The 4-step guide to food supply chain traceability

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Categories: ERP, Food and Beverage, Sage X3
August 15, 2017

Food traceability requires technologies that allow for powerful interactions across the supply chain.

Food traceability has its roots in 1930s Europe, where countries wanted proof that high-end products like French champagne were indeed products of the regions claimed on labels.

Today, traceability takes on many different forms. Food manufacturers need to have powerful systems in place to manage traceability, Why? There are increasing regulatory requirements to protect consumers from foodborne illnesses and respond to recalls promptly. Like citizens 80 years ago, traceability is also needed to satisfy consumer demand for ingredients and foods from a global market.

Traceability has two essential components:

  1. Tracing provides a history of each food product’s journey throughout the supply chain, from farms that produce ingredients to how those ingredients are combined to where those finished goods are inventoried on site. Tracing offers a transparent picture of a product’s history from its origins forward.
  2. Tracking allows for the accurate identification of a product’s journey after it leaves a manufacturing facility up to its final destination, whether that is a restaurant, grocery store, or consumer. 

Both tracking and tracing can be done on an individual unit or batch basis. No matter what process is used, these weighty responsibilities require technology solutions that monitor processes, from ordering to production to inventory to transportation. These same solutions need to allow for powerful, real-time track and trace functions throughout the supply chain.

With so many requirements and pressures facing food and beverage makers, it is important to understand deeply why traceability is essential and what companies can do to ensure they are compliant and responsive to demand. Below is the 4-step guide to food supply chain traceability.

1. Understand the positive benefits of traceability

Traceability is a good thing for several reasons, including:

  • Preventing foodborne illness. Ingredients and foods are coming today from a global supply chain. As the world’s populations mingle and settle in far corners of the Earth, people expect access to tastes and products from their natural and adopted homes. With more exposure to different foods and ingredients, tracing origins helps prevent outbreaks of harmful pathogens such as E. coli, listeria, and salmonella.
  • Promoting sustainability. The United Nations reports that 20,000 seafood products can be traced to certified fisheries. Certification programs, such as those run by Bonsucro for the sugarcane industry, can reduce emissions and promote sustainable growing programs. Launched in 2011, Bonsucro’s certification program resulted in a 323,000-ton reduction in carbon dioxide emissions.
  • Good business practice. Consumers are demanding more traceability, expressing a preference for products grown organically and using sustainable practices.
  • Increased market share. When done properly, traceability allows food producers to offer with confidence new products, flavor profiles, and preparations that resonate with consumers’ ever-evolving preferences. Traceability helps grow market share with the lowest possible risk profile for new products.

2. Be aware of challenges and threats to food safety

Traceability is becoming a more critical issue worldwide. The global food supply is a complex maze of producers, manufacturers, distributors, providers, and end users. As the food supply has become global in scope, it must address major country-by-country differences in industrial processes, regulatory requirements, and ever-evolving consumer tastes. Finally, customer awareness about food safety has never been higher. Companies face major legal exposure and PR disasters when foodborne illness breaks out.

In addition, the manufacturing wing needs to address other threats, including:

  • Fraudulent activity and counterfeit products in the global food chain
  • Sourced products and ingredients from countries with lackluster or nonexistent traceability and food safety protocols
  • Increased risk for contamination due to large and complex supply chains
  • Risks of terrorism to the food supply

Without sound traceability protocols in place, companies face considerable problems in the case of a recall or food safety issue, including economic loss due to recalls and loss of consumer confidence.

Food traceability ensures the safety of consumers who are seeking global tastes and ingredients.

3. Leverage industrial relationships

Industries and particular sectors have resources committed to helping companies understand the complexities, regulations, obligations, and opportunities traceability represents. One example is the Institute of Food Technologists’ Global Food Traceability Center (GFTC).

The GFTC helps food companies trace products throughout the supply chain, reduce risk, ensure public safety, and reduce economic loss. The center also provides tools for seafood traceability and consumer preferences; access to journal articles, white papers, and briefs; newsletters, presentations, and webinars; and guidance documents.

