Given escalating health fears, new global policies and a highly competitive market, traceability is a consideration that food and beverage (F&B) businesses cannot afford to ignore. Issues such as safety and quality control in food production have become increasingly hot potatoes as the visibility of incidents such as food contamination, bioterrorism threats and livestock disease spreads, and concerns about topics such as labelling and the environment increase. In recent years, the emergence of stricter global legislation regarding traceability has also intensified the focus on product lifecycle transparency in order to safeguard the food chain.
In spite of the emphasis put on safety and quality control issues in the food industry, adoption of food traceability practices still appears to be limited. For many companies there are still question marks surrounding traceability, e.g what are the real benefits? how much is understood and where does one start? A more pressing question for some companies concerns who is accountable overall for the process and investment. When a final packaged product arrives on the table of a consumer, multiple companies will have usually been involved in the entire process, from raw material producers to wholesalers, transport companies and manufacturers. So who should own traceability?
Confusion can ensue as to what traceability really entails – a mindset that potentially results in some businesses placing the issue firmly in the ‘too hard’ basket.
Traceability is essentially the ability to drill into information that has been collected about a product’s movement and stored in back end systems by data capture tools, such as RFID tags. Whereas tracking mechanisms can only determine the status of a product’s progress as it moves downstream, more advanced traceability tools supply a holistic view of product movement, backwards and forwards across any step of the supply chain, from field to fork.
Compliance, efficiency, branding
The benefits of traceability can be significant. The most obvious, particularly for those engaged in exporting, is of course compliance with regulatory requirements in other geographies – vital for continued survival in an aggressive global market.
However, the gains are not only confined to this. There is much to be achieved in terms of operational efficiencies as a result of more transparent supply-side management processes. The Lawson company supports the view that greater visibility in this respect can significantly enhance efficiencies across an organisation - streamlining operational areas such as inventory management, supplier management, improving access to information and enhancing collaboration and relationships with trading partners.
A good example is the co-ordination of product movements through a supply chain. Where the chain of events is pre-defined, traceability supports the ability to ensure that each step is executed in the correct sequence, providing a smooth flow of product through the chain. A more externally focused consideration comes back to that of food safety. Where contamination scares arise and/or product recalls are necessary, it is vital to be able to obtain immediate information regarding the source of contamination, scope of products involved, suppliers involved, origin and end point of the products and SKU (stock keeping units) numbers. Traceability systems help address these issues with surgical precision, helping to reduce the risk of unnecessary recall costs and lost sales, as well as preserving brand integrity and consumer confidence. Major corporations have been involved in large scale, very expensive marketing campaigns to rescue their image following contamination scares.
Traceability can also act as a powerful and defining marketing tool to create product differentiation and strengthen brand loyalty.
Ten or more years ago, what was in a product, how good it was for you, its packaging process and where it came from barely registered with consumers. In fact, products considered healthy and natural were often poorly marketed and expensive. Yet in the US, this has now become an approximate $8bn industry. In the UK, customer research has shown that consumers are 60% more likely to buy organic food if it can be shown to be produced in the UK.
Growing consumer demand for information makes traceability a new golden opportunity to build business differentiators. If a company can utilise superior supply chain traceability capabilities to demonstrate product lifecycle and back up performance claims, it is in a position to offer products at a premium, or enhance their brand reputation.
Inhibitors and risks of ignoring traceability
We have all heard the “field to fork” statement and we know it is possible, so why isn’t it happening sooner rather than later?
Some visionary food and beverage companies have had the foresight to steer their companies towards supply chain traceability. Certainly some food industry sectors are more advanced – particularly meat and livestock sectors and some major retailers. Others, though, are not so well developed. They may have stand-alone systems to capture information in place, but not the ability to recall it instantly across an organisation. Even worse are those who are still working on paper based systems or manual spreadsheets.
One inhibitor is lack of awareness. From a legislative perspective, it has been suggested that many food & beverage producers are still unaware that the regulatory environment is changing and that they have little understanding of whether their systems would pass muster if put to the test.
