Food traceability regs are opportunity and cost

European legislation requires that traceability of food and drink is available from January 15 2004 – just two months’ time. This stark warning comes from Stephen Roe of supply chain consultancy Atos Origin. Speaking at a recent joint IEE/ARC/University of Cambridge seminar on ‘Operational Excellence in Consumer Packaged Goods Manufacturing’, at Queen’s College, Roe said that manufacturers have a choice – do nothing, do the minimum to comply, or exploit traceability legislation to address supply chain issues. He concedes that development of systems won’t be cheap or easy. The business reality is that, as with most EU legislation, there are gaps that will inevitably be interpreted differently across EU member countries. Furthermore, consumers will not pay for traceability. But the legislation does provide opportunities for manufacturers generally to address end-to-end supply chain visibility, shop floor data collection and so forth, and get better real time performance measurements in place. And Roe reminds us that there are numerous existing and emerging supply chain solutions, at several levels, which food and beverage – and other – manufacturers can apply without reinventing the metaphorical wheel. RFID, for example, is seeing considerable testing, and support software from the major ERP and supply chain system vendors will assure its spread. It is also the case that issues around traceability have for years been being aired and resolved, for example in the pharmaceuticals and aerospace and defence sectors. It seems “bizarre”, says Roe that the food and drink business is only now catching up considering that “we are what we eat.” Be that as it may, there has been increasing pressure for food chain traceability from all sides. Consumers have been voicing fears over food safety in the wake of GM and BSE, and demanding more choice. Retailers want higher service levels from suppliers. The industry itself wants to protect ‘brand’ value and reduce recall costs. The result is that government, at the national and European level, has responded. Traceability data will have to be made available to the authorities as from January 1 2005 under EU Regulation 178/2002 – Article 18, with ‘traceability’ defined as the ability to trace and follow a food, feed, food producing animal substance through all stages of production, processing and distribution. But this is not, says Roe, the whole story. The revised Product General Product Safety Directive (GPSD) (2001/95/EC) comes into effect one year earlier to ensure that food products can be traced to their point of production. This will impose major challenges on the food and beverage industries, impacting on all food and feed business operators including primary producers. It relies on a one up, one down approach, meaning systems and procedures must be in place to identify from whom and to whom these products have been supplied. Roe does not want to overstate his case: “There are many CPG companies that already have traceability systems in place,” he says. Moreover, there are lots of paper-based systems may be adequate. But there are, says Roe, three key requirements for traceability systems. Manufacturers must be able to identify batches of all ingredients and products. They must also have information on when and where they are moved or transformed, and they must have a system that links that data.