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The Strategic Approach to Implementing Traceability Standards

The importance of produce traceability has been made devastatingly clear in recent years by well publicized incidents of illness, and even death, due to contaminated lettuce, spinach, cantaloupes and more. While officials in such cases spend weeks tracing the contamination to its source, all growers, wholesalers and retailers suffer market consequences.

The Strategic Approach to Implementing Traceability Standards

Meanwhile, changing lifestyle trends add to the traceability challenge. A greater focus on healthy eating is fueling consumer desires for a variety of fresh fruits and vegetables, while busy schedules create more demand for convenient, ready-to-serve packaging. And people in emerging economies around the globe are developing similar, Westernized tastes – all of which means that produce is shipped farther and subjected to more handling than ever before.

Most companies have had some sort of internal traceability in place since the Bio Terrorism Act of 2002, which requires the capture of product data one step forward and one step back. These programs vary widely in process and technology, however, and are simply not sufficient for today’s complex supply chains.

To find a solution that works, the produce industry launched the Produce Traceability Initiative (PTI). Started five years ago by a group of industry leaders, PTI is a voluntary, industry-wide effort to develop an external, standardized, case-level approach to produce traceability. The goal is to improve the speed and efficiency of tracing through every segment of the produce supply chain.

Under the administration of the Canadian Produce Marketing Association, GS1 US, the Produce Marketing Association and United Fresh Produce Association, PTI has successfully developed and tested a standardized label for cases of produce that leverages existing GS1 standards and barcode technology. A PTI-compliant label provides critical information in a standardized format by employing the GTIN number issued by GS1. The initial digits in each GTIN identify the company, while following digits identify the product in the case. Additional digits are added to PTI labels to tie each case to a specific lot. Users also have the option of applying a two- or four-digit voice pick code that eliminates the need to speak the long GTIN number in a voice pick environment. Additionally, there are standards for a hybrid label that consolidates information on all cases into a pallet label that can be read with a single scan. The information encoded in each PTI label also must be provided on the container in human readable form.

Through a number of pilot cases, PTI has proved the efficacy of its labeling protocol. Now it is time for the work of implementation to seriously begin. Walmart, which has been actively involved in PTI, is at the forefront of this effort. As of Nov. 1, it requires that all fresh produce delivered to Walmart and Sam’s Club distribution centers have case labels consistent with PTI standards. A phase-in period will give suppliers time to work with Walmart to comply, but the retailer says it will begin rejecting non-compliant shipments as of Jan. 1, 2014. Other major retailers, which also have been part of the PTI voluntary effort, are likely to take a similar approach. Moreover, the government has closely followed the work of PTI and indicates that it will take PTI standards into consideration when finalizing requirements under the Food Safety Modernization Act of 2011.

So there is no longer a question of whether companies – including growers, distributors and 3PLs – will have to comply with a traceability standard. That train has left the station. The question is how strategic they will be in doing so.

Indications are that only about 15 percent of affected companies are prepared to implement PTI labeling today. There basically are four ways that a company can go: A stand-alone approach that uses an independent software package with its own database and barcode printer; a module approach that adds an interface between the warehouse management system and the PTI labeling software to reduce manual data entry and improve accuracy; a custom approach that involves developing custom code for an existing WMS to send data to a barcode printer; and a fully embedded approach in which the solution is part of the core WMS software with no module or interface.

The first two options are little more than a “slap and ship” solution that adds costs for the supplier, while all benefits are realized downstream. This is the same situation that caused many suppliers to aggressively push back on early attempts to mandate RFID tags. The custom approach provides some advantages to the supplier but is more expensive and time consuming to deploy. Customized code also may not be compatible with future upgrades to the WMS or host system.

The best and most strategic approach is to make the traceability standards a new base functionality of WMS. This is the approach we are taking at AFS Technologies. With our WMS solution, all the data needed for a PTI-compliant label can be automatically captured and sent to a barcode printer. When receiving cases with compliant labels, a single scan is all that is needed to parse the embedded data and appropriately populate the WMS.

This approach also adds real value to the supplier as well as to the downstream customer. Data accuracy is nearly 100 percent and the visibility provided by this data can be used to drive operational improvements, particularly in terms of inventory management and order fulfillment.

Perhaps most important are the hard and soft benefits associated with facilitating recalls. If product data is stored in many separate systems or even filed in hard copy, tracing product is laborious, expensive and unreliable. Being able to print out a report that shows the location of your entire product inventory, by case and lot number, when and from whom it was received, and when and to whom it was shipped, makes tracing fast and accurate. It also shows that you are professional and prepared. But best of all, it can actually save lives.

Resource Link:
AFS Technologies

Keywords: warehouse management, WMS, Food Safety Modernization Act, supply chain risk management, supply chain management IT, traceability

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