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Better Inventory Tracking Needed


Actavis is one of the world’s leading developers of first class generic pharmaceuticals. The company has locations in over 30 countries and has over 11,000 employees. The company was founded in Iceland in 1956, where its head office is still located.

Actavis has an aggressive growth program and has acquired more than 20 companies in the last seven years. One of the acquired companies is located in Elizabeth, New Jersey. After completing the purchase, Actavis reviewed the Elizabeth location’s inventory and manufacturing control practices and decided that an upgrade was necessary.

The goal was to introduce a system that would provide end-to-end electronic tracking of raw materials
from receipt through consumption in pre-weigh. The selection criteria was as follows: the system must
be able to create an environment that eliminated any holes in the process; the system must be able to
be validated; and the system must provide a justifiable return on investment (ROI).

CMS has been a great improvement to our Receiving, Sampling, and Dispensing processes thus far. The system has improved efficiency, accuracy, and control. Furthermore, there is a lot of anxiousness to move forward and utilize CMS in additional processes, as well as controls. Besides actually getting raw materials to the facility, it’s a comfortable feeling, knowing your inventory is accurate and being policed.

Danny Allis, Manager

The ROI should come from three main areas: allow for the re-allocation of unnecessary personnel brought on by the introduction of electronic signatures, eliminate costly time spent investigating inventory discrepancies and increase overall work flow efficiencies.


Manual data recording has potential for error


Actavis used a complicated system of manually produced paper documents to identify its inventory location / quantities and to track inventory movement and consumption. This information was stored primarily on paper cards and subsequently transferred to their ERP. Unfortunately, the information on the cards was not always as accurate as was required. This in turn caused their ERP to have inaccurate information, causing issues with production planning as well as the FDA.

These inventory cards could also be easily misplaced, causing everything to stop while the card was located. In addition to having paper cards as the primary inventory control system, all production (pre-weigh) records were manually produced and recorded. This manual system required duplicate work and the reentering of information into various systems.

The information produced by the manual system was time consuming to produce, collect and verify. The potential for error was large.


The Solution: Go Electronic


Actavis looked to the industry for a software that would eliminate most of their paperwork, while meeting regulatory requirements including FDA CFR 21 Part 11. The system they needed had to interface to and work with their existing MFG Pro Enterprise Resource Planning (ERP) software to improve its accuracy, efficiency and value.

The company developed a comprehensive systems requirement and requested a number of companies
to present them with system proposals. After a review of the various companies’ solutions, Actavis selected Mar-Kov CMS, proposed by Valdata Systems, a Fairfield New Jersey based systems integrator.




Valdata Systems, a member of The Winter Group (, specializes in providing turn-key manufacturing automation systems. Turn-key systems include software, hardware, interfaces to existing host ERP systems and training. Valdata’s primary product line is a Chemical Management System (CMS) developed by Mar-Kov Computer Systems ( Valdata Systems has been installing electronic / paperless systems since 1997, and has systems in a wide variety of industries including Flavor & Fragrance, Pharmaceutical, Cosmetic and Vitamin.




The Chemical Management System (CMS) is a client / server application that bolts onto existing host ERP systems through thoroughly tested interfaces. It can be installed thick (installed on a local PC) or can be run thin through Citrix or Microsoft Remote Desktop. At Actavis, the application runs on a variety of networked IBM personal computers, Motion Computing wireless tablets, Pro-Tech harsh environment computers and Symbol wireless hand held terminals, all of which communicate with a centralized database server.

The CMS system is integrated with the Actavis host ERP, MFG Pro. The system communicates extensively with peripheral equipment such as bar code scanners, bar code printers and directly interfaces to scales.




When raw materials arrive at the Actavis receiving dock, the receiver enters the purchase order number into the Chemical Management System. Through its host ERP interface, CMS retrieves from MFG Pro all pertinent information about the PO. The receiver verifies that the correct materials and quantities are being received and enters this data into the CMS.

CMS also verifies that the correct items/qtys are being received. Once the receipt is complete, CMS posts the receipt information back to MFG Pro. After a successful post, CMS commits the transaction locally and then produces individual license plated bar code labels for each container, including labels for sample containers. These containers are marked as HOLD for testing within the system and cannot be utilized in any preweigh operation until they are released through the LIMS portion of CMS.As an added step, CMS can also produce small MSDS and CofA labels that can be affixed to the MSDS / CofA documents that came with that shipment. These documents can then be scanned and electronically attached to the received containers.