Some schools of thought also suggest that the industry has a fixation on ‘productivity gains’ rather than what should be a priority – ‘market access’. Traceability is not seen to drive profits in quite the same light that productivity does. There is a great deal of effort going into making processes faster whilst many businesses neglect to look at the end game – access to global markets – for which traceability support is key. Another inhibitor beginning to emerge is the question around ‘who owns the problem and who will pay for the solution’? The biggest hurdle here is the lack of ability to put a fence around part of the solution and say “this is my bit, I will pay for it and you can pay for your section”.
Recent published reports have explored the accountability issue and looked at the suggestion of a consortium approach to traceability – a whole of government/whole of industry solution. Recommendations from these reports were put forward for a distributed data model where information is retained in situ by companies within their existing solutions. The supply chain is linked together by an umbrella application managed by a third party.
The advantage of this type of distributed data model is that the data sources often already exist so there is no need to develop a super data warehouse and replicate supply chain information. The rationale is that if each party is responsible for maintaining their own databases, with a single method for trace retrieval provided using data from multiple sources, then the ownership problem is reduced to something that is manageable for each organisation. This may be a good option for smaller, more resource-constrained organisations. However, despite a proposal for a trace task force and an agreement of the need to address the issue, there is insufficient support or commitment to take it forward. This leaves the task to each organisation in the food supply chain to make sure they have the best processes and systems in place to be able to protect their brand, and manage food safety concerns. The Trace Engine system from Lawson can provide this enterprise visibility, and link to various systems inside and outside of the enterprise, enabling food processors and manufacturers with a food safety and quality perspective that customers and retailers are demanding.
From an operational perspective, businesses can also potentially miss out on the bottom line benefits that would result from pin point accuracy supply chain management capabilities and better meeting consumer demands.
Key considerations
For businesses who are thinking of approaching a traceability solution, there are several steps important to success:
1: Being able to identify the trace line – where do products go to and from?
2: Assessing data aspects and identifying whether the business actually has the data available to satisfy that it can even do the trace adequately. Once the trace line is mapped from end-to-end, identify the parties involved and their ability to supply you with access to data. This is how a business can achieve a distributed data model.
3:Following identification of the trace and sources of data, it is then necessary to fill the gaps in that trace line – if filling the gaps is feasible. The ability to capture missing data (such as delivery time, providers of transportation, storage information, etc) is crucial.
4:It is then possible to move toward installing the ‘front end’ process – this is where a Trace Engine interface is pivotal in enabling immediate access to information from a user-friendly portal. Without a trace engine, a business can start down the traceability path, but will find it difficult to complete it.
Use of interface tools such as the Lawson Trace Engine helps companies in the food and beverage industries improve product quality as well as preventing and managing potential food safety and quality risks. It specifically helps companies strengthen and simplify the process of tracking ingredients and finished products through complex global supply chains.
At this stage there are few options for ‘true’ user interfaced trace engine solutions, with most products being bespoke solutions, or ‘middleware’ type applications that integrate disparate databases. Much energy has been invested in technology to capture data (e.g. RFID, barcoding, lab inspection systems) rather than a method for ‘sharing’ information. However, a new generation of web browser-based traceability applications is being developed that enable this detailed interrogation of the data supplied by ‘capture’ systems.
Lawson developed its preconfigured web-based solution in conjunction with one of the world’s largest food production companies, Nutreco. It is a simple technology layer that sits over the top of a company’s existing enterprise systems through which users can make enquiries at the click of a mouse. This provides the retrieval and validation front end that allows any stakeholder in the value chain to gain access and trace products from end to end and from the middle out.
Ultimately, traceability should not become a back-burner issue or a “nice-to-have” function. It should be core to an F&B company’s enterprise systems and treated like any other R&D investment. Locally, the big squeeze will ultimately come from retailers who will insist on more transparency along the entire supply chain. On a larger global scale, tougher regulations and shifting market dynamics will put greater pressure on the need for fast access to accurate and relevant trace data, providing the manufacturer with a key method of differentiation and market access.
Vicki Griffith,
Global marketing director
for food & beverage,
Lawson Software
Movex House, Old Power Way
Lowfields Business Park
Elland, West Yorkshire
HX5 9DE UK
Tel: +44 (0) 1422 377611
www.lawson.com
