Traceability in Food Supply Chain

Traceability is an essential component of the food supply chain, since documenting food quality and movements through each supply chain step helps prevent the spread of disease and keeps consumers satisfied. The Food and Drug Administration (FDA) passed the Food Safety Modernization Act (FSMA) to address necessary tracking measures for food as it goes through the supply chain. Suppliers must meet the FSMA requirements or face liabilities and additional expenses. Failing to manage these food traceability efforts could lead to nearly $700 billion in excess costs globally.

By improving inventory management, supply chain managers can enhance their food traceability efforts. One way to approach inventory management is with integrated technology solutions. These options can help you improve data accuracy and make food supply chain traceability easier to manage.

The Risks of Poorly Managed Traceability for Food Suppliers

Supply chain managers and analysts in the food supply chain are often responsible for food traceability when it comes to order tracking. Without proper management techniques, companies could face severe consequences such as:

• FDA audit and liability: You could face FDA audits after recalls and other traceability problems. These audits could result in significant fines or revoked licensures. Your company would have to manage these liabilities and possibly pay settlements, further damaging your brand perception. You may also have to halt business operations while you resolve legal matters, causing more financial losses.
• Impaired recall management: Poorly managed traceability can also lead to complications with food-related diseases and recalls. If an issue is detected in a shipment before delivery, traceability allows you to identify other impacted batches before they reach consumer markets, protecting the public from food-related diseases. If a recall occurs, your traceability efforts make it easier to pull impacted items from markets and minimize lost sales. Overall, mismanaged tracking can have lasting impacts on your business’s bottom line and significantly affect consumer health.
• Loss of customer trust: If you fail to track food properly, it could result in widespread recalls, even including unaffected products. Consumers could lose trust in your brand and stop pursuing your products or services, or turn to your competitors due to empty shelves. It can be difficult to reestablish trust after consumers face severe implications such as disease, making this consequence a long-term issue.
• Negative environmental impacts: Traceability is also essential for environmental protection. Over 100 billion pounds of food go to waste yearly in the United States. This massive waste emits an additional 170 million metric tons of carbon dioxide into the atmosphere. Thorough tracking allows you to trace every movement through the supply chain, reducing lost items. Traceability can also reduce overproduction by helping companies order based on current supply chain demands. This focus helps limit overproduction and waste overall.

How to Improve Supply Chain Traceability

Despite the importance of supply chain traceability for food, many companies can face challenges while tracking products through the supply chain. Anything from omnichannel orders to disparate systems can disrupt traceability efforts. If your business is experiencing these challenges, you can improve traceability efforts by leveraging strategies and tools such as the following:

Integrated Technology

Integrated technology can transform your data tracking and traceability efforts. Integrating software with existing applications, data, and internal systems can give you a comprehensive view of all supply chain movements. In turn, you can eliminate manual processes and develop a deeper understanding of end-to-end supply chain activity.

Software solutions can assist with:

• Data accuracy: Supply chain technology can automatically transfer data between different internal and external systems. This connection results in precise data transmission between each partner and supplier. Integrated solutions can also provide audit trails, allowing you to match data across all transactions. You can use the details to ensure precise tracking as food moves through each supply chain level. In addition, data visibility makes it simple to forecast sales trends and adjust orders as necessary.
• Monitoring recalls: Integrated technology can also assist with recalls and meeting FSMA food traceability compliance. The software can help you identify specific batches that were impacted by food recalls through complete transaction audits that go back to the original supplier. Then you can pull the impacted items across any shipments they affected, but without recalling unaffected products, saving you significant time and money. In addition, technology can help with compliance requirements. For instance, an electronic data interchange (EDI) solution can pull related data and automatically log critical data entries. You can use these detailed sheets to prove compliance with the FDA in the case of audits or inspections.
• Communication: Integrated software simplifies communication between suppliers, third-party logistics suppliers, and other critical supply chain personnel. Faster communication allows you to impart tracking information or food updates more quickly, strengthening your traceability processes.

A notable example of using integrated technology for traceability success is The Little Potato Company. They leveraged TrueCommerce’s EDI solution to assist with communication and compliance. The software integrated with their Microsoft enterprise resource planning (ERP) system, streamlining order processing. It reduced manual processes and physical paperwork by shifting to a digital medium. The user-friendly interface also helped the company track products in a unified solution by providing complete audit trails of all transactions and movements.

Supplier Collaboration

Another area of focus to improve traceability can be improved supplier collaboration. Producers, vendors, and all other supply chain officials must follow identification procedures for food production. For example, it’s crucial to use item numbers, location numbers, and identifying barcodes for all products. These labels make it easier to address recalls later. Suppliers must also use enhanced data exchange methods to create optimal visibility in the supply chain. Integrated technology systems can also assist with data linking and rapid communication.

If you are a buyer with a wide range of suppliers, you may find that your non-EDI suppliers have a harder time maintaining the same level of accuracy as your EDI-capable suppliers. This can be problematic when it comes to traceability. You could require all your suppliers to use EDI; however, investing in a supplier enablement portal that includes data validation could also help while supporting your supplier diversity.

Increase Your Food Supply Chain Visibility

Product traceability remains a crucial aspect of the food supply chain, especially as they become more complex, global, and multifaceted. Implementing integrated technology solutions such as EDI can help you minimize risk and facilitate a healthy and secure marketplace.

TrueCommerce offers a wide range of solutions for the food and beverage supply chain industries, all of which integrate with your ERP system to ensure easier visibility and traceability from start to finish.

To get started with TrueCommerce, contact us or get a free demo today.

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