Achieving farm to fork traceability in the food industry
This article is adapted from a recent webinar: ‘The Benefits of Traceability & Blockchain Technology for the Food Industry’. The webinar was hosted by Jack Payne, Aptean’s VP of Product Management and Solution Consulting.
One of the food industry’s great challenges over the last century has been to achieve better visibility, transparency and control over its supply chains.
Food businesses of all sizes should be striving to ensure full traceability. It’s important for so many reasons; from the quality of your food to the safety of your customers and the financial implications should the worst happen and a product recall becomes necessary. Read on to learn more about how the industry can continue to improve and the role new standards and technology are playing.
From farm to fork
It’s important to begin with a reminder of the food industry landscape. In reality, supply chains are often sprawling networks characterised by complex relationships between one node and the next. But essentially we can categorise each part of the chain as either farm, factory, foodservice or fork (see above).
Keeping this direction of travel between the four parts of the chain in mind can help us understand what’s needed to improve our ability to trace seamlessly between all of them.
A history of traceability
Producers and vendors have always had implicit or explicit arrangements over things like food quality and provenance, but traceability as we know it today began at the start of the 20th century. The establishment of food standards agencies like the American Food and Drug Administration (FDA) in 1906 saw the introduction of universal rules and guidelines.
These rules were tightened over the decades in response to scares like the discovery of a cancer-causing herbicide laced into cranberries in 1959. A historic milestone in food regulations was reached in 2000 with the Global Food Safety Initiative (GFSI) which established further worldwide standards in the wake of some high profile recall incidents.
More recently in the US, the Food Safety Modernization Act, signed in 2011, introduced a raft of new regulations focusing on prevention of breaches and 1 back/1 forward traceability. The act also gave the FDA greater powers to enforce rules, and made the core regulations mandatory for all food companies.
With the traditional method of paper record keeping the best food companies could manage by way of traceability for a long time, the first real technology breakthrough was with the advent of Material Requirements Planning (MRP) systems in the 1980s. These provided a degree of lot control which hadn’t been possible before, allowing companies to track individual lots independently. However they were fairly limited, failing to connect the dots between supplier lots and customer shipments.
This gap was bridged by the early Enterprise Resource Management (ERP) systems in the 1990s. These provided ‘lot trace’, connecting the supplier lots and customer shipments. Forward thinking companies invested in these systems to improve standards and protect their brand. And in the years since, the systems themselves have grown more and more sophisticated.
Now, new and developing technologies like Blockchain are redefining the level of control, speed and accuracy of business’ traceability operations - more on this later.
Food manufacturing trace scenario: frozen pizza factory
To illustrate the level of traceability requirements that modern food businesses require from their ERP solutions, we can use a scenario. Consider a frozen pizza company; this business:
- Turns over around $100m per year
- Purchase a range of ingredients from multiple suppliers including pre-sliced meat and vegetables
- Produce their own “signature” tomato sauce on-site
- Serve foodservice companies and grocery chains, shipping to their distribution centres
Based on this, they decide any ERP system must have the following traceability features:
- Allow purchase only from qualified suppliers
- Track all transactions by lot number
- Provide production quality testing results
- Record lots shipped to customers
- Have a comprehensive backwards and forwards trace and recall module
Trace and recall best practices
A system’s trace and recall functionality is arguably its most important traceability element. Should a product recall be required, the speed and efficiency with which the system can determine the right course of action could be vital.
Trace and recall modules must be able to trace backwards from the customer (i.e. using the date code of the specific lot or a shipping note/invoice). Then, they must be able to trace forwards from the supplier (for instance using the supplier lot or receipt number). They must also have ‘bi-directional’ tracing ability within the company.
Consider our pizza business’ “signature sauce” - it needs to be possible to track the ingredients of the sauce back through the supply chain and track shipments of the finished product onwards to foodservice and consumers. Finally, it is also useful for any ERP solution to have a visual tracing element like a shipment map - this makes it easier to authorize recalls.
Raising the bar with GS1 standards and blockchain technology
The discovery of a dangerous or substandard product at the consumer end of the supply chain needs quick action. Standard traceability is relatively quick these days, with date codes and lot numbers enabling the trail to go back from the consumer through the retailer, distribution centre, factory and all the way back to the source. We can expect a standard time of around 2 hours for communication between each part of the chain, meaning the problem should be found in around 8 hours.
However, with the speed and scale of modern supply chains, 8 hours could be way too long in some cases. Cutting the time it takes to root out the offending part of the chain can stop people getting ill, cut down on disruption and prevent wide scale recalls. So how can we make the process quicker?
- Install lot trace and recall solutions at every single node of the supply chain.
- Implement GS1 standards (universal barcodes and labels for instant product identification) across the board.
- Prepare for brand new solutions like Blockchain technology.
GS1-128 barcodes include AI’s (Application Identifiers) to encode information such as the packaging date, lot number and net weight.
Requiring your suppliers to use GS1 standards simplifies the receiving process to just one scan. It also increases the efficiency of operations in the warehouse, as well as reducing the likelihood of costly errors occurring. GS1 can lead to major traceability improvements and savings in cost and time, but work needs to be done to make it the industry standard. 80% of respondents surveyed in our recent webinar said their company didn’t have fully implemented GS1 standards.
Blockchain is still a long way off being commonplace in the food industry, but the hope is it could one day revolutionise traceability. Blockchain is essentially an immutable and universal ledger of events. When used for food, it gives increased accountability and transparency across the entire supply chain. Every company can control who else has access to their trace data, but they have complete visibility over the downstream and upstream journey of a lot.
The technology is not yet viable for most businesses, but companies can start preparing now. It’s wise to select ERP solutions that have Blockchain integration capability built in - so if and when the time comes to invest then you’ll be ready to go!