Who’s going to pay for traceability?
That’s a common question in the food industry these days. A senior director in a well-known food company told me recently, “No one will pay for traceability.”
Of course, a traceability system is going to have costs associated with it. Initially there’s the cost of implementing a solution with equipment, software, services, and internal resources. Ongoing costs add up for materials, system maintenance, and labour associated with additional process steps.
It’s not likely that the average consumer will be willing to pay extra for product that is traceable back to the source. I don’t expect my wife at the grocery store to look at two similar packages of meat, for example, and say to herself, “Oh, this one’s traceable. I’ll pay the extra price for it.”
Retailers likely won’t pay for it. You know how it goes. They’ll expect both traceability and lower prices.
So it appears that the costs of traceability, like so many other initiatives, will fall on the backs of the processors and manufacturers.
But it doesn’t have to be the case. If things are done well, there is actually a pretty good deal available for the food processing companies. (Just don’t let the other parties know.)
For the most part, the food industry could use a good shot in the arm to update their level of technology in order to achieve higher levels of productivity and lower production costs. It’s time, and the increasing need for traceability may actually be a great tool to realize huge benefits.
While many expect companies to already have suitable internal traceability, what is all too common are manual systems based on paper files – even in 2010. Plus in most companies’ operations there are gaps in the data chain, lack of real-time data visibility, and islands of technology. Internal traceability? Hardly.
The time for internal traceability in organizations is ripe. And the potential benefits really are significant.
Internal traceability should not be embarked upon as a solution in itself. It should, in fact, be seen as a by-product of a complete plant productivity solution that incorporates visibility and control tools. With all product movements and transformations being monitored in real time, internal traceability will be one of the outputs of the right kind of system.
Here are some great benefits of implementing a complete internal traceability solution:
| Area of Benefit | Some “Top of List” Benefits |
| Brand protection | Risk management with complete lot traceability |
| Labour reduction | Automation, less time searching, counting |
| Productivity | Visibility leads to better decisions and more efficient processes |
| Cost control | Better management of raw materials, improved yields, production goal monitoring |
| Label control | Central label design, approval process, database-driven product, nutritional, and ingredient details |
| Quality improvements | Attribute checking, better stock rotation, lot control, quality checklists, SPC on piece weights, QA holds, process control |
| Better customer service | More visibility of orders in real time, improved image, more accurate order fulfillment |
| Regulatory Compliance | Food safety & quality, HACCP, record keeping, weights, labeling, nutritional & ingredient declaration, traceability (e.g. one-up, one-down) |
| Insurance | Rapid detailed recall capabilities, support for limited recall scope, due diligence to help reduce litigation risk |
Take a look at your organization in light of these potential benefits and see where you can find significant improvements. It’s likely that you could easily cost justify the right solution that will offer many of these benefits.
Don’t focus on the costs of internal traceability. Consider a full, detailed plant productivity solution that gives complete real-time visibility of products and events, and internal traceability will be one of the built-in deliverables. Implement a technology solution for in-plant benefits that will pay for itself.
Stay tuned. We’ll review the many components of an Internal Traceability solution and how they produce benefits.
