Manufacturers should look behind traceability for the real benefits

Traceability has long been a source of debate within the food industry, ever since the EU introduced the General Food Law in 2005.  This outlines the legal requirement for food business operators, or FBOs as the FSA describes food related industries, to follow food both from the source to the organizations it is initially supplied to - so called "one up and one down" traceability. Yet whilst most do comply with this requirement, there is a need for greater awareness within the industry of the benefits that wider traceability across the supply chain can bring. 

All too frequently, traceability is regarded negatively as a cost and compliance issue rather than how it should really be regarded, as a source of competitive advantage and opportunity.  Traceability does have a cost implication, but the return on investment is fast and the added value it brings will sustain a business for the future, long after the initial outlay has been recouped.  For producers of premium products, traceability offers a means to really substantiate any claims made, guaranteeing authenticity and quality to the consumer.  The Norwegian government understands the value of this, and is supporting its food industry to become the leader in Europe with advanced traceability systems that really do span from farm to fork. For instance, one local lamb producer has implemented a system that allows the consumer to trace its organic meat products right down to the field in which the animal has grazed on organic grass.  At the supermarket, joints are labeled with a 2D barcode and shoppers can use their mobile phones to trace the journey each joint has made to the supermarket shelf.  If there ever was an example of true farm to fork traceability that's it, the only information missing in the chain is how it is ultimately cooked and consumed.

Perhaps this sounds a tad futuristic, but for the producer, this clearly differentiates and authenticates their brand, which in turn justifies their premium prices and also gives them an opportunity to further improve their supply chain processes.  And adoption of such techniques is expanding from Europe to Asia with a new initiative by the Vietnamese government to trace its prawn and shrimp exports.  This will ensure the prawns are kept at the right temperatures throughout their journey to stores and therefore improve quality and brand reputation.

So improving traceability will go a long way towards achieving the typical goals of improved quality and safety.  But in addition, it will also improve efficiency.  This can be through reduced wastage as a result of better shelf life management, which in turn can also enable reduced inventory levels. One European food supplier has cut its wastage levels by 10% by using a traceability solution.  This works in a number of ways.  Ever been supermarket shopping and gone to the back of the shelf  to get the produce with the longest sell by date?  You are not the only ones.  This was a huge problem for the retailer and meant selling near to expiry date produce at discounted rates too frequently.  By introducing a traceability system,
stock nearing its sell by is automatically selected first for display on shelves, leaving the longer shelf life produce behind in the back of store area.  And there are other benefits of having such information.  Storage temperatures of fresh produce can be recorded throughout the supply chain and should a shipment be likely to spoil quickly, it can be rejected immediately or sold off first.  Another area where traceability can benefit is by storing information relating to potential contaminants during distribution which could affect the end quality of the product by consumers and then linking this to product batch numbers.

Although many initiatives are being pioneered by meat, dairy and fruit or vegetable producers, equally important lessons can be learned by the beverage and processed food industries about the competitive advantage opportunities available. 

Many organizations have the systems in place to track products through elements of the supply chain, but lack a joined up approach and operate in silos without sharing the information gathered.  Slowly this is changing, as producers and retailers work together to identify simple yet highly effective solutions to capturing and sharing product information.  And this is occurring within companies of all sizes.  In Portugal, one supermarket chain is working with its small local farmers to exchange data within the supply chain using a smart card system liked to a simple PC application. Product details are recorded by the grower, e.g. vine tomatoes, grower ID, quantity, pick date, and the card is then dispatched with the produce to the retailer.  Once at the store, the information is automatically captured from the card reader and stored within the central stock management system. Other more sophisticated systems will combine the use of smart cards with RFID readers to capture this information, and in some cases, a GSM antenna will communicate this information directly to another interested party, for example informing in advance when products are dispatched, or if storage temperatures rise beyond permitted levels, warning of the need to shift a particular shipment more quickly.

So the technology is available and a wide variety of data capture solutions exist to enable food manufacturers at all levels to achieve full traceability.  What is needed now, is a greater understanding from the food industry that this is not a question of legal compliance, but a very real commercial opportunity to improve operational effectiveness right across the supply chain. As we say, look behind the regulatory issues to understand the real benefits it brings.