TECHNOLOGY: Put on a trace

Shoppers at outlets run by international retailer Carrefour can buy ground beef without fearing that the meat might make their kids sick. They know that the food they buy at Carrefour is safe because the grocer knows where it comes from and in what condition it arrives -- and knows this because it uses technology to keep a close eye on goods throughout the supply chain.

Here in the United States, though, the recent spate of recalls of tainted meat, after 170 reported cases of E. coli infection, serves as a chilling reminder of the U.S. food supply's vulnerability, and demonstrates the need for better retail-level preparedness as well as tougher legislation -- which could shortly be on its way, if Sen. Charles Schumer (D-N.Y.) has his way.

The threat of outbreaks of foodborne illness in the United States, which exists across virtually all food categories, continues to grow as food companies increase their use of global sourcing and outsourced manufacturing.

China, in particular, has been a source of much of the recent concern as a source for our food. The nation today plays a substantial and growing role in the global food chain, despite the fact that it has one of the highest rates of chemical fertilizer use in the world. As reported in The Wall Street Journal, China's agricultural exports to the United States alone have increased from $133 million in 1980 to $2.26 billion in 2006.

Unfortunately, much suspect product from high-risk countries continues to move along the supply chain largely unchecked. By its own latest accounting, the U.S. Food and Drug Administration had enough inspectors in 2006 to comb through only 1 percent of the 8.9 million shipments of food imported into this country.

The efficiency of today's global food supply chain inadvertently further increases the risk that thousands could be quickly exposed to a contaminated product, since the process is being continually tweaked to speed up the journey of products from farm to fork. Experts predict that in the event of bioterrorism, the poisoning of even a small amount of food would create unprecedented fear and panic among consumers. This makes effective traceability and rapid containment increasingly critical.

Other major food-importing countries have taken measures to reduce the likelihood of outbreaks, or the impacts of them should they occur. In Europe, for example, software systems that enable traceability -- the ability to track specific batches of product throughout the supply chain -- are mandatory.

Beyond mandates

In the United States, by contrast, proposed regulations to mandate these systems for retailers have thus far failed to get beyond the proposal stage. But in light of recent events, this will likely change. What's more, whether tracking and tracing systems become mandatory for U.S. retailers, more complex and stringent regulations will make such systems a practical necessity.

Besides regulatory pressures, other strategic issues such as customer loyalty, brand equity, business performance, and shareholder concerns are also likely to drive grocers toward technology systems that bear on food safety.

Researchers at the University of Arkansas, for instance, found that food recall announcements made by publicly traded companies cause the stock prices of all affected firms to decline. Not surprisingly, in the event of serious illnesses or deaths, a highly publicized trial can severely harm a company's image, while costing the manufacturers and/or retailers involved millions in legal costs and compensation. The most acute recent example of this is Elizabeth, N.J.-based Topps Meat Co., which was forced to close last month, due to a rash of illnesses linked to tainted ground beef made in its plant.

Carrefour, meanwhile, has boosted its customer loyalty by employing systems developed to follow fresh food throughout the supply chain. The systems label every produce item and various other fresh food products with a bar code that contains tracking information, so the retailer knows exactly where the item began its journey; the duration of that journey; what changes, if any, to conditions such as temperature might have occurred; and where it might have been transferred.

To inform its shoppers of the enhanced safety these systems deliver, Carrefour created a "Quality Line" stamp -- a guarantee that the product comes from local producers that have agreed to tough quality standards.

Such a strategy can only work, however, when the retailer can show that it accurately and consistently identifies a product's source.

Get on track

No one traceability system is the universal answer to this challenge, but whether RFID, events-monitoring functionality, or bar code label capability with advanced tracking intelligence is deployed as part of a traceability strategy, retailers should ensure that the track and trace solutions they evaluate would:

--Track the movement of products through the entire supply chain,

--Offer lot-tracing capabilities to enable accurate tracking of affected product,

--Provide real-time visibility and control of product movement throughout the process,

--Enable detailed recall notices to be rapidly delivered to the proper locations,

--Integrate with existing systems and applications through industry-standard protocols and interfaces, and

--Conform with global standards, such as GS1 and those established by the EAN.UCC, ensuring application interoperability and preventing vendor lock-in.

Bruce Bowen is v.p. of sales for Atlanta-based Aldata Solution, Inc., and has more than 15 years' experience in retail information technology.
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