Ernie Redfern, CIO

Using RFID for Regulatory Compliance

Who is Blommer Chocolate Company?

•Founded in 1939•Four generations in chocolate•Family owned and operated•Four plants strategically located:

Chicago, ILEast Greenville, PA

Union City, CACampbellford, Ontario

Company Overview

Largest Cocoa Bean Processor in North America Currently - 225,000 Metric Tons (8% of World Crop)

Largest Presser in North AmericaSupplying to All Major Cocoa Butter and Cocoa Powder

UsersLargest Fully Integrated Chocolate & Cocoa Manufacturer

in North America supplying:Confectionery, Baking, Dairy and

Pharmaceutical/Cosmetic IndustriesLowest Cost Manufacturer in North AmericaSole Focus is Cocoa Business

Some of The Brands We Supply

Bioterrorism Act Title-306 :Establishment and Maintenance of Records

2002 - Congress passed the Public Health Security and Bioterrorism Preparedness and Response Act

June 12, 2002 President Bush signed into law “THE BIO-TERRORISM ACT” (BTA)

HIGHLIGHTS OF BTA III:SUBTITLE-A SECTION-306Start of Compliance date December 9, 2005Records must be kept for 2 yearsAvailable to FDA in 24 hoursCompanies with Multiple Manufacturing

locations do not need to have duplicate Records

FDA does not Require Specific type of Forms or Systems to Maintain Records

Tracking of samples, trade show merchandise, give aways.

BTATitle – III : Subtitle-A Section - 306

Who need to be in compliance?Manufacturers ProcessorsPackersDistributorsReceiversHoldersImporters

BTATitle – III : Subtitle-A Section - 306

Key Provision of Record Keeping:Two Years of RecordsIn processImmediate Previous SourcesImmediate Subsequent recipients

Why Blommer Chocolate Company Implemented RFID InitiativeCompliance to new regulations within our overall

inventory control strategyExtensive use of outside logistics partners put

greater burden on record keeping to meet new requirementsNeeded to track when products left our custody (shipment

to outside warehouse).Needed to track when products returned to our custody.

Interplant shipments needed greater trackingNeeded to know when product left our custody for

shipment to customersTracking Incoming Raw MaterialAutomatically relieve raw material in batching

processAccurate Inventory Counts

Why Blommer Chocolate Company Implemented RFID Initiative … continued

We were NOT mandated by any customer to implement an RFID strategy in order to integrate with their system

Food industry has no standards (schemas) on data exchange universally adopted

RFID strategy is viewed as a way of cutting costs and augment increased record keeping burden while allowing for future expansion without additional headcount

Non-Liquid Products We Ship Tracked By RFID

Bulk Product Tracked by RFID

What We Do Not Track with RFIDLiquid Shipments (tankers)Silos

Cocoa BeansSugar

Raw MaterialLiquid form pumped directly to holding tanks

RFID & Shipment to Outside WarehouseGoal: Eliminate manual tracking of

product movement and automatically generation of shipping documents while complying with BTA accountability.

Solutions: Reserved shipping docks for warehouse

shipments and put in RFID tunnels. Operators open dock, move product into

trailers, and close dock – bill of laden automatically prints.

Bar coding of trailer seals helps. We know when product was loaded and trailer

sealed (date and time).

RFID & Shipment to Outside Warehouse

(Receipt by Outside Warehouse)Installed VPN tunnel at outside warehouse.Installed Access Points at warehouse as

extension of Blommer Chocolate’s facility.Incoming trailers scanned & palettes

scanned while being offloaded in real time (date and time annotated automatically).

We know when product returns to our custody and what is in-transit.

RFID & Batch Control (Lot Control)Goal: Track raw material usage throughout batch

cycle to include lot number traceability and rework control

Solutions:Rework tagged with RFID label Install RFID Tunnel in Paste/Mixing Room

Provides visibility of product moving to production area.Provides accurate lot number information associated with

raw material.Alerts operator through visual signal if raw material or

rework is not released from QC hold.Alerts operator through visual signal if wrong raw material

is being moved to production area.Operator annotates raw material/rework quantity

usage for each batch through handheld terminalsIntegrated rework into batch process as indented bill-

of-material

Paste Room RFID Tunnel

ROI Task # of

timesPrior to

RFIDPost RFID Savings

Mock Recall 21 per yr

12.75 hrs 3.25 hrs 9.50 hrs199.5 hrs yr

Transfer of product to outside warehouse (processing time)

59 trailers per day

1.17 hrs .57 hrs .60 hrs8,850 hrs yr

Interplant Transfer

8 per week

.75 hrs .34 hrs .41 hrs164 hrs yr

Tote Billing Accuracy

9,375 Lbs

$1.18 per lb $11,062 yr

What We Did RightSet everyone’s expectations.

We were going to go through growing pains.RFID was not going to be the savior for our

inventory problems.Appointed high level executive sponsorIncorporated bar code scanning with RFID.Ensured all our people were trained on new

system. Prototyped system in one plant before

implementing in all plants.Understood complexity of programming

that needed to be done for RFID tunnel integration.

What We Did WrongUnderestimated Printer IssuesInitially did not use motion sensors to turn

on/off RFID tunnelOverestimated RFID equipment (readers and

antennas) ability to work in manufacturing environment

Overestimated out vendor’s ability to provide technical support for an RFID solution“Newness” of technology limits number of

“experts” out thereForced to write some of the integration internally

FDA: Contaminated feed could affect farms nationwide

POSTED: 12:10 a.m. EDT, May 2, 2007 – CNN.COM

• Contaminated feed found in 38 Indiana chicken farms; more farms likely affected• Feed contains recalled pet food with tainted wheat gluten• No human illnesses have been reported related to tainted poultry feed • Reports of 4,150 dog and cat deaths related to pet food recall

Where we need to go …..

April 22, 202322

Infrastructure Used - For reference only - not an endorsementRFID Antennas & Reader

SAMSysRFID Printers

PrintronicsZebraDatamax

RFID Label – Printronix RFID SmartTagsWarehouse Management System Software

AGI Worldwide – FinalMoveERP – Microsoft Business Solutions Great

PlainsDatabase - Microsoft SQL Server 2005

Q&A