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Minimal Food Traceability Standard: Agreement on the Basics
Thomas R. Cutler, President & CEO, TR Cutler, Inc.
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At the recent Traceability Inter-Operability Conference hosted by the
Traceability Institute in Denver, Colorado, a few weeks ago, there was a
strong call for a single traceability standard. The messages at this recent
conference were the same as those at the early banking conferences thirty
years ago – “Adopt a single traceability provided by my company and
everything will be perfect.”
According to Will Pape, Executive VP & Founder of TraceGains, “This argument
and this conference took me back to the early 1980’s when I attended similar
data interoperability conferences about how banks should be working together
to begin electronically process credit cards. At that point in time, credit
cards were handled manually rather than electronically. Many of you are old
enough to remember the time when, at retail check-out, the store’s cashier
would put your credit card in a flat-bed device, nicknamed a “click-clack”
machine, then put a receipt form on top of the credit card, and finally
slide the click-clack machine’s lever from one side to another, making an
impression of the credit card and the merchant’s information on the two-part
paper form.
After signature, the top paper copy was given to the customer and the
bottom, cardboard copy was retained by the merchant and processed by the
banks the same way they processed their checks at some later date. In the
early 1980’s, the banks knew there were compelling reasons to process these
transactions electronically in near real-time rather than wait many days to
enter into their system, but they couldn’t agree how to process and exchange
this information. So, they held a number of conferences where each solution
provider or “wanna-be” central data switch presented the arguments about why
their company should be the one and only company to provide this electronic
data interchange service and why their data standard was the only one that
would work. Not only wasn’t a single standard adopted in the early 1980’s,
but each time you use your credit card today, it is likely to route through
many different networks, each with a different data standard, and still be
able to provide an approval or decline in a matter of seconds. In fact,
there are over 64,000 different data standards and hundreds of different
networks in existence among the global banking industry but to almost all
consumers it appears as a single system.”
The main barrier to widespread traceability adoption by the food industry
was the lack of a single traceability standard which could exchange
traceability data seamlessly from one company to another throughout all
their trading partners in a supply chain.
Unfortunately, each speaker at the conference was talking only about the
traceability standard that their company commercially offers, and their
implicit message was “If only everyone would speak my language, all
companies in the food supply chain would be able to communicate and this
industry would begin to rapidly grow.” One could only conclude the
presenters wanted all of the other solution providers in the audience to
abandon their traceability solution and jump on the presenter’s bandwagon –
“my way or the highway”.
Pape insists that this is a flawed perspective on at least four levels.
Firstly, there is the assumption that the lack of a clear interoperability
standard is retarding the growth of traceability within the food industry.
Secondly, this assertion assumes that a single standard will result in the
best solution. Thirdly, there is assumption that a single traceability
company will win all the chips. And fourthly, that full transparency of all
traceability information equally shared with all trading partners is a good
thing.
Based upon our experience in the global credit card industry, we believe
each of these assumptions is false.
Pape argued, “The growth of traceability companies is not being impeded by a
lack of traceability interchange among companies because most companies
haven’t even taken their internal traceability conversation to that level.
They are only concerned about internal traceability within their four walls,
and they think they have already solved this problem with their one-up
supplier and their one-down customer so they don’t need the help of a
third-party traceability supplier.”
No single standard will meet all of the needs of every member of a
single supply chain much less all supply chains.
First, there has to be a realization that no single company and no single
standard will capture the entire market. Just as with the credit card
system, each company and supply chain will have its own unique objectives
for a system. These objectives will be different even though there will be
at least one common objective: being able to provide at the appropriate time
and ePedigree for ownership of all the ingredients in a product. This
pedigree must be traceable from the retailer all the way back through all
upstream processors to the first mile producers of all raw products used in
a specific finished good.
Pape believes that accomplishing this objective only requires that a few
“standard” things be accomplished:
- Agree on a numbering standard or a small set of numbering standards.
- Agree on the minimum data elements that must be included by all players to create the ePedigree ownership traceback.
- Agree how ePedigree data about upstream suppliers beyond the immediate supplier must be kept confidential until these data are needed during a high-profile recall.
He concedes, “These are standards, but they are very minimalist and skinny
standards, and are the skeleton upon which many traceability solution
vendors can hang added value services, and distinguish themselves among
other traceability solution providers.”
When principals similar to these three were applied to the credit card
industry in the early 1980’s, the electronic authorization and settlement of
credit cards did begin to rapidly grow.
Complacent food companies that think they have already solved the
traceability issue will quickly find when they become involved in a high
profile food recall that their systems fall far short of the mark, and their
company is badly damaged or even destroyed.
Thomas R. Cutler is the President & CEO of Florida-based, TR Cutler, Inc.
Tom is the founder of the Manufacturing Media Consortium of 3500 journalists
and editors writing about trends in manufacturing. He is a member of the
Society of Professional Journalists, Online News Association, American
Society of Business Publication Editors, Committee of Concerned Journalists,
as well as author of more than 300 feature articles annually regarding the
manufacturing sector. Tom is also the developer of lean technology C.E.O
(Continuous Experiential Optimization). Tom can be contacted at
trcutler@trcutlerinc.com
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