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Is my traceability performance "good enough"?

Introduction By Julie Barrett O'Brien

Coffee & Tea Traceability: at the Click of a Button

If you are asking yourself "What is traceability?" and/or "Should I integrate a traceability solution into my supply chain?", then the following article, written by four senior managers from John Deere Food Origins, is just for you.

But before you get started, frame your thinking with the following anecdotes in the following ideological metaphor:

* Imagine a world where at the click of a button, a retailer can scan an SKU and know exactly from which farm(s) the coffee or tea was purchased.

* Imagine a world where at the click of a button, a retailer can identify the chemicals used on the farm.

* Imagine a world where at the click of a button, a mill can locate exact qualities, quantities, and location of their inventory.

* Imagine a world where at the click of a button, you can answer all government regulatory questions.

* Imagine a world where at the click of a button, you can answer the question "How much did that farmer get paid?"

This "click of a button" scenario world is not so far away, and for good reason. Tracking and tracing provides valuable benefits including identity preservation, product differentiation, operational efficiency, quality control, meeting regulatory demands and brand equity assurance. As the following article highlights, how much you want to know will dictate how far you have to go with a traceability program.

Is traceability feasible? Yes. Easy? No. But neither was the integration of technology into a paper based system. Can you imagine the world today without email? Nether can I, and I can not imagine our future coffee and tea supply chains without traceability.

We've worked with a number of food companies that have told us they have "pretty good" traceability, maybe even good enough to meet the FDA's Bio-Terror and Preparedness Act "one-up, one-back" recordkeeping provisions, or industry sustainability demands. After all, they have detailed accounting records for the purchase of raw their coffee or teamaterials and the shipment of finished goods. Doesn't this qualify as "pretty good" traceability? What is the point of going any further? Why bother tracking across the entire supply chain, as a product is grown, bought, sold, transported, and processed?

Like most questions worth exploring, the answer lies not in black or white certainty, but with an equivocal "it depends." Traceability has no intrinsic value in and of itself; rather, it is the well-designed application of traceability that has meaningful business impact. Therefore, the question "is my traceability performance good enough" is the wrong question. Evaluating a traceability program without a well-defined sense of purpose as "pretty good" is a bit of a fool's errand without asking the right question up front: "what business objectives do I want my traceability program to achieve?" It is only in this context that your traceability strengths, weaknesses and requirements will come into focus.

Traceability Needs Assessment

When considering your traceability requirements, always keep the operative question at the top of your mind: what problem is it that I am trying to solve, and/or what opportunity, is it that I am trying to capitalize on? From there, every action you take must be focused upon enabling the achievement of those well-designed goals.

While planning is no substitute for action, action not tethered to a well-thought-out plan is just energy randomly expended. That is why when considering the nature of your traceability program, the time spent in defining the opportunity or problem will be the most important investment you can make in a traceability program. Following are some of the objectives we have observed that coffee, tea, food and beverage companies try to achieve when deploying their traceability programs:

* Brand assurance

* Identity preservation

* Inventory management: managing raw material to specification

* Benchmarking farmer performance

* Documentation to substantiate branded claims

* Contract compliance

* Customer management

* Regulatory compliance & food safety

Normally, a firm will require attaining more than one of these objectives, but rarely all of them. Happily, the traceability capabilities necessary to achieve many of these objectives are highly leverageble, providing significant opportunity to build a compelling business case for improving your traceability capabilities. For example, the information required to track inventory lots to contain manage performance a potential food safety incident can also specifications also serves as a documentation audit trail that substantiates a brand claim being made in the marketplace, e.g., country of origin, shade grown, fair trade, GMO free, or organic.

Drilling down on the requirements of your traceability program, the following questions must he considered once your overaching objective has been established to determine what the desirable outputs of your traceability program are to be:

* Who is the primary consumer of the output? Who will benefit most?

* What traceability information does your stakeholder want to know about your food coffee or tea product?

* Is the requirement for traceability information explicit or implicit?

* How will traceability information be applied to create value in the supply chain?

The answers to these questions will guide the scope and overall design of your traceability program, ensuring your resources remain focused on high-impact activities.

Let's explore these design requirements in the context of a specific example, where we'll choose one of the overarching business objectives to achieve as described earlier. Suppose you are an exporter of an organic food, coffee or tea product to Japan, and your primary business objective is to retain access far your product to the lucrative Japanese market. To do so, you must be certified to comply with the Japanese Agricultural Standards (JAS), which require detailed, thorough, unambiguous documentation of origin, movement, processes and other relevant attributes via a meticulously maintained audit trail of records. Requirements for this objective are as follows:

Consumer of the output: The primary consumer of the output of the traceability program will be JAS auditors.

