EXPERT COLUMN: The Power of Enhanced Food Traceability

Leaders who believe food traceability is only important for managing product recalls are missing a huge business opportunity.

Savvy retailers are implementing electronic traceability as a strategic imperative, enhancing their competitive edge rather than viewing traceability simply as a costly record-keeping requirement. Utilizing a wealth of supply chain traceability and product information enables retailers to prevent problems by proactively taking action; reduce costs by removing waste and increasing efficiencies; and improve product quality and supply chain performance.

Retailers traditionally depend on backward looking, “one up, one down” paper-based traceability and “point-in-time” audits to manage their risk and product recalls. Due to the evolution of information management, progressive retailers are taking a radically different approach to collaboration with trading partners, unleashing the power of forward-looking enhanced traceability.

Using traceability data dramatically improves operations and monitoring across entire supply chains in near real time, rather than “point-in-time auditing.” They have deployed efficient, simple and cost-effective electronic information sharing systems coupled with powerful analytical software to analyze their product and supply chain data. This enables them to identify potential issues early in the supply chain, and preemptively take action to prevent problems from impacting their business and customers.

Learning About Your Extended Supply Chain

Avoid being an unwitting participant in the next “Horsegate.” When horsemeat was substituted for beef in hundreds of products sold and consumed across Europe, it made international headlines. One slaughterhouse that produced horsemeat fully documented it and complied with all local and EU regulations. Unfortunately, this critical data never made it to the buyers as they lacked visibility when their direct suppliers deliberately or inadvertently sourced horsemeat (beef) products from non-approved facilities.

This occurred despite many retailers having strict requirements for beef products, and investing in audits and inspections of the approved production plants. Enhanced traceability could have automatically monitored deep within the supply chain, alerting retailers to incidents of non-compliance to prevent the disaster before it happened.

"Business as Usual" is Failing

Many companies rely on human verification to identify problems. This approach simply cannot keep up with today’s sheer volume of supply chain data. It is estimated that humans can miss up to 50 percent of defects in high volumes of data. One leading North American retailer needed to check the equivalent of 16 stories of paper just to verify compliance with its sustainable seafood program. Electronic traceability systems can cost-effectively, automatically and accurately verify compliance.

The benefits of enhanced traceability for many retailers remain untapped as organizations are distracted by the perceived cost and effort of implementation. The irony is that their supply chains already contain a wealth of existing data, yet its high-intrinsic value goes unrecognized. Progressive retailers acknowledge the value and are leading this industry progression. Retail leaders must act on this incredible opportunity -- to proactively prevent problems, improve efficiency and dramatically reduce costs to benefit their companies, suppliers and the consumer.

Phil Werdal is the CEO of Trace Register; he has 40 years of experience in the U.S. and Japanese seafood industries.