The whiteboard in the manager’s conference room laid out, in black and white, the key initiatives and strategies that the major food company would be wrestling with in the near term. In the upper left corner, the circled letters “FDA” appeared, with the adjacent notation, “neutralize.”
The strategy didn’t involve the Food Safety Modernization Act, but the sentiment applies to industry’s view of FDA’s approach to product traceability. The release of a 2012 pilot study commissioned by FDA and conducted by the Institute of Food Technologists (IFT) produced a firestorm of protest of regulatory proposals aimed at speeding responses to a recall inquiry.
FDA has been mum since the public comment period closed in July.
The reaction stands in sharp contrast to a parallel effort to bring product tracking into the 21st Century with scannable bar codes on pallets and cases and place those electronic records in a standardized format that can be tracked throughout the supply chain. Four industry groups representing meat and poultry, produce, dairy and seafood processors are laying the groundwork with GS1 US, the Lawrenceville, N.J., successor organization of the Uniform Code Council, creators of the 12-digit UPC codes used for food and other consumer packaged goods for the last 40 years.
Much of the pushback to the IFT report focused on a recommendation to extend traceability reporting requirements beyond high-risk foods. But objections also were raised by food companies that have moved to electronic documents and that fear FDA will mandate traceability requirements that could disrupt their internal reporting systems. Food products in the center of the grocery store have utilized scannable codes for decades and are supported by electronic data systems, but machine-readable codes are virgin territory for fresh products on the store’s perimeter: meat, poultry, seafood, dairy products, bakery and deli items, fruits and vegetables.
Processors of those goods are coalescing around the uniform data requirements standards provided by GS 1-128 and the 14-digit Global Trade Item Number (GTIN) bar codes. GS1 US estimates fresh-food companies could wring $3 billion in supply-chain costs out of their systems from code-enabled electronic records.
The granddaddy of GS1-related initiatives is the Produce Traceability Initiative (PTI), which began building a tracking infrastructure for fruits and vegetables from the farm to the retail and foodservice hand-off four years ago. Consider it traceability with training wheels: Labels affixed in the field include text and bar codes that identify the shipper, the product, the lot or batch and other information the shipper decides to include. It could easily be aligned with key data elements recommended by IFT: supplier ID, product ID, purchase-order number, quantity or pack size and receipt date.
Publix supermarkets began scanning PTI case labels at its distribution centers 19 months ago, and Walmart, Aldi and other retailers are considering scanning pallet labels that include source identification for each case on a mixed pallet, according to Angela Fernandez, GS1 US’s vice president-retail and foodservice. Dole and Tyson are serializing every case moving through the supply chain, she adds, capturing more granular information.
The Meat and Poultry Business-to-Business Data Standards Organization, a data synchronization and standards group also known as mpXML, in March became the fourth industry segment to collaborate with GS1 US. Unit weights are included in their bar codes, Fernandez says, and the same will be done with seafood. While mpXML succeeded at synchronizing data in the supply chain, organizers recognized that GS1 standards were needed to lower IT costs and speed up data flow between trading partners, she says.
Show me the money
If traceability can be shown to lower costs and improve profitability, it casts it in a much different light. Must-do requirements for regulatory compliance then become must-have tools for inventory management. Greater visibility can be a marketing advantage, suggests Christian Hutter, senior vice president-food and beverage for ERP supplier Junction Solutions, Denver. An enhancement to Junction’s traceability module gives food companies the option of incorporating a QR code on retail packages. Shoppers can use their smart phones to scan the code and pull up the product’s genealogy. The code doubles as a recall advisory, Hutter says, but the greater value is building loyalty and establishing a virtual dialogue with consumers.
“There are lots of data standardization elements still missing, particularly if you go across international borders and in tracking cross contamination and commingling of products in the supply chain,” he allows, but he believes significant progress is being made in limiting the scope of recalls and in driving unnecessary costs out of the supply chain.
Reducing recall response times and processor liability is only part of the push to more efficient data exchange and traceability, suggests Kelly Kuchinski, industry solution director at Sparta Systems Inc., Hamilton, N.J. Most of Sparta’s clients are involved in pharmaceutical manufacturing, and the cost of recalls and quality problems were key factors in the industry’s movement toward item serialization and automated records, she says. Eli Lilly and Co. credited implementation of Sparta’s tracking system with a 2-3 percent improvement in gross margin.
The food supply chain is more complex and involves multiple more players than pharmaceuticals and medical devices, Kuchinski says, and most quality assurance programs still rely on Excel spreadsheets and paper documents. But GS1-128 and GTIN codes capture the DNA of food products and provide a bridge between external tracking and individual firms’ internal systems. They are the gateway to improved traceability, and organizations using electronic record systems recognize their ability to deliver the results that FDA wants.