10 Ways Track and Trace Improves Production Efficiency

The passion for pursuing quality is visible in every area of growing, successful manufacturers who are attracting new customers. Market leaders defy uncertainty and market conditions by returning to the true north of customer value which is their obsession with delivering excellent quality.

From the shop floor to the top floor, this commitment to quality permeates every process workflow, supply chain interaction, production plan and finished product quality.

Choosing to excel and track and traceability is the cornerstone of many market-leading manufacturer’s success:

  • Track and traceability provide medical device manufacturers with the data, insights and information they need to stay in compliance with many of the most demanding compliance requirements in manufacturing today. ISO 13485 and 9001 standards, Current Good Manufacturing Practice (CGMP) and CFR and FDA requirements are just a few of the many compliance requirements medical device manufacturers are required to meet to stay in business. Market leaders use these compliance requirements as fuel to drive even greater levels of production and process efficiency throughout their multiple plant locations.
  • Excelling at FDA 21 CFR Part 820 compliance while reducing manufacturing costs with track and traceability is the path to profitable growth for all medical device manufacturers today. Reducing manufacturing costs, staying in compliance to 21 CFR Part 820, and gaining greater accuracy and speed in supply chains is all dependent on having a proven track and traceability framework in place. Add to this the requirement of delivering the complete medical device history for each unit produced, and it’s clear that track and traceability has a direct impact on production efficiency.
  • Track and traceability are invaluable for troubleshooting supplier quality problems and averting larger challenges in the future. The more production locations a manufacturer has, the more important supply chain visibility is to maintaining quality levels and meeting production forecasts. Track and traceability save many manufacturers from the high, unpredictable expenses of a product recall by catching product quality problems early.

10 Ways Track and Trace Improves Production Efficiency

Track and traceability provide the data, insights and intelligence manufacturers need to become competitively stronger. How fast a given manufacturer gains insights and takes action on quality challenges can mean the difference between winning new customers and expanding into new markets.

At the center of how manufacturers can get stronger competitively is a commitment to excel at track and trace. The following are ten ways manufacturers can get stronger competitively using track and trace, gaining greater production efficiency over time:

1. Increasing inventory accuracy and forecasting, enabling production planning to optimize manufacturing schedules better.

Knowing inventory levels throughout supply chains makes inventory planning and management more efficient for each production center.

Track and traceability systems over time generate data sets that tend to show patterns, making it possible to anticipate shifts in demand. This insight contributes to greater forecast accuracy and the potential to optimize manufacturing schedules.

2. Improving manufacturing efficiency by making quality and traceability data available at all production locations.

Improving the accuracy and speed of track and traceability data across all production locations fuels greater collaboration and knowledge sharing.

Studies of the Toyota Production System have shown that supplier-level quality, track and traceability data is valued more than money because its impact can easily lead to new sales and higher profits (Dyer & Nobeoka, 2000).

3. Improving order accuracy by enabling manufacturing to deliver high-quality products on time to customers when they expect them.

Track and traceability make it possible for manufacturers to improve their perfect order performance by providing accurate data on when parts, components and subassemblies will arrive to complete orders.

The most challenging aspect of consistently delivering perfect order performance is visibility into logistics-based data (Novack, Thomas, 2004). Track and traceability bridge this gap, making perfect order performance more achievable on a consistent basis.

4. Attaining and continually staying compliant with many of the manufacturing industry’s most stringent standards including FDA 21 CFR Part 820.

The costs of compliance continue to escalate in manufacturing. Track and traceability techniques can help to reduce these costs by improving supply chain, in-plant and fulfillment efficiency. Track and traceability strategies enable more consistent compliance, reducing costs at the same time.

Reducing inventory carrying costs, inventory obsolescence, and days sales outstanding (DSO) are a few of the many costs track and trace initiatives have a positive impact on. Reducing stock outs, eliminating duplicate chargebacks and reducing lost sales due to allocation are additional cost and time savings gained.

5. Reducing the expense, impact and risk of product recalls by having accurate genealogies of each product available in real-time.

Minimizing the impact of part failures by tracking to the lot, batch or bin level where a defective part originated from can save millions of dollars in product recall costs. Using genealogies to discover how a defective part was first introduced into production is invaluable.

With a given part’s genealogy recorded it’s possible to isolate finished products at risk and make more informed decisions regarding how best to handle the products already with customers. Streamlining the warranty claims process and averting large-scale recalls are two of the many benefits of having genealogies created with track and trace workflows.

6. Increasing machine and tool capacity utilization that contributes to improved Overall Equipment Effectiveness (OEE) improvements.

Manufacturers relying on track and traceability techniques can define a roadmap to higher overall equipment effectiveness (OEE) and greater productivity across all their plant locations.

By tracking and tracing the quality of produced part, component or material to a given machine or tool, engineering and quality management have the data they need to increase tool capacity utilization and effectiveness.

7. Reducing scrap and rework by screening out defective parts, components and subassemblies before production of the final products.

When track and traceability workflows are integrated with inbound inspection and quality management, it’s possible to stop entire lots of defective parts before they even enter the warehouse.

As more data is collected over time, it’s possible to also predict patterns in quality by the supplier, further reducing scrap and rework by anticipating when defective parts are in a supplier delivery.

8. Reduces inventory shrinkage and theft due to greater visibility and reporting that quickly catches inconsistencies in inventory levels.

When a track and traceability system is managing all inbound shipments to the batch, lot and container level it’s relatively easy to see at what point inventory is lost or stolen.

Automotive, aerospace and defense (A&D), high-tech and medical device manufacturers are early adopters of Radio Frequency Identification (RFID) tagging which increases the accuracy and precision of track and trace data, further ensuring inventory stability.

9. Reducing fines for non-compliance, litigation costs and possible class-action lawsuits.

The many examples of manufacturers being fined by regulatory agencies for operating out of compliance, the high costs of litigation and lawsuits, and missed regulatory filing dates often are signs of a quality management system that needs an overhaul. In the most stringent industries including medical device manufacturing, track and traceability have been able to reduce non-compliance errors and eliminate litigation costs.

10. Avoiding damage to a manufacturer’s company reputation and brand.

Stopping defective products from reaching customers by using genealogies to find and eradicate bad parts from production and managing suppliers and inventories to meet delivery dates both strengthen a company’s reputation. Manufacturers earn their great reputations every day by doing more than they commit to. Using track and traceability as a means to deliver excellent products is another investment made in keeping the promise to customers of giving them the best quality product every day.

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Dyer, J. H., & Nobeoka, K. (2000). Creating And Managing A High-Performance Knowledge-Sharing Network: The Toyota Case. Strategic Management Journal, 21(3), 345.

(Novack, Thomas, 2004)

Novack, R. A., & Thomas, D. J. (2004). The Challenges of Implementing the Perfect Order Concept. Transportation Journal (American Society Of Transportation & Logistics Inc), 43(1), 5-16.

Youngkyo, S. (2016). Mother Factory vs. Model Factory: Comparative Study of International Knowledge Transfer. Annals Of Business Administrative Science, 15(6), 251-263.

For more than 25 years, IQMS has been designing and developing manufacturing ERP software for the repetitive, process and discrete industries. Today, IQMS provides a comprehensive real-time ERP software and MES solution to the automotive, medical, packaging, consumer goods and other manufacturing markets. The extended single-database enterprise software solution, EnterpriseIQ, offers a scalable system designed to grow with the client and complete business functionality, including accounting, quality control, supply chain, shop floor, CRM and eBusiness. With offices across North America, Europe and Asia, IQMS serves manufacturers around the world. For more information, please visit iqms.com.