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Digital Transformation in Food and Beverage, CPG

Ensuring Consumer Traceability and Quality

Confidential Property of AVEVA Group plc.

Presented by: Xavier Marfa, F&B Business Development Manager EURA

The Value Driver for Digital Transformation in F&B/CPGValue Propositions across the operational cycles; the production cycle, the assets cycle and the

product cycle

Energy Management & SustainabilityReduce carbon and water impacts, adopt sustainable practices

Improve Operational PerformanceImprove productivity and remove all the wastes from your processes

Improve Asset Performance & ReliabilityReduce Capital and Operation Expenditure needs

Increase Recipe AgilityMeet demands with the right products at the right time

Safety, Quality and ComplianceProtect both consumers and shareholder value. Reduce risk and costs of

compliance and non compliance

• Asset (Visibility): Strategize/Design, Monitor, Analyze, Maintain• Production (Velocity): Prepare, Operate, Inform• Product (Variety)

Raise Consumer ConfidenceFood Safety/Regulatory Compliance

• Helps manufacturers increase efficiency by

minimizing variations and reducing production

wastage

• Provides information to implement Good

Automated Manufacturing Practices (GAMP)

• Provides objective evidence of quality, safety

and regulatory compliance

• Prevent suspect products and materials from

reaching the customer and avoids costly

regulatory non-compliance penalties

• Ensures brand protection and build trust with

consumer through transparency of

information

Business Value:

Our Food Safety approach supports food safety

compliance and traceability to preserve brand

equity and shareholder value

• Serialization

• Label Assurance

• MES Quality

Brand protection

Transparency: raise consumer confidenceSecure the whole value chain for trust and transparency

What if you could have full traceability of your products from farm to fork?

• Get all raw materials origin

• Be sure it’s an original product (not counterfeit)

• Be sure there is no recall on it

• Be sure there is no Allergen on it

• Be sure the cold chain has been preserved

It is about the whole Supply Chain and the Food

Safety is essential part of it

Quality Management – The OfferingOverview

• Specification Mgt.

• Integrates to ERP for specification data

• Defines critical variables/attributes to measure for product quality

• Sample Plan Definition Mgt.

• Integrates to ERP for sample plan definition

• Defines plan for collecting samples (e.g. event and time based)

• Sample Plan Execution Mgt.

• Provides sample collection notification (e.g. variables/attributes

to collect, no. of samples, time required, etc.)

• Supports automatic and manual data collection methods

• Statistical Process Control

• Supports multiple rule sets (e.g. Western Electric, etc.)

• Provides SPC charts to monitor and control process

• Provides visual indicators to SPC rule violations

Serialization is the assignment of unique, traceable numbers to

individual items or saleable units

• Serialization also maintains those identifications to provide visibility and full traceability within

the supply chain.

• The majority of the world requires serialization of products according to the GS1 standard of a 2D

barcode.

• Serialization and Product Track and Trace are often used interchangeably, but in order to track and

trace, it needs to be serialized first.

Why Serialization?

Counterfeiting

Manufacturing of

inferior copies of

a genuine

“branded” product

labeled with the

original brand

name.

Product Mix-up

The risk of the

wrong product

being put into

distribution.

Grey Marketing

Unauthorized

distribution of

branded

products.

Pharmaceutical

Impact

Loss of:

o Revenue

o Profit

o Equity

Potential lawsuits

=

Consumer

Impact

Loss of:

o Money

o Quality of life

o Life

Serialization Solution

Serialization

Solution

Full GS1

complianc

e Site

Serializatio

n

Line

Serializatio

n

Palletizer

Aggregatio

n

Rework &

Reprinting

Reports &

Analytics

Master Data

Configurati

on

Serial

number &

work order

manageme

nt

Site Serialization • Level 3 Site Control solution

• Central Configuration (Package, AI, Product,

Line)

• User & Privilege Management

• Order Management

• Serial Number Generation

• Serial Number Management

• Notification Management

• Reports & Analytics

• ERP, EPCIS and MES Interfacing

Line Serialization & Palletizer

• Level 2 Line Control Software

• Serialization Work Order Execution

• Work order selection

• Work order setting

• Work order execution

• Reconciliation

• Working side by side with Serialization equipment –

camera, printer, scanner, ejector

• Support only homogeneous order palletization –

same product and same order on pallet.

• Configuration

• Site Configure Packaging Hierarchy, Application

Identifiers, Product, and Line.