These images can be viewed at any time within CMS via right clicking on a container and selecting the ‘view MSDS / CofA’ option. The labels produced by CMS (raw material and sample containers) include a bar code. This bar code is a unique license plate for each container. This ‘license plate’ allows the system to perform individual container tracking and tracing, which has numerous advantages over item / lot / location tracking. Once the receipt is complete, containers are moved to ‘legal’ locations via hand held wireless scanners.

CMS enforces the placement of containers to specific locations based on attributes of the item. To move a container, warehouse personnel scan the bar code on the container and then the bar code at the destination location. Additionally, because all items are marked electronically as quarantined until approved, containers need not be segregated in a quarantined location, although Actavis elected to continue this practice. Warehouse functionality within CMS extends well beyond material receipt and placement. Actavis uses other functions including inventory cycle counting. Cycle counting is carried out at any time on any number of locations using the hand held data terminals. Not only is the counting process simplified but it can also be performed without disrupting any other ongoing operations. Once a history is built up of successful cycle counts, Actavis expects to eliminate annual physicals. The methods employed by Actavis for warehouse operations have eliminated the manually updated ‘cards’ and eliminated the redundant data entry back into MFG Pro. The warehouse operations have greatly increased in efficiency since installing the system.




Once containers have been received in WMS and sample container labels (collectively known as the test set) are automatically generated, CMS sends electronic notifications to the QC department letting them know that samples must be taken.

CMS produces the appropriate number of sample container labels based on the material. These samples can include, but are not limited to, analytical, micro and retain. CMS randomly chooses the containers to be  sampled when statistical sampling is in effect.

Once sampling is completed, depending on the material type (DEA / API / etc.), the sample weight must be determined via placing the sample container on a scale. DEA regulations require that all material be accounted for. Determining the weight of the sample enforces this requirement. The sample quantity is equally and automatically deducted from the random list of containers from which the sample was taken.

Once the samples are delivered to the QA department, they are scanned into that location. As a ‘leave no open holes’ approach, samples can only be approved from within an area designated as being able to approve such samples. The software has the ability to specify the testing requirements for each material. Items can have ranges set for such attributes as potency, particle size, etc. QA test results can be entered and verified against these acceptable ranges prior to material release.

In Actavis’ case, QA test results are recorded in another manual system and CMS is utilized for the purpose of sample approval only. The process of material release is straight forward and requires a number of steps to be completed prior to the release or rejection of material. Some of those steps are mentioned above but an additional required step is that retains be placed into a special retain warehouse. This retain warehouse is a logical warehouse within CMS and emphasizes the concept of enforcing SOPs.

In order to approve a sample, all sample containers belonging to that sample set must be approved. To approve each sample, the sample container bar code is scanned and the container is marked as 1st quality. This continues for each sample in the set until a final approval is given. The final approval involves approving the test set and assigning a re-test date as well as a destruct date.

Once approved, electronic notification is automatically sent to the person who initiated the creation of those sample labels. Generally speaking, this is the warehouse operator. Upon receiving such notification, the warehouse operator is then free to move materials to another ‘legal’ location.




Once production requirements have been scheduled in the MFG Pro ERP system, it produces the required work orders and ingredient Bill-Of-Materials. This information is automatically downloaded to CMS, which then takes full responsibility for controlling the pre-weigh manufacturing process and collecting, recording and validating all manufacturing data.

Prior to pre-weighing items, operators utilize a staging function within CMS warehousing. Tow motor operators access this screen on the wireless tablet computers affixed to their fork trucks. This function lists all items that are required for pre-weigh in order of priority. Although some customers stage material for multiple orders at one time, Actavis only stages material for one order at a time. The staging process is extremely helpful in that once an item is selected\ the system shows all available containers in FEFO (first expired first out) order. As a design element in CMS, by displaying items in FEFO order rather than FIFO order, the amount of container re-testing is reduced substantially. Once containers have been staged (i.e. moved) to the pre-weigh area, weighing can begin.

Instead of paper batch sheets pre-weigh operators are assigned electronic work orders that contain the required formula and Bill of Materials. Through carefully designed system prompts, the system prompts and then polices the operators through the pre-weigh process, following Actavis’ standard operating procedures. If there is an error performed at any time, the system stops and will not allow the operator to proceed further until the problem has been corrected.

To begin weighing an order, the order is selected and made ‘current’. Operators are then prompted to scan the bar code license plate label on the raw material ingredient container to verify that the correct ingredient and lot have been selected. Once scanned, if the item is incorrect, the system outright rejects the selection and will not allow the operator to continue, hence the policing. If the item is correct but there is a raw material lot that has a FEFO date closer than the one selected, the system will not allow the ‘newer’ container to be used without authorization. If the container is past expiration or if the quality code is incorrect, the system will also outright reject that container.

