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Digital Traceability: Reducing Risks and Finding Efficiencies

Written by Alex Lewis, Parity Factory Corp.

The ongoing crisis has shed light on the need for innovation in the food space, even in the most fundamental processes.

If someone were to ask you which industries were most important to our daily lives, what would you say? Along with things like communications, construction, and clothing, one of the first things that likely comes to mind is also one of the most basic: food. The agricultural and food processing industries provide for our most key needs and enables our continued growth. It is unlikely anyone would argue against the importance of the food and beverage industry to our society, however 2020 has brought us a loud and clear reminder of just how crucial it is, in the form of the COVID-19 pandemic. 

In just a few short months, food and beverage manufacturers saw demand increases that haven’t been seen in a lifetime. At the time of writing, sectors of the food industry have experienced spikes in volume ranging from 32% in milk, 30-47% across the snack sector, and a staggering 77% increase in demand for meat, and this trend holds true for nearly every vertical within the industry.

The stay-at-home orders announced by most governments have sent consumers rushing to the store, clearing shelves and placing new strain on food and beverage processors. As they struggle to keep up with their order volume, many manufacturers are looking for new ways to improve their efficiency and reduce their liabilities. As it turns out, one of the most effective methods may also be the simplest: digitizing their lot tracing.

What is digital lot tracing?

All food and beverage manufacturers track their lots. In fact, it is one of the basic requirements for running a food processing business, with the specific standards and protocols defined at the federal level by organizations such as the FDA. By requiring tracking of all material that is involved in making a product, down to the packaging used, it ensures that recalls can be performed swiftly and protects the health of the public. Manufacturers manage their tracing using a variety of methods, from pen and paper, to Microsoft Excel, to fully integrated traceability software, with many using a combination of methods. Digital lot tracing simply means that a company is capturing and managing their tracing data on a digital platform, often integrating scanning and barcoding into the process. This approach has a drastically lower error rate than more traditional methods and tends to be significantly more efficient.

Despite tracing being a common daily task that all processors contend with, there has been surprisingly little momentum towards automated lot tracing in food. By some metrics, only 1 in 5 operations have fully automated their lot data capture, with a bit more having partially implemented the process. The food industry has always been slow to adopt new processes, but as demand and competition skyrockets, many are finally feeling the need for an upgrade.

The risks of a recall

Executing recalls, specifically executing them quickly and efficiently, is one of the biggest challenges that food and beverage manufacturers face. Under current FDA guidelines, food and beverage processors need to be able to perform a recall within four hours. Many of the major retailers demand even more of their suppliers; if you want your product on the shelves in a Walmart or Costco, you must be able to perform the same process in as little as two hours. The unfortunate reality is that for processors tracing on paper, particularly those producing at scale, these targets are difficult to hit. Also, the human element involved in manual tracing can allow errors to find their way into data, and this has become especially true for those who are dramatically increasing their throughput to keep up with new demand caused by COVID-19. Without true, reliable data, a recall can quickly go from difficult to impossible.

The consequences of a botched recall can be dire: the average recall costs a manufacturer $10 million, not including possible fines from regulators, or losing the aforementioned Walmart or Costco contract. One of the biggest losses is one that may not be immediately obvious: consumer confidence. Over half of consumers will quit purchasing a product once it has been recalled, and studies have shown that a company’s stock price will typically drop as much as 22% following a major recall. Once that confidence is gone, it can take months or even years to get it back, if it can be regained at all.

All these problems can be mitigated, if not completely prevented, through digital lot tracing. With a capable solution in place, recall times can be measured in minutes, not hours, as a few quick searches replaces shuffling through endless forms to find the lot in question (if it was recorded correctly at all). This guarantees compliance with even the most demanding of rules and regulations and eliminates all fear when inspectors and auditors show up for routine recall tests. In addition, the ability to execute a speedy yet thorough recall when problems arise minimizes the risk to both consumers, and the manufacturer’s reputation. The bottom line: most food manufacturers are going to face a recall at some point. It is crucial to have the systems in place to react appropriately when that time comes.

How does it increase efficiency?

