Traceability as a Tool for Manufacturers

In June 2002, national manufacturer ConAgra Beef Co. voluntarily recalled more than 354,000 pounds of ground beef – 177 tons – that may have been contaminated with the E. coli bacteria. Within 20 days, USDA requested that the company further expand its recall to include 19 million pounds of product. Since ConAgra could not readily trace and identify the stores that bought the meat or the brands under which it was sold, it took days to pull all of the recalled product. Public awareness quickly grew of ConAgra’s inability to track its products, commensurately decreasing the company’s profits and eventually driving the brand to exit the meat manufacturing business.

The result of ConAgra’s shortcomings is becoming more of a reality in the marketplace as manufacturers continually battle the possibilities of product concerns such as mad cow disease or terrorism threats like those of July 2005’s milk bioterrorism scare. Manufacturers are continually forced to the line by their suppliers, customers and industry regulators to ensure that their offerings are both high-quality and safe.

To address these concerns up and down the supply chain, the food processing industry is increasingly finding answers with automated traceability systems. Automated traceability solutions are used to track product, streamline schedules, reduce operating costs and improve customer service. For forward-thinking companies, automated traceability technology is an integral part of end-to-end operations, from suppliers to customers.

Using traceability as a business tool, food processors can effectively position themselves to answer some of the industry’s toughest challenges and support their brands throughout the marketplace.

Traceability Today

Throughout the past few years, automated traceability has started to make its name in the food processing industry. With regulatory and customer demands becoming more stringent, traceability solutions offer tremendous benefits, including:

Regulatory Compliance: As a result of the Sept. 11th terrorist attacks , government-imposed regulations set forth by organizations such as FDA and European Union are more stringent than ever. While the primary intent of these regulations is to enable rapid containment in the event of an intentional contamination of the food supply, they apply equally in the case of accidental contamination. A common requirement at the core of these regulations is often stated as “one-up, one-back traceability.” This embodies two basic expectations of the food processor: Tracking the source identity of all the ingredients contained in a product and identifying the disposition of the ingredients in all intermediate and finished products.

Brand Protection: While retailers, food service organizations and marketers of branded products invest time and money to promote brands in the marketplace, they are also becoming increasingly demanding of their suppliers. Suppliers are now expected to prove that they can consistently deliver high-quality products to ensure they do not put their customers’ brands at risk. In light of recent high-profile food contamination events in the news, many food processors now find themselves measured on their ability to help their customers protect their brands and reputations. In general, the demands for brand protection begin at points closest to consumers in the food chain and cascade back to the food source. Every supplier in the food chain ultimately feels the ripple-effect of the need for brand protection originating at the point of sale to the consumer. That is because every participant in the supply chain assumes the risks of poor quality control, regardless of which partner in the supply chain may cause a problem.

Mock Recalls: One of the increasingly common ways that food processors are being tested for brand protection is through food safety audits and mock recalls. Many processors that supply the national retail chains are now conducting mock recalls on a quarterly basis at the request of the retailers. For a food processor, the cost of a failed mock recall can be catastrophic. Compared to the initial warnings that might be imposed by FDA, a customer is not required to provide any warnings of dissatisfaction. A customer may switch to another supplier based on the failure of even one mock recall. For food processors, the risk of losing a customer due to a failed mock recall is most pronounced when the customer’s investment in brand value is highest.

Traceability Options and Solutions

For many food processors, their current challenge in choosing a traceability solution is to identify an automated approach that is both cost-effective and a good fit for their current business operations.