Made up of multiple stakeholders, the agricultural supply chain is one of the world’s most vital conduits between producers and consumers. It’s guided by international standards and rules on the recording, storage, and maintenance of key information points, with the goal of achieving maximum safety and efficiency. The result is strong enforcement of transparency throughout the supply chain.
Modern-day technologies have introduced the concept of end-to-end traceability, with a foundation built on the internet of things, big data, analytics, mobility, and pervasive computing. Nevertheless, variations in geography and environmental conditions make the tracking of agricultural commodities highly complex. The agricultural supply ecosystem needs to embrace technologies that provide visibility into all transactions, and monitor any risks of disruption.
Traceability enables the capturing of all handshakes, hand-offs, and value-added processes performed on the product as it moves from field to fork. It adds a sense of responsibility, making the owners of each step accountable for their actions.
Traceability provides a level of integrity that instills buyer confidence and allows the enterprise to maintain its brand value. Additionally, it keeps retailers and consumers up to date with information that can help mitigate the risk of recall damage and litigation. When it comes to agricultural commodities, the risk of contamination and spoilage is grave, with human lives at stake.
The ability to track and trace is moving up the priority list to such a degree that it has generated a wave of backward and forward integration for better control and regulatory compliance.
Despite this acceleration, however, there are still relatively few industry-wide implementations. To be sure, major players are rushing to adopt the technology, but the myriad of smaller entities are on a slow journey to compliance.
Consider the recent recalls of automobiles across the globe, due to the dubious quality of critical components such brakes, seat belts, and airbags. Most multinationals were able to quickly recall select lots of affected vehicles for several key reasons, including the use of scientific techniques to codify and tag products stored in vast data warehouses, and the existence of mandatory national and international regulations that govern such products.
In 2018, the agriculture industry produced commodities worth $5.08 trillion, and contributed to 6.4% of world’s GDP. China and India led the production, with the U.S. ranking third. Today, fresh agricultural products can come from just about anywhere. A consumer in India can be munching on Washington apples or enjoying fresh kiwis from New Zealand. This is made possible by the localization of internationally coordinated supply chains. Big grocery outlets such as SPAR, Carrefour, and Tesco are springing up in every neighborhood.
Such omnipresence comes with the need to comply with global standards and safety regulations. Essential attributes such as quantity, quality, delivery standards and price points need to be controlled throughout a synchronized supply chain.
Visibility and traceability play an important role in safeguarding product flow. Consumers today demand products of the highest quality and nutritional value. That’s especially the case with the burgeoning popularity of organic foods. Stringent checks and frameworks enacted by food and drug authorities warrant the need to capture every point through which product passes on its way to the shelf.
Even with the availability of the right raw materials, including soil and fertilizers, transportation modes need to accommodate short shelf life and the perishability associated with “natural” products. Long trucking queues and lengthy clearances in road transport can affect on-time and in-full delivery, and consequentially the profitability of the product.
Product processing is a major step in the chain. It includes functions such as re-packing, ripening, cold storing, testing, inspection, and forward shipment. Most of those steps directly affect the quality of the product. Yet many operations are manual and spread out among various contractual agreements. This means that transparency in the supply chain is often severely diminished during processing, with products prone to spoilage or contamination.
Even today, most of the developed world still operates in open retail markets for the buying and selling of agricultural products. This makes tracing the roots of produce difficult for the retail buyer. The consumer purchases the item and walks away on blind trust. Yet with the recent spate of massive disease outbreaks such as salmonella, hepatitis A, and E.coli, the need to monitor and log the flow of the product more critical than ever.
The latest wave of industrialization, called Business 4.0, promotes the use of cyber networks and digital systems, especially for the agricultural industry. Critical data points include producer, quality criteria, and logistics parameters such as temperature, humidity, and delivery conditions. Technologies that enable the real-time capture of such information include:
An article by ICTworks summarizes the benefits of traceability by detailing these advantages:
Other benefits include improved efficiency and productivity through automation and robotics, stronger brand equity and enhanced customer satisfaction through transparency and accountability, and greater sustainability through dependence on paperless testing and records storage.
The ROI is clear. Supply networks, being so vast and complex, need to be modeled down to the lowest-level processes, with all stakeholders and activities identified. Material, information and cash flow must be mapped properly in order to record all important data points. Tamper-proof data vaults must be deep enough to hold such information for long periods of time. Companies need to look toward Business 4.0 technologies to create supply network track and traceability throughout the agriculture industry ecosystem.
Matthew Lekstutis is global managing partner of Supply Chain Consulting, and Selva Rajah is head of Supply Chain Center of Excellence for APAC, at Tata Consultancy Services (TCS).
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