TORONTO — Recalls are a fact of life for the food industry, and RFID traceability can help minimize their impact, according to Ed Treacy.
“Recalls happen every week in the grocery chain,” the senior vice-president of logistics for grocery giant Sobeys said Thursday. And they’re “hugely disruptive” to the business.
Whole-chain traceability can narrow the scope of recalls and minimize disruption, Treacy told the audience at a panel discussion on traceability at the EPCglobal Canadian Conference 2005.
But he was equally clear on what it can’t do. It can’t guarantee food safety, though it will help in conjunction with existing programs. And in its current form, at least, it’s not going to reduce operating costs.
There are three methods of tracing produce through the supply chain. Paper records are hugely inefficient. Bar codes have to be manually read, at a cost of three to six cents each time. Radio frequency identification tags cost five to 10 cents each, but it’s a one-time cost – the tags are automatically read when the produce changes hands.
“That’s the way we will achieve traceability economically,” Treacy said.
Better traceability of food products will be mandated by government – the Quebec is tightening traceability requirements for meat passing through the province effective June 2006, said Treacy.
And according to Dan Lutz, traceability team leader at Agriculture and Agri-food Canada, “there’s not a single indicator that this (trend) is going away.” Today’s standard is bar-coding and tomorrow’s is RFID. But working groups are already looking to biometrics and even DNA identification for tracking, he said.
Whole-chain traceability serves three strategic aims, Lutz said: Food safety; animal, plant and seafood health; and market development.
Lutz has been working with Can-Trace, an industry initiative to provide a framework to trace the origin and location of any food item in the supply chain.
But with three-quarters of the $7 billion of produce sold in Canada being imported, it’s an international industry and global standards are critical, said Jane Proctor, director of industry technology and standardization for the Canadian Produce Marketing Association and chair of the Can-Trace initiative. A bilateral task force of Canadian and American produce marketing associations will shortly release a uide to traceability that endorses Can-Trace’s work as a North American standard, Proctor said.
Big players in the food industry will embrace RFID when the time is right. “Very few want to be bleeding edge,” Proctor said. And there are still issues to be overcome: readability of the tags in humid and low-temperature environments of fresh and frozen produce, tag and infrastructure costs, and data synchronization. RFID can do a great job of capturing bad information, she said.
But according to Brian Sterling of RCM Technologies Canada, it’s time to “launch and learn.” Companies who wait to be mandated will view traceability simply as a cost, ignoring its real value.
“Most of the conversations (about traceability) begin and end around public health and safety and animal health,” he said. There’s more to it if the data is collected and used properly: branding benefits, risk mitigation, lower insurance costs and especially supply chain efficiencies.
“These are the longest term and most strategic benefits,” Sterling said. He cited the example of the automotive industry, which traces every component through the process. “The efficiency and effectiveness of that supply chain is absolutely reliant on that information,” he said.
And it’s critical that the information be complete, said Treacy. If he orders 1,000 cases of beef and the system only has the information for 995, “I’m now into a system-wide recall” across 1,400 stores in the event of a problem.
Susan Wilkinson, an associate partner with IBM Canada’s business consulting services, said the vision of gate-to-plate traceability has to reach the farmers and growers at the source, who are worried the system would be “an incremental cost without incremental benefit.” Small growers and farmers would bear an inordinate proportion of the cost of such a system, Sterling said, and government has to start a dialogue about how to make the benefits match the costs.