FSMA 204: What Food Manufacturers Need to Know and How ERP Solutions Can Help

Food safety has always been paramount in the manufacturing process, but with the Food Safety Modernization Act (FSMA) evolving, food manufacturers need to brace themselves for new challenges. FSMA 204 also known as the Food Traceability Rule, ushers in an era of enhanced traceability and in depth recordkeeping for high‐risk foods throughout the supply chain.

In today’s Softengine blog, we’ll explore what FSMA 204 entails, the critical requirements for compliance, and how modern ERP solutions such as SAP Business One can streamline the process and turn compliance into a competitive advantage!

Understanding FSMA 204

FSMA 204 represents one of the most significant updates to food safety regulations in recent years. While FSMA was originally enacted to shift the approach from reactive to preventive measures in food safety, section 204 focuses specifically on recordkeeping and traceability for foods that present higher risks to public health.

What Is FSMA 204?

FSMA 204 is the FDA’s Food Traceability Final Rule. Its objective is twofold:

• Rapid Response: Enable swift identification and removal of potentially contaminated food from the market.
• Enhanced Transparency: Maintain detailed records that trace every step in the food production process.

Under FSMA 204, any business that manufactures, processes, packs, or holds foods on the FDA’s Food Traceability List (FTL) is required to maintain records with Key Data Elements (KDEs) for Critical Tracking Events (CTEs) throughout their supply chains.

Key Objectives of FSMA 204

• Prevention of Foodborne Illnesses: By ensuring every critical event from harvest to processing is documented, the FDA can quickly identify sources of contamination.
• Faster Recalls: In the event of an outbreak, electronic sortable spreadsheets with real-time data allow companies to recall affected products within a dramatically shortened timeframe.
• Supply Chain Accountability: FSMA 204 holds all supply chain partners accountable by standardizing data collection at each stage, from the farm to the final consumer.

The FSMA 204 Food Traceability List (FTL)

One central component of FSMA 204 is the Food Traceability List (FTL). The FTL identifies foods considered high risk for foodborne illnesses. Manufacturers and processors must closely examine their product portfolio to determine whether FSMA 204 applies to them.

What Foods Are Covered?

Foods on the FTL are considered “high-risk” due to their susceptibility to contamination. These typically include:

• Dairy and Cheeses: Soft, semi-soft, and fresh cheeses (excluding frozen or shelf-stable varieties)
• Egg Products: Shell eggs produced by chickens
• Nut Butters: Including but not limited to almond, peanut, and cashew butters (excluding soy or seed butters)
• Fresh Produce:
  • Cucumbers, herbs, leafy greens (fresh and fresh-cut), melons, peppers, sprouts, and tomatoes
  • Tropical tree fruits and fresh-cut fruits and vegetables
• Seafood: Finfish (fresh, frozen, or smoked), crustaceans, and molluscan shellfish
• Ready-to-Eat Foods: Deli salads that are refrigerated

Importance of the FTL

Understanding whether your products fall within the FTL is crucial because it determines your traceability recordkeeping obligations. For companies with mixed portfolios, careful product review is necessary to apply enhanced protocols only where required, thus avoiding unnecessary overhead for products that are not considered high risk.

Critical Tracking Events (CTEs) and Key Data Elements (KDEs)

FSMA 204 mandates that manufacturers track several critical points in the supply chain—referred to as Critical Tracking Events (CTEs). Along with each CTE, businesses must record specific pieces of data known as Key Data Elements (KDEs).

What Are Critical Tracking Events (CTEs)?

CTEs are defined milestones in the food’s journey from the source to the consumer, where detailed recordkeeping is essential. They include:

Harvesting

• Activities: Removing raw agricultural commodities from the farm
• Focus: Ensuring that the initial source data (dates, field locations, and farming practices) are documented

Cooling

• Activities: Reducing the temperature of raw commodities through processes such as hydrocooling or vacuum cooling
• Focus: Recording temperature data and time of cooling as part of the product’s safety validation

Initial Packing

• Activities: Packaging raw products for the first time
• Focus: Documenting the packaging process and assigning initial traceability codes

First Land-Based Receiver

• Activities: The first entity taking possession of food from a fishing vessel or other sources on land
• Focus: Capturing shipment arrival details and product conditions at the reception point

Shipping and Receiving

• Shipping: Arranging the movement of products between locations
• Receiving: Collecting and verifying product data upon arrival
• Focus: Recording shipping dates, origin and destination, and condition upon shipment and receipt

Transformation

• Activities: Changing or processing the product (such as repacking, relabeling, or formulating new products)
• Focus: Assigning a new Traceability Lot Code (TLC) if necessary, and documenting all changes in processing

What Are Key Data Elements (KDEs)?