• Line Configure packaging hierarchy

• Run Time

• Site: Receive order details from ERP

• Site: Create a packaging order

• Site: Get serial numbers from EPCIS (GS1)

• Site: Serialization dispatches order to specific

lines

• Line: Receive order

• Line: Start and Complete printing

• Line: Upload the serial number statistics and

Aggregation data to Site

• Site Send commissioning information to EPCIS

(GS1)

• Site: Generate Analytics reports, and archive

serialization data (typically for 12 years)

Solution Flow

EPCIS: Electronic Product Code Information Services is a GS1 standard that enables trading partners to share

information about the physical movement and status of products as they travel throughout the supply chain

Impacts of Wrong Package or Label

• Undeclared Allergen

▪ Can cause sickness or even death to people who

allergic to certain foods.

• Not fit for purpose

• Waste of consumer time and money, and eventually

confidence to the brand.

• Regulatory non compliance

• Penalty and potential lawsuits and lost of operation

license.

• Brand damage

• Lost of sales, market share and equity.

• Recall is initiated to minimize all these damages

• Average cost of recall - $10 millions, in addition to

brand damage and lost sales.

Market TrendRising Demand for Allergen-Free Products

• # 2% of adults and 4 to 8% of children have food allergy in

United States

• || 38% of food allergic children have a history of severe reaction

• # It is estimated that 150 to 200 Americans die each year

because of allergic reactions to food.

• * 8 foods account for about 90% of allergic reactions:• Milk, Eggs

• Peanuts, Tree Nuts

• Fish, Crustacean Shellfish

• Soybean, Wheat

# Source: FDA – Food Allergies: Is my child at risk?|| Source: Adamis Pharmaceuticals, June 15, 2017; and Reuters, June 15, 2017.

* Source: United States Public Law C. Food Allergen Labelling And Consumer Protection

Act of 2004. Public Law 2004; 108-282:905-11. Gluten Intolerancefrom hospital diagnosis (USA)

Source: USDA:NASS; CDC

Market TrendRising Number of Recalls

• # Average cost of recall - $10 millions, in addition to brand

damage and lost sales.

Consumer reaction after a recall

• # 15% will completely discontinue purchasing the product

• # 21% say they will never buy anything from that company

again

• # 55% will switch brands temporarily

• ||1.9% to 7% decline in company stock price on next trading

day

• * up to 22% decline in company stock price within 2 weeks of

recall with poor recall execution

# Source: Food Safety Magazine – Recall: The Food Industry’s Biggest Threat to

Profitability|| Source: Investopdia – A Food Recall’s Diminishing Effect on Stock Price

* Source: Hygiene in Food Processing: Principle and Practice

Source: Food Allergy Research & Resource Program, University of Nebraska-Lincoln

Market TrendCauses of Recalls

• Rising Recalls, undeclared allergen is the number 1 reason for past 3 years.

• Wrong packaging or label as main reason of undeclared allergen.

• 35% of these recall could be prevented with Label Assurance solution.

Source: Food Safety Magazine – Learning from FDA Food

Allergen Recalls and Reportable Foods

Source: United Sates Department of Agriculture – Food Safety and Inspection Service

Label Assurance

What is the Solution?

Label Assurance is a software solution for inspection and validation of printed labels against their intended SKU, helping

Food & Beverage manufacturers to ensure the right product is in the right packaging.

• 100% scanning of packaging barcode & data matrix OR / AND best before date + Batch / Lot Code of the package.

• Scan the static number – specific barcode, lot code and best-before date for specific package and order

• To ensure right product in the right packaging.

• Code scanning, not printed code verification.

• Developed based on Cognex Camera.

• Work by integrating into packaging line.

Right product in the right packaging

Confidential Property of Schneider Electric | Page 16

Solution FlowWork as Standalone Quality System

Configure master

data

Camera starts

scanning

barcode

Set up camera

Running

mode?

Good Read

No Read

Illegible

Continue to

produce

Signal to PLC if

the number is

above threshold

For QA &

Maintenance

purpose

Send Mislabeling data to the

Site

Eject item or

Stops line

Receipt of

mislabeling

information of

work order

Generate reports

and analytics

Accessible by

HTML5

Yes

No

Se

rve

r C

on

so

leL

ine

Con

so

le

Key in WO details

Start Order

Mismatch

Cut of the communication and

interlock with Camera, and no

signal to PLCBypass Camera

Line, Users, SKU – Barcode

Solution FlowIntegration with MES

Configure master

data

Camera starts

scanning

barcode

Set up camera

Running

mode?