Once an appropriate container has been selected, the system prompts the user to scan the scale to be used for the weighment. Upon scanning the scale, the system automatically zeros the scale through the direct scale <> PC interface. The operator is then instructed to place the empty container on the scale and press OK. This action causes the system to automatically record and execute a tare. If by chance the scale is empty during this step (i.e. the tare is ZERO), the system will warn the operator that the tare is incorrect.

After the tare is established, the system prompts the user to begin weighing the item. As product is added to the empty target container sitting on the scale, the system displays a bar graph indicating the pour completion percentage. This is possible because the scale is connected directly to the system. If the pour is under weight, the system will accept the weighment and show that there is a balance that still needs to be weighed into another container. The system will not allow for an item to be over-weighed, under any circumstance.

Upon completion of the pour, the system prints another bar code label similar to the ones produced in receiving. The difference is that this container is allocated to the order for which it was weighed and cannot be used for anything else. CMS continues to prompt and police users through each item in the order until the order is completely weighed out.


Notable Features


Out of the many functions available within the Manufacturing Execution System, there are a few notable features utilized by Actavis that have assisted them considerably with investigations:

  • Purity Adjustment. CMS automatically adjusts the quantity required of active ingredients based on their purity. It also adjusts the filler to compensate.

  • Adjust Container When a source container is emptied, the user has the ability to zero empty the container. Note that the amount that can be adjusted out is policed as a percentage of the original container amount. Without authorization, users could not ZERO large amounts of material.

  • Correcting for Tare Actavis has a requirement that the tare be verified for DEA Products. CMS enforces this by requiring that Gross Weight and Tare be entered at the time of Receipt, and that when the empty container be reweighed when empty. Any difference between the empty weight of the container and the tare weight originally received becomes an adjustment to quantity received. This adjustment appears in their lot reconciliation report, as well as other reports.


The Results: Actavis achieves what it set out to do


CMS has eliminated the need for employees to record data manually. The system has eliminated most of the paperwork, with its potential for recording and transcription errors. The time that has been saved by eliminating the paperwork allows the employees to increase the number of transactions they produce
each day.

CMS produces a validated electronic audit trail record of all transactions to prove how it knows the data is accurate. This audit trail helps to ensure that the data exchanged with MFG Pro is accurate. CMS has eliminated the operator’s ability to make a bad batch that is caused by the operator selecting an incorrect ingredient, the operator selecting an incorrect lot or the operator weighing an incorrect

CMS ensures that Actavis constantly produces the highest quality product possible. It protects the company’s reputation while reducing its risk for legal actions based on bad product. The fully integrated system has been validated to meet the CFR 21 Part 11 requirements and has allowed Actavis to dramatically increase its production output with the same number of overall personnel.
Actavis plans on rolling out CMS into all aspects of its Elizabeth plant within the next 12-18 months.

In 24 hours, Vittles put Chinook back in the black, and in just a few months, Vittles helped us transform Chinook and revolutionize the way we manage our business.

— Kraig Schexnayder, COO, Chinook Seedery

Chinook’s Instant Return to Profitiablity with 24 Hour ROI on Mar-Kov’s ERP.


Mark Pettyjohn satisfied his constant craving for a tastier, healthier sunflower seed and in the process, he created Chinook Seedery to give Americans the best sunflower seed experience possible. But to keep selling to Chinook’s sunflower seed-afficionados, Mark had to turn his young company into a sustainable business with consistent profits, increased sales and consistently happy customers.

Mark knew exactly how to make great sunflower seed snacks, but he had more
to learn about managing his food manufacturing business. After meeting Kraig
Schexnayder, an entrepreneur and systems integrator, Mark was convinced Kraig had the food industry-specific experience Chinook needed. After all, Kraig had
just helped Louisiana-based Sno-Balls To Go! grow from $900,000 to $3.8 million in 18 months. Kraig promised Mark he’d “transform” Chinook and Mark believed him. However, Mark was surprised when Kraig told him he couldn’t make that happen without Mar-Kov’s Vittles, an MRP software created by food industry veterans for food manufacturers.


Vittles – A Crash Course in Food Manufacturing


Kraig first turned to Mar-Kov and Vittles after being asked to grow Sno-Balls because although he’d successfully run the printing company he’d founded for
25+ years, he was new to the food business. As much as Kraig knew about managing costs and integrating processes to ensure long-term profitability, he immediately recognized batch manufacturing food comes with a specific set of challenges and regulations.