KDEs are the specific data points that need to be captured at each CTE. These include, but are not limited to:

• Location Details: Exact geographical data of production, packaging, shipping, and receiving points
• Date and Time Stamps: Precise records of when each event takes place
• Quantitative Data: Product quantity, unit of measure, and batch or lot numbers
• Traceability Lot Code (TLC): A unique identifier (often a combination of GTIN and lot number) assigned at critical points such as initial packing and transformation

By ensuring that all these elements are captured and easily accessible, FSMA 204 aims to create a fail-proof system that can rapidly provide the FDA with comprehensive information during an outbreak or recall.

Compliance Timelines and Challenges

When Must Companies Comply?

The final rule for FSMA 204 took effect in January 2023, but companies have a transitional period until January 20, 2026, to become fully compliant. This period provides time for businesses to assess their current recordkeeping systems, invest in proper technology, and train their staff.

Challenges in Adopting FSMA 204

While the objectives of FSMA 204 are clear, food manufacturers can face several hurdles when implementing these new requirements:

• Data Overload and Fragmented Systems: Many companies still rely on manual recordkeeping or outdated legacy systems. Consolidating data from multiple sources into a centralized system can be challenging.
• High Volume of Information: The need to capture detailed KDEs at several points across the supply chain means that small and mid-sized companies must adjust significantly to manage the increased volume of data.
• Time Constraints: The requirement to produce an electronic sortable spreadsheet with all traceability data within 24 hours of an FDA request demands significant investment in automation and data integration.
• Training and Culture Shifts: Employees must be re-trained to understand and adhere to new compliance protocols, and companies must foster a culture of meticulous recordkeeping and proactive food safety management.
• Cost Considerations: Transitioning to a modern, digital system can involve significant upfront and ongoing costs, making it imperative to assess return on investment in the context of enhanced food safety and prevention of recall-related losses.

How ERP Solutions Can Streamline FSMA 204 Compliance

Modern Enterprise Resource Planning (ERP) systems can be a game changer for food manufacturers faced with FSMA 204’s rigorous requirements. By centralizing data, automating recordkeeping, and providing real-time visibility across the supply chain, ERP systems offer multiple benefits.

Advantages of ERP Systems for FSMA 204

Centralized Data Management

ERP solutions consolidate information from disparate systems into a single repository. This centralization enables quick retrieval of traceability data, ensuring that the correct KDEs for every CTE are readily accessible.

Real-Time Monitoring and Alerts

Automated ERP platforms can track key events as they occur and send immediate notifications when deviations are detected. This real-time capability is vital for responding within the FDA-mandated 24-hour window.

Enhanced Traceability and Recall Management

ERP systems ensure comprehensive tracking of product movement throughout the supply chain. In the event of a recall, manufacturers can quickly identify affected batches through unique traceability lot codes and accurately communicate with stakeholders, reducing recall times from weeks to days.

Improved Accuracy and Reduced Human Error

Manual data entry is prone to errors that can lead to non-compliance and costly recalls. ERP automation minimizes manual input, ensuring data is recorded accurately and consistently.

Seamless Integration with Other Systems

Modern ERP solutions integrate smoothly with other critical systems—such as Warehouse Management Systems (WMS), Manufacturing Execution Systems (MES), and Supplier Management Platforms—creating a cohesive, interoperable environment. This integration enables the uniform capture of KDEs across the entire supply chain.

Customizable Reporting and Documentation

ERP systems provide powerful reporting tools that can generate detailed, customizable reports tailored to FDA requirements. Whether it’s an electronic sortable spreadsheet or a dynamic dashboard, these reports support both internal audits and external regulatory reviews.

ERP Solutions in Practice: SAP Business One as an Example

One ERP solution that understands and delivers these benefits is SAP Business One. This ERP solution designed for the small to midsize business, renowned for its robust capabilities and scalability, has been effectively deployed in the food manufacturing sector to ease FSMA 204 compliance.

Key Features of SAP Business One for FSMA 204 Compliance

Automated Batch and Lot Tracking

SAP Business One’s integrated batch tracking functionality allows food manufacturers to monitor each production lot from raw material sourcing through the finished product. Using unique traceability lot codes, companies can ensure comprehensive data capture at critical tracking events.

Comprehensive Inventory Management

The platform’s inventory management module helps maintain accurate records of all raw materials and finished goods. This ensures that KDEs, such as quantities, unit measures, and product origins, are consistently tracked, simplifying audit processes and recall management.

Streamlined Supplier and Partner Integration

With SAP Business One, food manufacturers can seamlessly integrate with their supply chain partners. The system’s robust data exchange capabilities ensure that every stakeholder from farmers to distributors, captures and shares the required traceability data, enhancing end-to-end visibility.

Real-Time Reporting and Analytics

The platform provides real-time dashboards and automated report generation. In the event of an FDA inquiry, manufacturers can instantly access detailed electronic sortable spreadsheets that comply with FSMA 204 requirements.

Enhanced Document Control

SAP Business One helps centralize and secure documentation, ensuring that all records related to CTEs, HACCP/HARPC plans, and supplier verifications are stored in a readily accessible digital format.