Good Read

No Read

Illegible

Continue to

produce

Signal to PLC if

the number is

above threshold

For QA &

Maintenance

purpose

Send Mislabeling data to the

Site

Eject item or

Stops line

Receipt of

mislabeling

information of

work order

Send relevant

information to

MES / ERP

Generate reports

and analytics

Accessible by

HTML5

Yes

No

Se

rve

r C

on

so

leL

ine

Con

so

le

Key in WO details

Start Order

Mismatch

Cut of the communication and

interlock with Camera, and no

signal to PLCBypass Camera

Not in solution

scope

MES

Not in solution

scope

Minimum Hardware InvolvementLeveraging existing packaging line, PLC & printers

• The solution is designed to be

integrated into existing packaging

line.

• Label Assure Software Solution +

cameras to enable the full label

scanning capability, leveraging

existing packaging line, its PLC and

printers.

• Need not to purchase a separate full

label scanning station.

Full Label Check & Non-Compliance Containment100% check and flexibility on containment

• Scan every items passing

through the packaging line –

non-destructive, automated, live.

• Conditions can be set to trigger

the machine action on non

compliance:

o time interval for the trigger

o number of no read

o number of illegibility

o number of mismatch

• Signal to PLC will be triggered if

the number of non-compliance is

higher than setting for the given

time interval.

Real Time Scanning Data Update & AllocationUnderstand labeling performance & trend on work order & products

• Scanning data is updated real

time

• Current status and trend to

understand the operation

performance.

• Scanning data is linked to the

work order, batch / lot code, and

products.

• Production details can be key in

manually or get direct from MES.

Value Propositions

Brand Protection & Recall Prevention

Not fit for purpose

Undeclared allergens

Regulatory non

compliance

Contains the

Impacts of

Mislabeling

Reduce the

waste and

rework due to

mislabeling

Waste Reduction

• Accelerated NPI’s, with surge of new SKU’s

• Cans with missing labels led to mislabeling instances and product recalls

• Plant data collection was minimal and is extremely difficult to utilize for process optimization & continuous

improvement projects

• Existing SPC software out of date and not integrated with ERP system

• Finished product losses due to manufacturing issues

• Heterogeneous plant environments (and corporate organization)

• Less than 65% of accuracy in ‘master data’ – used across multiple systems

Customer ChallengesCampbell Soup Company

What it does:

• Verifies and Validates unit and case level labeling; Manual, semi-automatic and automatic in- / at-line

sampling with validation against specs; SPC and Capability Analysis; Data collection and warehousing

Architecture & topology:

• Model-driven MES; Quality & Operations with Skelta UI and business logic. ERP and HMI integration.

What makes solution unique

• Corporate, center led program around standardized solution; Quality solution with Mislabeling module;

Highly configurable solution with close integration of controls with MD MES in a high transaction rate

environment

What Schneider Electric Software products were used in the solution:

• MES Quality, MES Operations, Skelta Workflow, System Platform, WEI Professional

SolutionCampbell Soup Company

Page 25Confidential Property of Schneider Electric |

Campbell’s Soups

Realized Benefits

25% Decrease in

product give away

3% Reduction in

material costs

75 additional CI projects a

year (accelerate continuous

improvement efforts

How does Label Assurance helps?

• Human dependent / manual check

o packages look similar it might be possible for an

employee to take the erroneous package, label,

or roll of film, especially when in a rush.

o Might be difficult for employees to distinguish

packages or labels when they are handled in

bulk.

o Internal operation change, especially operation

interruption, increase the chance of error.

• Packaging material supplier fault

o Package and film roll / reel by supplier often

involves splicing (cut and join) multiple rolls /

reels together.

o Wrong packaging might mix inside a roll / reel of

packaging material or film.

How does Label Assurance helps?• Limitation of quality check and production inspection

o First-off inspection: simple check and signoff for

all changeovers and start ups – not fool proof for

human dependent issue listed above

o Quality check nature: by sampling, infrequent,

might miss out the problem in small order and

supplier fault

o Resource constraints: do not have enough human

resource to increase check frequency, do not

have the equipment to conduct continuous

check.

• Point system that does not integrate with each other

o Inkjet coders, recipe management system,

production system, quality system that work as

individual.

o Need to set up independently greater risk to

be set up incorrectly

Questions?

Page 28Confidential Property of Schneider Electric |