Due to the huge importance of lot tracing, manufacturers using manual systems often have some of their most competent and experienced employees devoted to the task. Even if these staff would be better suited to other areas, it’s just not worth taking the risk of assigning less experienced employees to the job. Digital lot tracing solves this by drastically simplifying the tracing process. Scanning a barcode and letting software do the rest is far quicker, easier, and less error-prone than meticulously creating and tracking hundreds of lot codes by hand. Meaning that you end up spending less time on tracing, and therefore less money, while winding up with data that is significantly more reliable. This both frees up an operation’s most capable employees to pursue new opportunities and allows anyone in the operation to take part in the tracing process. New employees can be trained and onboarded quickly, which is particularly useful for processors hiring huge amounts of new labor in the wake of COVID-19. 

All of this allows for greatly increased flexibility when it comes to staffing, and as COVID-19 turns the industry on its head the value of that flexibility has become crystal clear. While many of us have had the luxury to transition into working from home, that’s just not an option for many working in the food space. When employees are unable to attend work, for example if they are sick, someone else must step in. This can be a major threat to efficiency when the few people in your operation qualified to handle lot tracking are missing. In dealing with turnover and staff redistribution, there’s tangible benefit to having a system that allows employees to be effective, regardless of their experience level. 

For those looking to digitize their lot tracing, there is no shortage of solutions to accomplish that task. However, a sufficiently robust solution should go beyond just traceability. If you are tracking each lot as it moves through your facility, it creates great possibility to capture additional data such as yields, storage locations, and quality information. In this way, digital lot tracing can be viewed as a foundation on which to build even more extensive efficiency improvements. These additional features are some of the most important considerations for any manufacturer to make when choosing between available systems.

Preparing for an uncertain future

COVID-19 has proven that swift, unpredictable changes can happen in any industry, even one as foundational as food and beverage. With new issues such as shifting demographics, climate change, and the variable nature of trade on the horizon, it is likely that changes will become more frequent and even the smallest efficiencies will be essential to thrive.

Customer consciousness is also changing rapidly, and businesses that want to stay competitive have no choice but to change with it. As consumers and regulators demand ever more transparency and accountability from the food industry, reliable tracing data is becoming ever more crucial.

Manufacturers will undoubtedly rise to these new challenges in the future, just as they are rising to the challenges of today. And along the way, many will find a comprehensive digital lot tracing system to be one of their most valuable tools. 

Sources/Further Reading:

Acorn Surfaces & Treatments
for Concrete Restoration Products and Services

Breaux, Randy. “COVID-19 Shows the Need for Automation.” Foodprocessing.com, Food Processing Magazine, 2020, http://www.foodprocessing.com/articles/2020/power-lunch-covid-19-shows-the-need-for-automation/. 

Deloitte. Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence. 2010.

Demetrekakes, Pam. “How the Coronavirus Is Affecting Food Processing.” Foodprocessing.com, Food Processing Magazine, 2020, http://www.foodprocessing.com/articles/2020/how-the-coronavirus-is-affecting-food-processing/.

Lelieveld, H. L. M. Hygiene in Food Processing. Woodhead, 2017.

Stier, Richard F. “How Food Processors Can Create a Plan for Traceability and Recalls.” Food Engineering RSS, Food Engineering, 11 May 2020, www.foodengineeringmag.com/articles/98026-how-food-processors-can-create-a-plan-for-traceability-and-recalls.

Torero, Maximo. “How to Stop a Looming Food Crisis.” Foreign Policy, 14 Apr. 2020, foreignpolicy.com/2020/04/14/how-to-stop-food-crisis-coronavirus-economy-trade/. 

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Safety – Blockchain: What is it and does it live up to the hype?

Written by Hillari Bynum
Originally published in Innovation
20 July 2019

 

Hand touching global network connection and data exchanges on sky sunset background. Technology and telecommunication concept.

 

Blockchain Fundamentals

 

The easiest way to understand blockchain technology is to think of it as an electronic notary. A notary protects the integrity of a document by verifying the signer’s identity, making sure they aren’t being forced to sign under duress or intimidation and making sure they’re aware of the contents of the document or transaction. So, when a document is notarized, you can feel confident the document is legitimate.

 

Blockchain serves a very similar function.

 

A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”

 

Therefore, like a notary, Blockchain protects the integrity of the information stored within each block.

