A lot number may also be a date code representing the expiration of the product.
Lot numbers enable the manufacturer to trace a product back through the production process to the source of the raw materials used in the finished product. In our example of tomato sauce, the lot number on the cases allow the manufacturer to determine which tomatoes where used and from which supplier. So in the case where a certain batch of tomatoes may have been contaminated, the manufacturer can recall only the lot numbers affected instead of a total recall.
3. Develop and Maintain a Bill of Material for all your Recipes
In process industries, such as food manufacturing, the BOM is known as the formula, recipe, or ingredients lists. It is simply a list of the ingredients and the quantities of each needed to manufacture the final product. It may be used for communication between manufacturing partners or confined to a single manufacturing plant. Using BOMs ensures recipes are adhered to during production. In addition to the ingredients and yields, the BOM has production instructions and routing steps, including one that can be called quality control. You wouldn’t believe how many small companies keep their formulas and production notes on paper in a file cabinet (or in the owner’s head). Paper or even basic Excel spreadsheet systems don’t allow companies to easily update and instantly communicate changes throughout the entire organization.
In business the only constant is change. So you should regularly review you bill of materials to ensure you have the correct ingredients and proportions.
4. Use Work Orders for Production and Quality Control
Paper work orders do not allow production data to be shared throughout a central database. Quality processes cannot be effectively documented and saved to create standard operating procedures critical to consistent food production. The ability to save and attach the batch and lot number being manufactured ensures quality processes. .
The electronic work order is used to create finished product. Each step in the work order is completed before the work order can be finalized. Too often lower-cost technology solutions lack the needed custom fields required per work order that allow the quality control checklist to be integrated with all other functions, and retained in the same database as order and inventory information.
Without the work order, the impact on quality will be significant, because the internal quality metrics cannot be documented. The work order is the internal document that manages production of a specific BOM for a specified quantity. The work order can track yields of raw materials and reworks.
5. Put Labels on Finished Goods
This seems obvious but many manufacturers don't bother to put the appropriate label on finished goods. A label should at a minimum have the SKU, description, quantity and date. Other useful information would be the lot/batch number, work order # and best before date or expiration date. It would be extremely beneficial to you and your customers if your labels have bar codes. This would allow both you and your customers to use scanner to ship and receive product.