Beyond Compliance

With the start of 2007, the final date has passed for all processors of any size to be in compliance with the record-keeping provisions of the Bioterrorism Act. Compliance, based on one-forward, one-back tracking, provides a system by which products can be traced literally from fork to field, enabling tracing of a contamination to its source. 

Since the introduction of the Act, processors have implemented a variety of systems which put them in compliance with the mandate; systems ranging from paper-and-pencil lists and off-the-shelf software to fully customized, equipment-laden electronic tracking systems, with some processors aiming to simply be in compliance and others taking the opportunity to go beyond compliance and add value through the compiled data.

The food industry has always done tracking and traceability, says John Blanchard, principle analyst for ARC Advisory Group in Dedham, Mass. “The only issue is how accurate, how granular, and how reliable” it was, not only in relation to processes within plants, but also in relation to the systems that were available to them. In the past, the systems weren’t robust enough to track to today’s requirements, and up until recently, no one was driving an initiative to do so.

Today, however, not only are systems being developed and sold for tracking and traceability, but systems which were originally developed for other purposes are finding a niche in this landscape. BIT Corporation in Patchogue, N.Y., offers batch and ingredient lot tracking. “We originally developed this as a quality and inventory control solution,” says Charles Hayward, director of new business development. But with the advent of the Bioterrorism Act, the company made minor modifications to its system, and it now enables compliance with the Act’s Title III record-keeping requirements.

The requirements of the Act necessitate only that the product or ingredient be able to be tracked to the “Immediate Previous Source and Immediate Subsequent Recipients,” but, Blanchard says, “What good companies do is track all the way from the source, and in some cases, all the way to the retail store.” Some producers, in fact, can track a specific bean or broccoli floret not only to the farm but to the exact field in which it was grown.

While many people equate tracking and traceability with food safety, they are not the same, cautions Gary Fleming, Produce Marketing Association (PMA) vice president of industry technology and standards. “Food safety and traceability have to be separated.” Food safety is the taking of steps to prevent outbreaks. “Traceability is on the other side. If something slips through the cracks, we have to be able to trace it.” Thus traceability is a process which is implemented once an outbreak occurs, with a goal of “effectively tracing a contaminant back to its source.”

With the enactment of the Bioterrorism Act as well as the continued pressure from customers and consumers for producers to be able to quickly provide answers in the event of an outbreak, today’s tracking and traceability systems have become more and more robust, with technologies providing an extensive array of data and requiring processor investment into a program. In fact, Fleming says he is often asked, “Would traceability in and of itself cost-justify the investment in technology?” to which he responds, “The answer is probably no. But all it takes is one recall to put someone out of business.” Fleming then goes on to qualify his statement, adding, “Traceability in and of itself will not necessarily justify your investment in the technology, but the technology itself has its own ROI (return on investment).”

It is an ROI centered around the data itself — the increased amount of data across processes that can be efficiently collected, the multiple uses of the data, and the improved speed at which the data can be accessed and traced; and it is an ROI that not only pays for itself but can actually add value across a range of areas for a plant.

VALUE THROUGH DATA. While compliance can be met through manual documentation which lists the previous supplier for each incoming ingredient and the scheduled recipient for each outgoing product, the implementation of technologies simplifies the process, makes it less error-prone, and adds efficiencies. Depending on the extent of a specific system, data can be captured which enables tracking, measurement — and improvements — in:

• recall management — When a company faces a recall, its primary goal is to retrieve all potentially contaminated product. The more precise and granular the tracking system, the more specifically a company can identify affected lots, keeping them from having to recall more product than necessary and saving in overall costs, explains Jerry Horne, key account manager for Markem Solutions in Keene, N.H. “Everyone says they have programs and plans in place to address problems, but in reality, a lot of times they have general ideas, not specifics.” Citing the 2006 spinach scare as an example, he asks, “How much good product was recalled because their reaction was ‘Let’s just recall everything’?”
• speed — If you implemented a fairly basic system simply to comply with the Bioterrorism Act, you may want to take another look at its capabilities in comparison with other system options. While manual or spreadsheet-type systems can provide documentation, retrieval of information from non-database-management systems can be incredibly slow, increasing the length of time and thereby the potential negative effects of recall tracing.
• efficiency and productivity — Because of the time required and error correction, manual tracking can cost a company 25 to 50 percent more in labor than when a comprehensive software system is used, Hayward says. The inherently accurate and versatile data that is acquired through the system can be used to assess and improve efficiencies and productivity throughout the plant, enabling a plant not only to be prepared for potential recalls, but to increase throughput, better manage categories, evaluate production runs, enhance reporting, etc.
• batch accuracy — Batch and ingredient tracking beyond compliance can also provide cost savings by controlling over scaling and enabling tolerance adjustment; such tracking also provides for detection of specific ingredients mixed into each batch, reducing the possibility or enabling tracking of accidental addition of allergens or other non-recipe ingredients.
• lot production — When each item is coded, the actual run rate and material use of a product line can be calculated and reviewed for efficiencies or improvements. In addition, ongoing usage tracking allows you to better understand product flow and work on a just-in-time inventory process.
• sales — The data gathered through tracking and traceability can provide not only goods and production information, but also customer and consumer data. “I can’t imagine a marketing group in the world that would say, ‘No, that wouldn’t help me,’” Fleming says.
• asset tracking — “Where are my assets?” “Why are they delayed?” “Where is the truck that was due in yesterday?” The same tracking put in place to trace contamination provides ongoing tracing of a product’s movements which can then be used for day-to-day analysis of the assets and delays or other issues.  
• language conversion — Some systems include options for converting product information into English from other languages, or vice versa. This can be of considerable value to plants importing a significant portion of their ingredients. 
• shrinkage — Whether from theft, fraud or error, shrinkage can be a significant cost for food plants; with a comprehensive tracking system, the time and date of loss can be identified, enabling the plant to close in on the cause of loss.
• black market — While counterfeiting is generally associated more with pharmaceuticals or nutritional supplements, counterfeited foodstuffs have included everything from waffles and chewing gum to coffee and wine, and it seems that it is on the global market that such fraud is most often detected. Thus, Horne identifies an additional benefit of the systems, “By tracking and tracing your own product, if a counterfeit shows up, it’s easy to identify.”
• food security — With the basis of the Bioterrorism Act being security, value to a plant can go beyond food security, having implications for plant security as well. In fact, Blanchard says, “The immediate impact of the Bioterrorism Act was primarily physical plant security.” Asking such questions as “Who are my people?” and “What are they working on?”, he says, “I consider that a form of tracking and traceability itself.”
• discipline — With some variation based on the solution a plant deploys, Fleming says, “it’s going to give them a new discipline to start tracking things.” For example, if a plant implements RFID, it may not necessarily be great for traceability, but, he explains, “By doing that, you’re going to be able to do many more things in tracking through the supply chain.” Implementing almost any tracking or traceability system means a plant will have “a ton of data” that it never had before. “And by the way,” he adds, “if we do have a recall, then we’re set. We can [trace] in seconds.”
   
