January 2012 | Commentary | IT Matters

5 Steps to Improving Food Product Traceability

Tags: Logistics I.T., Risk Management, Food Logistics

Brendan Lowe is president, Aldata, 617-986-5010

Food safety represents a pressing concern for consumers and food retailers. Several high-profile incidents have cost billions due to sickened consumers, lost sales, and contaminated products. If these occurrences have taught U.S. retailers anything, it's that the ability to react swiftly and appropriately to food-related issues is essential.

The passage of the U.S. Food and Drug Administration's (FDA) Food Safety Modernization Act has also increased pressure on food retailers to enhance traceability throughout the supply chain. In addition to granting the FDA power to mandate recalls, the legislation requires food facilities to evaluate hazards, implement preventive controls, and create food safety plans.

Under the new law, it is more important than ever that retailers have full visibility into their entire supply chain so they can track and trace goods. Retailers can also use traceability to help assure customers they can react swiftly to food safety incidents.

Past high-profile recalls have taken months to execute—a lapse that can hurt consumer confidence and sales. Consumers who fall ill due to contaminated goods may be reluctant to return to the store where they purchased the products.

Retailers can implement technology and processes to increase traceability and gain greater visibility into their supply chain. Here are five steps to help get a better view:

1. Collaborate with suppliers. Retailers need to ensure their suppliers have systems and software in place for forward and backward lot tracing, and the ability to easily link lot numbers with recalled ingredients.

For instance, suppliers should be able to determine when a lot was received in inventory and where the lot was consumed in the manufacturing process. This allows them to link the lot to the finished product's bar-code label. If a product is recalled, the supplier can use its systems to identify the finished goods that were produced with the ingredient lot, and notify customers who purchased those goods.

2. Implement tracking systems and software. Traceability is about tracking and recording product movement. Organizations can use tools such as lot codes, bar codes, and RFID to track goods. Once a system is in place, a retailer who is notified that a recall for a particular lot has been initiated can pinpoint exactly where these products are within the supply chain.

3. Integrate traceability with existing technology. Use existing systems to record the transformation and movement of goods from the warehouse to stores. Many warehouse management and order preparation systems can be used to record lot numbers and other essential information.

4. Create an alerts system. With an effective events-monitoring system, companies can notify managers across the supply chain when an incident occurs. This enables retailers to freeze inventory, whether it's in the store, the warehouse, or in transit. By linking these alerts to retailers' point-of-sale systems, they can also prevent further sales of the affected product.

5. Communicate with your customers. Retailers can use customer loyalty programs, such as rewards cards, to inform customers about product recalls. More retailers are taking advantage of these programs to send messages about contaminated products. Speedy alerts to customers can help further contain a recall.