Information required: Origin, variety, cultural practices, storage practices, movement, processing and packaging from field to finished product.

Is the demand explicit or implicit: Since the JAS auditors will want to review the audit trail from field to finished product in meticulous detail, the demand for traceability information from the identified consumer is very explicit, and therefore the requirements of data and reporting will be very specific.

How will the traceability information be applied: To meet JAS requirements, it will be necessary to create an audit trail from field to finished goods that demonstrates unambiguously that the product was grown, stored and processed in compliance with organic protocols.

By thoroughly understanding and assessing traceability requirements in this manner, a traceability program can be specifically designed to fulfill the business objective by focusing on meeting the requirements.

Traceability Readiness Assessment

Since we've established the destination by defining our business objectives and the subsequent requirements, it is now time to take stock of where we are today, and understand the road that leads to the destination. To do so, an objective look at the current state of traceability capabilities is necessary.

Most firms do some degree of traceability today, i.e. "pretty good traceability." The question is identifying the gap from current performance to desired end-state to achieve the defined business goal. In our experience, many firms do a decent job of tracking a unit of food product once it has been received, works its way through their processing or distribution facility, and then is shipped. Lot tracking capabilities resident on many enterprise software packages are often leveraged as a fundamental component of sound operational business management.

So where do current capabilities most often come up short in achieving these new strategic imperatives? In our experience: maintaining the identity of a unit of inventory through a change in form of the food product itself, or its packaging/storage/shipping unit; maintaining the chain of custody of a unit of inventory through a change in ownership in the supply chain; During processing when the unit of food changes form; and during the distribution process. When the unit of analysis changes, e.g., cross docking of pallets and cases, the relationship between the beginning and end-states of the food item is often not adequately maintained. If a brand makes a claim about the sustainability of its coffee, this claim must be supported by documenting the source of the beans from the farm to the retail bag as it is transformed from green to roasted to packaged product. For many coffee and tea products, this relationship through processing is not so well preserved. Secondly, at the conclusion of a buy/sell transaction, information about the unit of coffee and tea production now resides in two or more unconnected information systems that contain unique information about processes and attributes at various stages of its life cycle.

[ILLUSTRATION OMITTED]

When assessing your traceability readiness in the context of your business objectives, it is necessary to consider your capabilities with respect to data collection, integration, consolidation and reporting to attain your goals. Data collection is the ability to capture data recording the events that occur to a unit of food production as it travels from farm to fork, or seed to cup. Data integration is getting different systems that contain that event data at each step of the supply chain to speak to one another in the same language. Data consolidation compiles the event data in a way that defines the relationships of all the data about a specific unit of food production in a form that it can be queried and reported against. This hierarchy of capabilities is illustrated in the pyramid diagram on the previous page.

Only after understanding the assumptions and limitations inherent in each segment of your current capabilities will you be able to make a determination of the necessary actions to take to solve the problem/opportunity that sits at the top of the pyramid.

A final consideration--many of the capabilities inherent in data collection, integration, consolidation, and reporting can be leveraged across solving the different types of problems and opportunities discussed earlier in this paper. This makes the business case for an effective traceability program very compelling by maximizing the application of your traceability toolkit to include a multiplicity of deliverables including improving your food safety programs, mitigating risk through recall containment, substantiating marketing claims, exercising control over your supply chain, and others. Clearly, a high-performance traceability program is going to be a strategic asset necessary for food companies to compete in the 21st century--so what are you waiting for?

TOOLBOX

Define Business Objectives:

* Inventory Management

* Regulatory Compliance

* Managing raw material to specification

* Documentation to substantiate brand claims

* Recall containment

* Contract compliance

* Brand assurance

Determine Requirements:

* Consumer of the output

* Information required

* Explicit or implicit need

* Application of the information

Assess Capabilities:

* Data collection

* Data integration

* Data consolidation

* Data reporting

The authors are senior managers of John Deere Food Origins. Further information can be found at www.foodorigim.com. A version of this article appeared in the Food Traceability Report.

Julie Barrett O'Brien, who authored the introduction, is president Woodlief International, a social capital management firm that applies successful business solutions to resolving global social issues. E-mail: julie@woodliefiorg.
COPYRIGHT 2004 Lockwood Trade Journal Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:coffee and tea traceability
Author:Boyle, Robert; Jorgenson, Bill; Pape, William; Pauwels, Jerred; O'Brien, Julie Barrett
Publication:Tea & Coffee Trade Journal
Geographic Code:1USA
Date:Nov 20, 2004
Words:1848
Previous Article:Green coffee transport and the risk of mold development.
Next Article:Coffee grinding issues and answers.
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