FDA officials stated last week that the salmonella contamination threat with peanut products could continue on for several years. Although the source of the salmonella has been pinpointed, the process of removing all of the impacted products throughout the supply chain is still on-going. Peanut Corporation of America (PCA), the now bankrupt salmonella source, offers an excellent illustration of how complex the food supply chain has become. PCA not only manufactured its own products, but it also developed ingredients for 85 other food firms. As a result over 2600 different SKUs from hundreds of different brands have been recalled. To eradicate the threat food manufacturers must identify all of the contaminated machinery in manufacturing plants and all of the packaged products delivered to grocery stores. However, the most challenging aspect might be locating the impacted products already in consumer households.
In my post a few weeks ago, I outlined how data synchronization technologies could be employed to help retailers more quickly identify products affected by salmonella outbreaks. In this post, I would like to focus on how other e-commerce technologies such as RFID, barcode labels and EDI can be utilized to improve food traceability.
Three Key E-Commerce Technologies
There are three e-commerce technologies and industry standards, which if used broadly, could help to automate traceability efforts considerably:
- Global Location Numbers – Every location in the supply chain, whether it is a manufacturing plant, distribution center, retail store or agricultural facility, should have a unique identifier called a Global Location Number (GLN). Supply chain participants can obtain a GLN from the GS1 group which administers the identifier codes.
- Serialized Labels – Each container or pallet of goods that is traveling through the supply chain should be uniquely identifiable with a serial number. RFID tagging enables serialization by default as the Electronic Product Code (EPC) is instance specific. Serialized barcode labels such as UCC-128 can be utilized as well.
- Ship Notices – Whenever a container or pallet of goods is transported from one party in the supply chain to another, an electronic shipment notification should be transmitted from the shipper to the receiver. The ship notice could be in EDI or XML, but should contain details about the shipment such as point-of-origin, transportation carrier and date of arrival, but most importantly a manifest of the cargo.
How would E-Commerce Help with the Current Salmonella Outbreak?
Let us examine how these technologies could be used to help with the current salmonella outbreak in peanut products. The source of the contamination has been pinpointed to be the Georgia and Texas PCA plants, which is where the rodent droppings, bird feathers and toxic mold were located. Using an e-commerce model, the PCA plants would have each been assigned a unique GLN. Additionally, each lot/batch of peanut product distributed from the plants would have been labeled with a unique, serialized barcode (or RFID tag). Furthermore, there would have been an electronic shipment notice corresponding to each physical shipment of the peanut products from PCA plants.
When the source of the contamination was pinpointed, food manufacturers, perhaps such as Smuckers and Kelloggs, could run a query in their warehouse management system for all inbound shipments received from the PCA Georgia and Texas plant GLNs. The query might return a list of 20 shipments over the past 90 days and a corresponding set of serialized barcode identifiers. The food manufacturers could then sort through their raw materials inventory to identify the containers with the associated barcode labels. The contaminated peanut product could then be safely destroyed.
The process becomes more challenging if the raw peanut material has been used in the manufacturing process and/or shipped in finished product to a retailer such as Kroger, Safeway or Wal-Mart. In these instances, the food manufacturer must quickly identify any finished product that was created from the contaminated peanut ingredients. Ideally, their ERP system would be able to correlate each batch/lot of finished product leaving the plant with the raw material ingredients used to produce it. So the manufacturer would know which finished products (e.g. cookies, candy bars, salad dressing and peanut butter spreads) could potentially contain salmonella. They can then send notifications to the retailers who received the contaminated product. Retailers can perform a similar process to the one described above to pinpoint and destroy all peanut products with potential salmonella.
One Small Problem
Of course, there is one small problem with the approach outlined. That is that very few of the supply chain participants fully utilize the industry standards and e-commerce technologies. Adoptions rates are much higher downstream in the supply chain closer to the consumer. Retailers and their direct suppliers such as food manufacturers use e-commerce extensively today. However, as you move further upstream in the supply chain, the level of automation and e-commerce technology adoption drops considerably. Few agricultural facilities are placing serialized labels on containers. Nor are they sending electronic shipment notifications to the organizations that buy from them. Virtually none of the ingredient suppliers for food products are leveraging data synchronization to send product catalog information.
There is a newer XML based standard called GUSI, which stands for Global Upstream Supplier Initiative, which is gaining popularity upstream in the consumer good supply chain. Early adopters of GUSI have primarily been in Europe, but the US consumer goods industry has expressed an interest in GUSI as a potential strategy to digitize the exchange of catalog, forecast, shipment and invoice data with ingredient suppliers. For more information on GUSI visit the Global Commerce Initiative (GCI) web site or listen to my colleague, Bryan Larkin’s podcast entitled GUSI comes to America on Trading Grid Radio.
There are manual processes which can function as alternative methodologies for food traceability. However, as with any manual process these are error-prone and time-consuming. With the economic impact and public health risk posed by salmonella outbreaks, can we afford to be relying on paper-based manual processes?