“Mar-Kov and Vittles gave me a crash course in food manufacturing”

Kraig Schexnayder, COO, Chinook Seedery

“Mar-Kov and Vittles gave me a crash course in food manufacturing and everything that’s unique to food such as recalls, recipes and what the Vittles data can tell you about your batch processing company,” says Kraig, Chinook’s COO. “Mark’s a true visionary, but Chinook, like Sno-Balls, desperately needed real-time, accurate data on which to base crucial business decisions.”

Mark hired Kraig and implemented Mar-Kov’s Vittles after Kraig explained that together, he and Vittles would deliver an extraordinary 24-hour ROI and a virtually instant return to profitability. Together, Kraig and Vittles replaced the 1.5 part-time administrators that had manually created and handled every single piece of documentation required to run Chinook.

On a daily basis, Kraig relies on Vittles to run Chinook more efficiently and costeffectively. Consumer, retail and distributor orders are used to identify and purchase the raw ingredients required. Those orders are also used to create the production, packaging, order assemblies and shipping schedules as well as all related invoicing. Vittles automatically cascades the data from the initial entries across the system to save time and minimize data input errors. On command, Vittles uploads that data to QuickBooks so that Kraig and the senior managers can drill down for details about vendors, deliveries and more. Vittles is used to help identify business issues that need to be addressed before the impact is compounded over time.

While customers generally received the correct orders on time, they occasionally
arrived late, incomplete, short or without the right mix of SKUs (flavours, 4 or 1.5 ounce). Chinook paid distributors a penalty, up to $100, for every late order, even if the delay was beyond Chinook’s control, for example, the freight company’s truck broke down. Imprecise, late invoices were also an issue and had a negative impact on Chinook’s cash flow.

“Vittles maximizes production and minimizes cleaning to up revenue and cut costs.” – Kraig Schexnayder, COO, Chinook Seedery

“Over time, customers lose faith when you make mistakes and the penalties will add up,” says Kraig. “Chinook’s seeds are unique but we don’t want consumers or retail and distribution customers looking for an alternative. New customers grow our business but repeat business sustains us day to day.”

Vittles frees Mark to focus exclusively on sales, forecasting and cash flow models and gives Kraig the accurate, current data, he needs to manage daily costs and operations.

“Vittles gives us the historical data we need to look back, learn and plan ahead,” says Kraig. “With the paper, the data was there, somewhere, we just couldn’t get to it quickly or easily.”

Over time, Chinook will continue to rely on Vittles’ cost-of-goods reports to help them achieve the margins required for long-term sustainability and if necessary, identify the departments and operations that need extra attention.


Scheduling to Maximize Production


Chinook now has the transparency and visibility needed to efficiently schedule the
production of its six flavours. Before Vittles, the company might run up to three flavours daily sacrificing up to three hours of production because it takes at least one hour to clean and remove all seasonings from the equipment between flavours.

“Production generates income and cleaning is a cost – Vittles helps us maximize
production and minimize cleaning to increase revenue and reduce costs,” says Kraig.

Chinook’s freight typically accounts for 10 to 30% of total costs and Kraig expects that to drop as he now has the information he needs to make better use of LTL (less than load) and 3PL (third party logistics) providers. Likewise, raw ingredients, 33%of total costs, should fall as Chinook negotiates orders in bulk to benefit from volume discounts.


Replicable Recipes & Total Transparency


Vittles, which first taught Kraig the value of recorded recipes, is now home to Chinook’s recipes. While Chinook’s six flavours require relatively few ingredients, customers expect each of their favourite flavours to taste exactly the same every time.

To date, Chinook has seen little staff turnover, but before Vittles, their lead mixer relied exclusively on his experience and intuition. Today, all of Chinook’s employees can successfully replicate each flavour with Vittles.

Even more importantly, Vittles records every detail pertaining to Chinook’s
ingredients, production and shipping data. As a result, Chinook is FDA Food Safety Modernization Act compliant and has the data required to track products in the unlikely event of FDA-mandated and voluntary recalls.

“In 24 hours, Vittles put Chinook back in the black, and in just a few months, Vittles helped us transform Chinook and revolutionize the way we manage our business,” says Kraig. “As a result, Chinook will be providing the super healthy, ultra tasty sunflower seeds people have fallen in love with for years to come.”

ays at our fingertips,” says Chaz. “Mar-Kov is 100% there for us and always ready and willing to help.”