The GFTC also has funded or partnered with industry on eight projects to improve traceability. They provide interesting insights into the opportunities for companies going forward, including:

  1. A report on how food traceability relates to an overall food protection plan
  2. An ongoing traceability webcast series
  3. An assessment of the capacity for traceability systems that will help in the design and development of traceability programs in nine Caribbean countries
  4. A report comparing global food traceability regulations and requirements
  5. A guide for government regulators on some of the best practices in food traceability, urging the use of uniform data collection and record-keeping guidelines
  6. The seafood traceability financial tool and consumer preference tool, based on research into the use of traceability to reduce waste, improve consumer trust, and increase efficiency
  7. An in-process interoperable traceability architecture that would give all participants a blueprint for understanding roles within the system
  8. An in-process public-private partnership to combat fishing and seafood fraud issues in southeast Asia.

4. Take steps needed to improve traceability

With the advent of new federal regulations via the Food Safety Modernization Act (FSMA), manufacturers face increasing government scrutiny in supply chain operations. To maintain compliance and create sound business processes, there are several important steps companies should take:

  • Know the regulations. The FSMA includes rules dictating the preventive controls in place at food manufacturers; third-party verification of food and ingredients within a supply chain (including those from foreign sources); records and retention; sanitary transportation; and recalls. Many of these guidelines are now in effect and require new documentation, procedures, and reporting mandates.
  • Complete an audit. A comprehensive audit helps identify any flaws in processes related to traceability and can be done by an accrediting organization or an internal audit process.
  • Assess equipment. Each piece of equipment should be evaluated and inspected regularly to make sure it is working properly, to confirm that any repairs or replacements needed to ensure efficient operations are completed, and to ensure that problems are solved early.
  • Understand the sector. While traceability is an important issue for every manufacturer, there are sector-specific issues that require particular knowledge. Requirements for fresh food, for example, can vary widely from country to country regarding products, sourcing, and labeling.
  • Collaborate across the supply chain. Technology today helps supply chain partners stay connected and can be great collaborators in sharing information, guidance, and solutions related to traceability procedures. Transparency helps to ensure that the best thinking can be applied to situations.
  • Focus on efficiency. Downtime and waste are two major problems for many food manufacturers. Implementing a new traceability plan is an opportunity to look closely at processes and improve efficiency in these and other operational areas.
  • Establish policy. Policy documents ensure that procedures are documented and adhered to, reducing the risk of errors and liability. Such documents help employees, contractors, suppliers, distributors, and users to follow proper guidance on foods and ingredients.
  • Educate as necessary. Employees, suppliers, and distributors need to be trained in the policies and procedures necessary to ensure proper compliance with traceability.
  • Prepare for possibilities. Worst-case scenarios, however unlikely, can happen. Food manufacturers that are prepared for these eventualities will be better prepared in the case of any possibilities, no matter how remote.
  • Anticipate the future. As you add equipment and other resources, it is often prudent to anticipate future demand and capacity needs and make purchases that allow for flexibility and scalability.

Finding a partner for technological solutions

Traceability is essential for business success today. That is why NexTec offers creative solutions that help companies simplify the complexity of food manufacturing.

Enterprise resource planning software is a powerful tool that helps companies track and trace food manufacturing. In addition, the right ERP solution helps companies integrate myriad business systems.

ERP solutions for food manufacturing integrate functionality from business units such as finance, accounting, accounts receivable, and accounts payable with customer-facing sales and marketing areas. They also connect those areas with production, quality control, regulatory compliance, inventory, and transportation units.

With enhanced synergy, companies can gain decided advantages. ERP solutions like Sage X3 help companies offer real-time data to employees. In turn, those employees make better-informed decisions, respond to issues faster, and communicate more effectively with key players within their company and their supply chain.

Sage X3 offers supply chain functionality that facilitates better management, collaboration, and compliance on a global scale. Its operational tools include food safety solutions, traceability, recall management, and allergen reporting. Its customer service functions allow for better data collection and analysis to improve relationships with key customers.

NexTec’s consultants work closely with our customers to understand their needs, challenges, and opportunities. With strong relationships with ERP solution providers like Sage, we can recommend the right solutions for your food manufacturing company to make food supply chain traceability a breeze. To learn more about how NexTex can help your company, download the NexTec Food Brochure.