I first broached the subject of traceability in food supply chains in a post entitled Traceable Supply Chains and Food Safety. Tracing food supply chains, especially global food supply chains, can be difficult; but like in so many other areas, establishing and enforcing standards can help ["Standards set to protect reputations," by Ross Tieman, Financial Times, 27 January 2010]. Tieman claims that "traceability in global food supply chains has come a long way" and the result has been greater food safety -- at least in Europe. He reports:
"A glance at the annual report of Europe’s Rapid Alert System for Food and Feed provides a fascinating insight into the difficulties of ensuring food safety in an era of global supply chains. The 2008 report, published in July last year, lists about 7,000 notifications concerning potentially risky food or animal feed issued via the RASFF system maintained by the European Commission. The good news is that, while the number of notifications was stable, the number of alerts sent to national governments of the 27 members of the European Union and partner countries, including Norway and Iceland, halved, to 528 alerts, as regulators focused on the cases in which there was deemed to be a real risk to health."
The reason that the reduced number of alerts is "good news" is because it means that consumers should realize that these warnings are serious and not simply the government crying wolf at every opportunity. That should translate into fewer illnesses and deaths. For companies, it should also mean less liability and fewer losses as a result of recalls. If there is bad news coming from the report, it is that governments rather than retailers or suppliers are finding the tainted food. Tieman continues:
"Just a few incidents can trigger hundreds of notifications, as news about sunflower oil from Ukraine contaminated with mineral oil, melamine in food from China or dioxins in Irish pork is spread through EU supply chains. Many problems are forestalled by health inspectors long before foods reach the table. More than 40 per cent of notifications concerned imports that were tested at EU borders and then rejected, with warnings sent to the country of origin. Overall, official inspections triggered 83 per cent of notifications, company checks picked up 6 per cent more, and consumer complaints generated 4 per cent."
Regardless of where and by whom problems are detected, both consumers and companies end up winners. Tieman explains:
"Only 1 per cent arose from cases of food poisoning. Indeed, when problems are identified, companies, anxious to protect their reputations, seem to act fast to tackle the consequences. During December last year, the Canadian Food Inspection Agency issued only seven 'high risk alerts' involving food product recalls. No illness was recorded in any of the incidents, the recalls were voluntary, and the agency was able to provide serial numbers for the products and pinpoint where and when they were sold."
All of the challenges associated with food traceability haven't been eliminated of course; but Tieman nevertheless insists that "food safety and traceability has come a long way." He explains:
"Mella Frewen, director general of the Confederation of Food and Drink Industries of the EU (CIAA) says regulators and manufacturers have 'made an enormous improvement in the last couple of decades', which have seen the EU food safety regime become one of the toughest in the world. But the desire of consumers to buy the same products all year round has increased imports of fresh fruit and vegetables to developed countries, while foods once deemed exotic have become commonplace. 'Compliance checks on safety becomes a tough one in that context, because the source may be further away and there is an increased likelihood of finding producers with different analysis and control procedures,' she says."
That is the reason that Tieman asserts that global standards and enforcement are required. He continues:
"Frank Janssens, Belgium-based Europe food operations managerat SGS Group, the international inspection, verification, testing and certification company, agrees that globalisation adds to the legal and physical complexity of monitoring food safety in supply chains. 'Traceability is very important if there is a problem,' he says. 'We need to trace and locate food wherever it is in the supply chain.' This requires companies to maintain computer systems that track food products from the farm to the retailer. Retailers and manufacturers often use third-party certification – with audits carried out by companies such as SGS – to ensure not only regulatory compliance, but also to minimise risks of a food safety incident."
As I reported in my first post on this subject, food-borne diseases can cost billions of dollars (approximately $152 billion annually in health care and other losses in the U.S. alone). Companies are very aware that a food recall could result in huge economic losses or even bankruptcy. Tieman continues:
"Big retailers take food supply chain safety very seriously, because their reputations, and therefore sales, are at stake. Back in 1998, the British Retail Consortium, a trade body, launched its BRC Global Standard for Food Safety to provide a standard for due diligence and supplier approval. No matter where the product originates, or where the supplier is based, companies supplying food to UK retailers are unlikely to win or retain business unless they comply. That has contributed to the adoption of the voluntary BRC Global Standard around the world. As alerts and notifications on both sides of the Atlantic show, the system works. When a problem becomes known, the food affected can be tracked from farm to store, and destroyed – though publicity is still needed to alert consumers if unsafe food has reached the home."
Tieman concludes by explaining the kinds of technologies used to trace food supplies.
"Today, traceability still hinges on batch numbers, barcodes and the corporate databases that record them. But technology can underpin further improvements. Radio Frequency Identification (RFID) tags on crates of fresh produce have the potential to trigger alerts to retailers and manufacturers if food is nearing its sell-by date unsold, or is left out of the fridge for too long, and becomes a risk. Furthermore, retailers have begun using data from their loyalty cards to write to customers notifying them of product recalls. Some are experimenting with more sophisticated alerts. In the future, opt-in schemes to warn consumers of product recalls by text message or e-mail may become widespread. But recalls are a last resort. Standards, laboratory tests and supply chain controls remain the most effective, and most desirable tools to ensure food safety."