  CHALLENGES. Even with systems, tracing a contamination can be a puzzle, and it is especially complex when working with commingled products. “You have to use a combination of different things to build the puzzle,” Fleming says. And though systems are continually improving, the industry still faces certain challenges, including:
• Data certainty — “One of the challenges is data certainty — that you are assured that the data is accurate, authentic and complete,” Blanchard says. There is still a significant amount of manual data entry being done in the industry, he says. Even when the entries are compiled into an Enterprise Resource Planning system (ERP) — which integrates data from various areas of the business into a single application software — input errors, typos and even missing data can throw off the resulting analysis. “Without it being automated, there are a variety of mistakes and clerical errors,” Blanchard says. To overcome this, he recommends that plants have full on-the-floor tracking and tracing systems to follow the product through the process. “If you don’t have the inspection system, things happen.” 
• International tracing — In the U.S., the implementation of tracking and traceability is driven primarily by customer requirements, Blanchard says. While there are, obviously, regulatory requirements, it is customer requirements, such as those of Wal-Mart, that can be the more stringent. In Europe, it is the opposite. “In the European Union, more is by regulatory requirements,” he says. “While they need business justification, one of the drivers is the EU safety law.”
• Lack of standards — There is no single standard within the industry for tracking and traceability, and even within a single company, there is often little uniformity between plants, Blanchard says. This can be particularly true when no specific technology has been recommended or mandated, and when the system is manual. This lack of standards also holds true for lot tracking and labeling, “There is a serious need for labeling standards in the food ingredient supply chain. Food ingredient producers have their own style,” Hayward says, explaining that a processor’s incoming goods may have hundreds of different number systems, coding and even date formatting. While this can be overcome within the plant through lot-tracking systems which convert all items to a single coding standard as they come in the door, it illustrates the range of non-standardization which still exists along the food supply chain. 
• Outside the “four walls” — Because of the difficulties and expense of integrating of systems, processors will often focus on tracking “within their own four walls.” In fact, PMA was involved in a pilot in which plant representatives came together on tracking and traceability. “Everyone thought they had an effective tracking system coming into the pilot,” Fleming says. “They found out that they had an effective system within their own four walls, but once it left the four walls it was not effective.” The lesson learned is that the industry should strive to implement and follow industry standards rather than separate proprietary initiatives. “Proprietary management just makes things more difficult. Not impossible, but more difficult,” he says. “Let’s all talk in one language.”

CONCLUSION. Despite the challenges, puzzles and complications of tracking and traceability, “It can be done,” Fleming says. “There are the right processes and technologies to get it done, but not without some work.”
“There are solutions out there, the question is how much are they willing to spend?” he says, adding that while this is a legitimate concern, processors should look at the bigger picture and understand that if they do not move forward – beyond compliance, the government may decide to take matters into its own hands and out of industry hands. “We prefer to keep it in industry hands.”  QA

Creating a Tracking and Traceability Plan

1. Determine the need. Gather information from all areas of your plant, from personnel in each section, to include not only line employees and quality assurance, but also marketing, legal, procurement, logistics, etc. – “all those who have a reason to be interested.”

2. Consult with an expert. “Choose your partner wisely,” Horne says. Work with someone who has experience and expertise in the area of tracking/traceability and in the food industry.

3. Develop an action plan. Review software capabilities and options, determine hardware needs and expenses, establish internal procedures; then develop your plan based on the worst-case scenario. “If you can come up with a way to handle the worst-case scenario, you can handle anything,” Horne says.

4. Budget for the unexpected. If a plan has to be implemented, it generally means that there has been accidental or intentional contamination somewhere along the product line, leading to a recall. “Whenever you’re planning a budget, always have about 10 percent for unforeseen contingencies,” he says. If you’re in an actual recall situation, you may have to deal with hazardous material transportation, disposal costs such as dump or incineration charges, etc., all of which can be very costly.