Last time I gave you an overview over traceability. This time I will go into greater detail on value chain traceability.
When the term traceability is used we often means value chain traceability. Some time ago this was associated with «From farm to fork», meaning that a finished agricultural product could be traced back to the farm were it was produced. Recent attention to food scares have resulted in increased detailing, i.e. «From growing plant to fork» and «From animal feed and animal medicine to animal to fork». These two statements imply a greater level of detail, like knowing the genealogy of the seed used when farming grain.
Value chain is used as opposed to supply chain. One way of regarding a supply chain is as a network of companies that have customer-buyer relationships, like buying finished products and supplying raw materials. The main concern of participants in the supply network is its own goals, without the good of the network as a whole in mind. With pressures on the food industry coming from both authorities and consumers, a supply chain’s mindset can be insufficient for meeting challenges facing the industry. Value chains improve on this situation by formulating goals and purposes that are shared by the participants in the network. This requires closer cooperation and agreement between partners. Possible purposes can be:
- Meeting legal requirements associated with food safety, e.g. the EU Food Law or the US Bioterrorism Act
- Chain optimization to improve efficiency, product quality or both.
- Branding to make products stand out from the competition.
Value chain traceability often implies that the chain is transparent, i.e. that all participants are visible irrespective of who is looking. Such transparency can be seen as a source of risk, but the gain can be greater; brand owners can more easily create new forms of value for customers at quality, ethical or emotional levels. For the conscious consumer such aspects are clearly growing in importance. Some even claim that we will see value chains replacing brands in marketing activitites in the future.
Some application areas
Traceability offers opportunity to the food industry beyond compliance with rules and regulations that are appearing around the globe. Traceability enables companies to address market-place challenges by creating value chains to meet consumer demand.
In the graphic above we see a so called “global production batch graph” as illustrated in Tracetracker’s traceability navigation tool, called TT Navigator. [You can sign up for online demo at Tracetracker’s home page – this will allow you to play with the same material as that the picture is drawn from.]
The graph illustrates how a chain for fish farming and another chain for cattle farming have common factors in the origin of chemicals in the feed and in the retail stores where the finished products are sold.
This view could be a step on the way from;
- discovering a product with a problem on the right hand side;
- to identifying the problem as coming from the additives producer on the left hand side;
- to notifying other companies in the chains about the problem and their need to recall derived products.
All identified companies should be notified, as the affected product may survive inside the chain even it some has moved downstream.
Another use of traceability is often referred to as “value chain optimization”. Whereas optimization in supply chains is concerned with placement of inventory within the supply chain, value chain optimization aims at improving procedures and their implementation to make better products.
Consider for example a distributor of fruit and vegetables that must write off 5% wreckage due to storing products outside their allowed temperature ranges. By relying on a feature of Tracetracker’s solution called “stations” the company can track readings from temperature sensors along the distribution chain. Through agreement with suppliers, transporters and warehouses, these readings are combined in the GTNet to produce an unbroken temperature log, i.e. a complete map of the temperatures that the product has been exposed to. Whenever an amount of goods is discarded, the operator can study the logs to see where the temperature drifted outside the allowed range. The part of the chain where it happended is of course also readily available, so that the operator could approach its subcontractors to have them improve procedures. Similarly, having tighter control over environmental factors can be used to increase products’ shelf life.
Fish farming, and particularly farming of salmon, is an important industry in rural parts along the Norwegian coast. But the market often lies far, far away, for example in Japan. At the same time, fish quality is critically dependent on temperature during transport, and freezing is frequently used.
One of Tracetracker’s customers are using a particular patented freezing method. Together with being certified according to a number of quality standards and careful environmental concerns, they have succeeded in creating a brand that is recognized by world class chefs (e.g. Bocuse d’Or US) as being second only to fresh from the ocean. The company uses GTNet to handle traceability, distribution of product certificates, and in marketing.
The world map above shows two important aspects of modern production; ingredients can come from other countries, and markets can be in other countries. This clearly means that a solution for value chain traceability must be able to cross national boundaries. Solutions made for particular regions or niches will fail once globality is introduced. GTNet is based on Internet technology, and is therefore as globally available as Internet itself.
GTNet and EPCglobal Network
EPCglobal Network is an initiative driven by GS1 to create a global standard for real-time, automatic identification of information in the supply chain. Through membership in EPCglobal Network Tracetracker is participating in the work of most Software Action Groups [SAG] to ensure seamless integration between GTNet and EPCglobal Network. This way the state-of-the-art traceability network (GTNet) and the state-of-the-art supply chain infrastructure (EPCglobal Network) can be used together.