COOL Affects Continuous Supplier Performance

Dan Rowe, product manager at JustFoodERP, suggests that since country of origin labeling (COOL) went into effect, “sales, purchase, and manufacturing documents have designated COOL requirements ensuring that the inventory transaction associated with the shipment, receipt, consumption, and output conform to that COOL.”

CF Chefs in Dallas, a custom liquid and dry sauce manufacturer that receives spices from vendors with the country of origin on the ingredients listed, asked for more, said Rowe, whose company provides software and service packages for the food industry. “They wanted to capture this at receiving more for informational purposes.”

Technology allows employees at the CF Chefs plant in Dallas to track real-time data.

Another company trying to determine how to use COOL information is Mastronardi Produce/Sunset. The company is a pioneer and industry leader in the gourmet greenhouse industry, which grows and markets nationally recognized brands such as the Campari Tomato, Splendido Grape Tomatoes, Kumato, and Champagne Cocktail Tomatoes, under its Sunset label.

Family owned and employee managed for more than fifty years, Mastronardi produces flavorful gourmet tomatoes, peppers, and cucumbers. Because the company does not actually manufacture—that is, alter—the product they resell or repack and sell, Mastronardi has very complex country of origin (COO) requirements. The company must identify the COO on shipping documentation, as well as reserve inventory by COO, to ensure that customer requests for specific produce from specific countries are fulfilled. This process becomes complex, for example, when a four-pack of peppers must combine multiple colored peppers from different countries.

A Time Saver as Well

Michael King, customer manager for JustFoodERP, believes COOL has affected food manufacturers in other important ways, particularly by saving time. “Food manufacturers can now easily comply with industry requirements without maintaining manual procedures, … which are prone to error. It’s tough to get staff into the habit of following a new procedure; it’s a lot easier when the tools that they are using to get their day-to-day job done provide a constant reminder, or requirement, to do so.”

Rowe said there are a number of significant challenges in complying with COOL requirements, including “the ability to track multiple COOs against a single lot and report the usage of that lot into a finished good, all the while maintaining the COO of the finished good based on the component usage.”

Since its introduction several years ago, there have been many changes, both positive and negative, related to COOL. One is that customers struggle with conforming to COOL because it is transaction intensive. Typically, they must not only introduce a formal lot-tracking system to replace a paper-based system, but they must also tack the added complexity of COO onto each transaction. In addition, although customers also expect more automated tracking of COO, they soon realize that in order to achieve this goal, they must implement other processes they did not anticipate.

“We do not require production consumption to occur in advance of production output, and, therefore, after-the-fact consumption is often implemented in place of shop floor consumption,” Rowe said. “On the other hand, production output must occur in advance of shipping, so production output is handled on the shop floor. However, in order to report the COO at shipping, the output must know the COO. This situation often results in a significant disruption to the shop floor, where users are not accustomed to interacting with a computer.”

Driving Technology Development

The COOL requirements have been a prime example of industry maturity driving technology development initiatives. Food manufacturers’ need to adhere to COOL requirements have resulted in functionality within enterprise resource planning tools that allows users to track one or more COOs from receipt of raw materials through consumption, production, output, and shipping.