Benefits for Food Manufacturers

By leveraging SAP Business One, food manufacturers gain the ability to:

• Reduce Compliance Risks: Automated, real-time traceability reduces the likelihood of errors and non-compliance penalties.
• Streamline Operations: Centralized data and integrated processes streamline workflow from production to distribution.
• Improve Efficiency: Quick access to detailed traceability records accelerates response times during recalls and audits.
• Enhance Consumer Trust: Transparent and reliable supply chain management instills greater confidence among consumers and business partners.

The Broader Impact of FSMA 204 on the Food Manufacturing Industry

FSMA 204 not only strengthens the safety of food products but also offers a strategic opportunity for manufacturers to streamline operations and build a resilient supply chain. Here are some of the broader benefits:

Improved Public Health and Consumer Trust

By enabling rapid identification and removal of contaminated products, FSMA 204 minimizes the risk of foodborne illnesses, safeguarding public health and boosting consumer confidence.

Operational Efficiency and Cost Savings

Implementing automated traceability systems reduces manual labor, decreases the possibility of errors, and streamlines the recall process, ultimately saving costs and reducing downtime.

Enhanced Competitive Advantage

Companies that are early adopters of advanced ERP systems often achieve superior supply chain transparency and operational efficiency. This increased visibility can translate into stronger partnerships, higher customer satisfaction, and improved market positioning.

Digital Transformation Catalyst

The compliance requirements of FSMA 204 force organizations to reexamine their IT infrastructure and adopt cloud-based, data-centric solutions. This digital transformation can lead to further innovations in areas such as predictive analytics, quality control, and integrated supply chain management.

FSMA 204: What Food Manufacturers Need to Know and Why an ERP Solution Can Help with Compliance and Traceability

FSMA 204 marks a transformative shift in food safety standards, placing a heavy emphasis on traceability and timely data reporting. By requiring the detailed documentation of Critical Tracking Events (CTEs) and Key Data Elements (KDEs), the rule aims to prevent foodborne illnesses and streamline recalls to protect public health.

For food manufacturers, the key to success lies in proactive compliance. Investing in modern ERP solutions, like SAP Business One, can revolutionize how traceability data is captured, integrated, and reported. With the right technology and robust traceability plans in place, manufacturers can not only meet regulatory requirements but also enhance overall operational efficiency, build consumer trust, and secure a competitive advantage in the marketplace.

The journey to FSMA 204 compliance may be challenging, but it also offers a strategic opportunity to modernize operations and build a more resilient, transparent food supply chain. Embrace the digital transformation today to secure a safer tomorrow for your business and your consumers.

Softengine is Here to Help!

Partnering with Softengine, a Gold Partner for SAP and Acumatica, for your ERP implementation not only streamlines the data migration process but also ensures a seamless transition to your new ERP platform. Our team’s expertise, dedication, and commitment to customer success make us the ideal partner for organizations seeking to unlock the full potential of their ERP investment and scaling in the digital economy. Contact us to learn more about how our clients utilize ERP to enhance and scale their organizations, and see our solutions in action for yourself!

FSMA 204 FAQs

What is FSMA 204 and why is it important for food manufacturers?

FSMA 204 is a section of the Food Safety Modernization Act that mandates enhanced traceability and recordkeeping for high-risk foods. It is crucial because it allows for the rapid identification and removal of contaminated products, thereby protecting public health and reducing the risk of widespread foodborne illness outbreaks.

Which foods fall under the FSMA 204 Food Traceability List (FTL)?

Foods on the FTL include soft cheeses, shell eggs, nut butters, fresh produce like cucumbers, leafy greens, melons, peppers, sprouts, and tomatoes, as well as certain seafood products and ready-to-eat deli salads. Each category has specific criteria defined by the FDA.

What are Critical Tracking Events (CTEs) and Key Data Elements (KDEs)?

CTEs are key moments in the supply chain where detailed traceability is required (e.g., harvesting, cooling, initial packing, shipping, receiving, transformation). KDEs are the specific pieces of information—such as location data, dates, and traceability lot codes—that must be recorded at each CTE.

How does an ERP system like SAP Business One help with FSMA 204 compliance?

ERP systems streamline data management by centralizing traceability records, automating the capture of critical data, and integrating seamlessly with other systems. For instance, SAP Business One can provide real-time monitoring, automated batch tracking, and rapid recall reporting—all vital for meeting FSMA 204’s stringent requirements.

What steps should a food manufacturer take to ensure compliance with FSMA 204?

Key steps include conducting a comprehensive audit of current processes, developing a robust traceability plan, investing in a modern ERP solution that integrates with your supply chain, collaborating closely with suppliers and other partners, and providing continuous training and system upgrades to adapt to evolving regulatory requirements.

What are the penalties for non-compliance with FSMA 204?

Non-compliance can result in severe penalties, including fines, mandatory recalls, facility suspensions, and even criminal charges if repeated or negligent lapses occur in recordkeeping and traceability. Adhering to FSMA 204 is not only a regulatory necessity but also an essential business risk management strategy.