Businesses need to prepare for passage of the proposed Food Safety Enhancement Act, a response by lawmakers to recent incidents of tainted product. Like it or not, "government is now becoming more and more involved in helping to manage control of food and food safety within the supply chain," Kozenski says.
The development is likely to have "a dramatic impact" on the ability of food producers to move inventory to market, he says. They will face a marked increase in documentation and transactional requirements, as regulators seek more detailed information on their quality-control efforts.
Serious slowdowns in the supply chain could occur if companies tackle the requirement through manual processes. They might need additional labor resources in order to collect the necessary data and paperwork, adding to overhead expense. Even businesses that are able to monitor activity at their own plants could find it difficult to keep tabs on external suppliers. That, of course, is where many cases of tainted product tend to occur.
New tracking and tracing technologies can help. The most effective tools monitor inventory attributes associated with both raw materials and finished goods, Kozenski says. Companies will have to identify every entity and individual that touched the product, from the farm all the way to final delivery. Getting that information at the very beginning of the chain "is an extremely difficult task," he says.
Of equal importance is the need to track raw materials as they are incorporated into finished product. Companies will have to maintain a database showing precisely which goods contain a given material, in the event it is found to be tainted.
The problem for many companies lies in the fractured nature of IT systems that typically manage a global supply chain. It's hard to track inventory transformation when data can't easily be passed from a manufacturing application to one that manages finished goods in the warehouse. "If you don't make that relationship in some form, [the systems] are disconnected from a traceability standpoint," says Kozenski.
One way or another, enforcement of the new requirements is likely to raise supply chain costs. For companies looking to minimize their exposure, Kozenski says, the most efficient approach "is to automate these processes as best as possible."
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