According to some analysts, we are getting nearer to the RFID era ["Signs are Pointing Up for RFID, AMR Analyst says, though Broad-based Supply Chain Applications still Lagging," Supply Chain Digest, 24 March 2010]. The magazine's staff reports:
"Various observers are sensing, in the post-Walmart RFID era, that activity and adoption are starting to move forward at a fairly steady pace. That includes AMR Research analyst Dennis Gaughan, who wrote ... that he has observed a variety of somewhat anecdotal data points that are leading him to think that RFID may at last be moving towards something like critical mass. 'I’ve seen a spike in the volume of [RFID] inquiry requests just within the last month,' Gaughan says. 'These companies aren’t just kicking the tires on RFID, but looking at broader production deployments.' This is a 'striking' difference, he says. In past years, too often companies 'were doing RFID pilots that never went anywhere because they were either based on some compliance mandate or were IT driven.' He cited one recent discussion in which he was talking to an IT person about RFID middleware software, but for a project for which there was no doubt that it was being led by the business with very clear goals and a focused sense of where the ROI would be."
Large companies like Walmart can leverage their position to require suppliers to use RFID tags, but small retailers have no such leverage and little desire to invest in monitoring equipment that could adversely affect their bottom line. As RFID costs are reduced, that may change. "The smallest mom and pop retail store ... for many years has been able to easily and successfully implement a bar code scanning system," the article notes. "Some day, this will be largely true for RFID as well." "Someday" may be closer than we think thanks to the development of an "inexpensive, printable transmitter [that] can be invisibly embedded in packaging ["Hidden RFID tags could mean end of bar-codes and lines at the checkout," by Darren Quick, Gizmag, 19 March 2010]. Quick reports:
"Newly developed radio-frequency identification (RFID) technology could usher in the era of checkout line-free shopping. The inexpensive, printable transmitter can be invisibly embedded in packaging offering the possibility of customers walking a cartload of groceries or other goods past a scanner that would read all the items at once, total them up and charge the customer’s account while adjusting the store’s inventory. More advanced versions could even collect all the information about the contents of a store in an instant, letting a retailer know where every package is at any time. Researchers from Rice University working in collaboration with a team led by Gyou-jin Cho at Sunchon National University in Korea, developed the new technology which is based on a carbon-nanotube-infused ink for ink-jet printers first developed in the Rice lab of James Tour. The ink is used to make thin-film transistors, a key element in radio-frequency identification (RFID) tags that can be printed on paper or plastic."
Quick reports that the technology should be mature in five years; although, adoption may take longer. The research team is also developing the electronics that will "bring the cost of printing the tags down to a penny apiece and make them ubiquitous." Quick continues:
"RFID tags are almost everywhere already. They are being used to identify and track everything from farm animals to shipping containers and passports to library books. But to date RFID tags have been largely silicon-based. Paper or plastic tags printed as part of a package would cut costs dramatically and the roll-to-roll technique, which uses a gravure process rather than inkjet printers, could replace the barcodes that currently appear on just about everything we buy. ... There are several hurdles to commercialization. First, the device must be reduced to the size of a bar code, about a third the size of the current device. Second, its range must increase."
One of the things that could hold up widespread implementation of RFID is, ironically, standards ["How Close – or Far Away – is RFID from 'Commoditization?'," Supply Chain Digest, 6 May 2010]. The article reports:
"Virtually every technology, especially in the area of automatic identification, ends up at a certain level of commoditization. What that means is that the technology becomes fairly straightforward to implement, the hardware elements of a system are increasingly sold by third party distributors rather than the manufacturers themselves, hardware prices fall sharply, and the technical aspects of system implementation become relatively straightforward. Clearly, this happened with bar coding, for example. The process of successfully printing and scanning bar codes and communicating that data to other systems was something of a black art in the early 1990s, became increasingly mainstream in the late 1990s, and reached largely commodity technology status by the early 2000s. ... Like virtually all technologies before it, RFID is caught a bit in a 'standards trap' says SCDigest editor Dan Gilmore. 'Industry standards are essential to build a real market, in part to give users confidence that their investments won’t be made obsolete over night by a change in the technology foundation,' Gilmore says. 'But ultimately, those standards make “plug and play” something close to a reality, and that brings with it a growing element of commoditization.' ... True interoperability between tag and reader manufacturers are growing though not yet complete reality, that means soon the hardware differences will revolve completely around features and price (and less on 'will it work?'), and give buyers growing clout to push hardware and tag prices down even more so than they have been able to date."
Until RFID technology becomes more affordable, small suppliers, distributors and retailers will continue to search for an affordable way to ensure traceability. Recently, I was contacted by one blog reader who indicated that her company was facing just such a dilemma and was wondering if I had any suggestions. One of Enterra Solutions' vice presidents pointed the reader to a company called TraceLink. That company's website states:
"Consumers trust the products they consume are safe and in general they are. Unfortunately, recent headlines on tainted products have questioned the industry’s manufacturing and supply traceability processes. Should an adverse event such as tainted ingredients, infectious organism or even terrorist threats occur, knowing immediately where the affected products are in the supply chain, where they were manufactured, what ingredients went into them and who in the distribution channel handled them is paramount."
The company claims that its "Predictable Supply Suite can help by providing unique product identity and end-to-end chain of custody for all products from time of manufacture to time of consumer purchase. Create package-level and case-level identity. Enable product authentication, both in bulk and per-package, throughout the channel. Support fast recall of product through proactive notification to channel partners of adverse events. Securely share quality documentation and artifacts with channel partners as needed." TraceLink indicates that it uses a "flexible business Cloud that combines virtual team collaboration, social networking and instrumented business process modules." There may be other companies that can also provide affordable traceability -- I simply don't know. What I do know is that sharing information is critical to ensuring food supply chain safety. As standards and technologies mature, food safety will undoubtedly improve.
