Tracing the Calls
Amid the frenzied rate of industry deal-making that’s dominated the headlines for much of the year, a number of other percolating issues are simultaneously heating up, including the Produce Traceability Initiative (PTI), which is poised for a transformative kick-start in the coming weeks by two of the industry’s most respected retailers.
As previously announced, Walmart and Sam’s Club will soon begin rejecting produce from suppliers that don’t comply with PTI guidelines (more on that momentarily), while Whole Foods Market is reportedly preparing to soon follow suit with its own traceability mandate, which informed sources tell us will lead with produce and likely eventually migrate to the Austin, Texas-based retailer’s meat and seafood departments.
Publix Super Markets has also made clear its plans for PTI implementation, as outlined in a recent memo to the group’s member-sponsors – the Canadian Produce Marketing Association, GS1 US, the Produce Marketing Association and the United Fresh Produce Association. Having organized a PTI project team following the initiative’s guidelines to formulate the infrastructure and train employees and suppliers, the Lakeland, Fla.-based grocer has implemented radio frequency receiving that allows it to scan by lot code.
Meanwhile, as affirmed in a letter to its supplier partners in late May undersigned by Wal-Mart Stores’ VP of Produce/Floral Dorn Wenninger and Russell Mounce, Sam’s Club’s senior director of produce/floral, all fresh produce delivered to its distribution centers will be required to have standardized case labels, consistent with PTI standards, effective Nov. 1, 2013. The mega-chain’s supercenters and club stores receiving specifications will be updated with a requirement for a standard case label including GTIN, lot/batch number, voice pick code and pack- or sell-by date.
While the Bentonville, Ark.-based chain’s fresh produce leaders said their teams will work with suppliers to grant an extension to those demonstrating a good-faith effort toward standard case labels by using the “spec exception process,” the pending mandate – predicated around transparency and efficiency – seems likely to galvanize the traceability movement in the weeks ahead, provided the plan proceeds as articulated.
In many observers’ minds, present company included, Walmart’s, Whole Foods’ and Publix’s clout will decidedly be put to good use for PTI, which launched six years ago with a vision to achieve supply chain adoption of electronic traceability for every case of produce, to maximize the effectiveness of traceback procedures while developing a standardized approach to enhance the speed and efficiency of traceability systems.
And though many produce trading partners have straddled the fence to get on board with PTI, largely due to their reluctance to justify the required investment in what they believe yields limited returns, the aforementioned retailers’ unambiguous compliance expectations are indeed stimulating a heightened sense of urgency among growers, shippers and importers, according to leading traceability platform providers.
“We have reached a tipping point where the majority of the industry is getting behind PTI,” said Elliott Grant, founder and CTO of Redwood City, Calif.-based YottaMark, whose HarvestMark platform “not only helps customers meet government and industry requirements,” but whose analytics also have vast potential to drive additional profit for retailers in an economically viable manner.
Raley’s Family of Fine Stores earlier this year tapped HarvestMark's traceability and insights platform for its distribution center (DC) quality solution, which enables the West Sacramento, Calif.-based regional grocer to monitor products at the point of receiving while optimizing its supply chain to deliver superior-quality produce to shoppers.
In a textbook example of how improved transparency creates greater value, companion PTI insights enable retailers “to make smarter choices about their sourcing and receiving process, reducing shrink and markdowns, and optimizing freshness and quality, which ultimately results in improved shopper loyalty,” notes Grant.
What’s more, suppliers can be benchmarked and alerted when unexpected defects occur, and advised on how to correct them, increasing overall quality. Related insights can further assist buyers in anticipating seasonal disruptions in supply and improve forecasts.
Retailer PTI mandates have had ripple effects beyond domestic growing operations, says Grant, noting that the adoption rate is especially strong in the international supplier community, as well as increasingly with smaller players, “who are relieved to be able to comply very cost-effectively."
“The PTI provides more than just a platform for managing recalls,” continues Grant. “Whole-chain traceability has the potential to vastly provide supply chain insights that lead to greater efficiencies, reduced waste and faster decision-making,” among other compelling benefits.
Beyond the obvious compliance and transparency benefits is an embedded common language for electronic record-keeping, sourcing and quality management, which nullifies additional labor requirements for retailer/wholesaler EDI platforms, and which interestingly underscores the primary PTI requirements for retailers using outmoded warehouse systems.
While the latest PTI developments will undoubtedly factor heavily in trading partner discussions at PMA’s upcoming Fresh Summit International Convention & Exposition, which convenes Oct. 18-20 in New Orleans, the implications of PTI are far greater than a produce industry-specific concern when considering the pivotal bottom-line contributions the category makes to grocers’ precious bottom lines.