 

Why is Blockchain such a buzzword in the Food Industry?

 

During a foodborne illness outbreak, one of the biggest challenges is determining where the contaminated food originated from and where it was distributed/served/sold. There is not an easy way to track down this information; which makes managing a recall, or an outbreak, incredibly tricky, time-consuming, and dangerous.

 

Blockchain could change all of that.

 

Blockchain technology can keep a record of the entire supply chain. If Blockchain were implemented across the food industry, it would be possible to see everywhere a single piece of produce has been — from farm to plate. Consumers and food industry professionals alike would be able to see if a recall had impacted their produce or if it was from the same farm that is being investigated for a foodborne illness outbreak. Cool, right? It doesn’t stop there! This enhanced traceability could also help protect against food fraud by providing a verifiable record or every stage in the supply chain.

 

Okay great, let’s do it.

 

It isn’t that easy. There are a lot of very real obstacles in the way, and there is no easy solution.

 

Slow Supply Chain Adoption

 

In a dream world, when helpful technology is created, people rush to adopt it because they know it is valuable. In the world we actually live in, the reality is much different. Many key stages of the food supply chain operate with very low margins. Growers, packers, slaughterhouses, wholesalers, and harvest companies have very manual processes – and they don’t always have the capital to invest in technology. The other thing these companies are short on is time for training. Successful implementation of a new system requires time, money, and desire. When you’re operating with a shortage of time and money, desire is hard to come by as well. Transparency and traceability are popular ideas throughout the food industry, but when it comes time to actually turn that idea into reality, many companies have an “if it ain’t broke, don’t fix it”attitude.

 

The unfortunate reality is that people often pay the cost of food traceability at the early stage of the supply chain (growers, packers, processors) and the benefit is felt the strongest by those at the end of the supply chain (retailers and consumers). What this means is that we are asking the companies with the smallest margins to make the most significant investments – which they are often unwilling or unable to make. It is a fair point, outside of altruism, there is not a clearly defined business benefit to growers — so we are asking them to complicate their process, invest time and money, for little direct benefit.

 

This is particularly damaging because Blockchain won’t be revolutionary if it is only protecting part of the food supply chain. To be completely effective, every piece of the food supply chain needs to be on board.

 

 

Food Fraud is big business

 

Experts estimate that food fraud is now a $40 billion-dollar business. Unfortunately, the people committing food fraud are making a lot of money, and they are likely to be involved at some point in the supply chain. Blockchain and traceability technology threaten this business because of the technological ability to sound alarm bells and alert the world to food fraud. So, to protect their business model, these criminals will fight traceability implementation tooth and nail.

 

Too many independent systems

 

There are a lot of small-to-mid-sized companies offering traceability solutions, but unfortunately, these systems don’t always talk to each other. Blockchain success is heavily dependent on private tech companies being open to working together and sharing their data — which historically, they are not.

 

Traceability is different for different groups

 

Traceability varies by industry and product. For example:

 

  • Agriculture/Farming: Identification starts with the birth of livestock or planting and moves through the growth process, use of pesticides, nutritional records, vet records, and transportation records;
  • Food Processors: Identification starts at the source of each ingredient and follows through the processing, packaging, distribution, and transportation process;
  • Retail and Food Service: Identification starts with receiving receipts/invoices to identify the lot and batch information with regulations not requiring tracking “one-up” to the final consumer;
  • Transportation and Distribution: Commingling points of contact are vectors for the spread of disease. Waybills should contain source party and target party identification. Specific locations are needed for livestock in most countries. If products are disaggregated for smaller shipments, then records need to reflect lot/batch codes of the manufacturer or processor.

 

Different groups have different motivations, and it may be difficult for a system to accommodate the needs of each industry or product.

 

So, does it live up to the hype?

 

The short answer is maybe. Blockchain represents immense possibility, but it also comes with equally immense challenges. If the food industry doubles down on Blockchain and can secure engagement at every phase of the supply chain, the results would be revolutionary. However, if there is only partial adoption of traceability technology, it will be far less successful.

 

There is a reason to be optimistic, however! The FDA recently launched the New Era of Food Safety program that looks ready to move the food industry forward into new traceability technologies.