Going online

By Laurence Gibbons

- Last updated on GMT

Related tags Supply chain management Risk management Food

Electronic shopfloor data collection is an integral part of computer-based traceability
Electronic shopfloor data collection is an integral part of computer-based traceability
Laurence Gibbons hears the arguments in favour of replacing paper-based systems with online ones

Today, electronic payment systems have virtually replaced the use of cheques for banking and shopping. Email has effectively supplanted letter writing and even the police now take fingerprints using a hand-held device. However, the food sector's use of electronic systems to record data and improve traceability, has lagged behind and is far more patchy.

With globalisation of the food supply chain, the dangers of large product recalls have become far more common. However, computer-based traceability systems would enable companies to save a considerable amount of time and money when faced with such crises.

These systems provide increased data entry. Data is instantly recorded, while immediate feedback and alerts can be provided. In the event of an alert, products at risk and the causes of problems can be analysed quickly and easily. Everything can be tracked, ensuring total traceability from raw material to finished product.

With so much to gain, why are not more food firms using these systems? One of the main reasons is an unwillingness to share data along the supply chain particularly between manufacturers and retailers. Another barrier is that some don't feel able to justify their cost.

Many within the food industry are concerned that the transparency provided by electronic systems would allow too much information and data to be viewed by customers and potential competitors. Some suppliers fear this could jeopardise their intellectual property and give away too much information about product recipes, suppliers and stock they hold, which could put them at a competitive disadvantage.

Risks and benefits

The question is: do the potential benefits outweigh the risks? Software specialist Gael's latest risk management tool, Gael Risk, provides businesses with a built-in supply chain risk management system that carries out daily risk assessments on companies' operations. Traditionally, these assessments are carried out yearly by independent auditors, which means suppliers are exposed to greater risk.

Food safety consultant Dr Jo Head predicts that, in the future, software will interlink all companies' data. She is convinced that such systems will provide the best means of protecting against food recalls and the most effective way in dealing with them when they occur.

While unable to put a time-scale on how long it will be before we see all manufacturers and retailers openly sharing information, Head suggests those in the industry will need to learn to trust each before it will happen.

"Joining data and sharing intelligence is where the industry needs to be,"​ says Head. "This is the way people will be operating in the future. I have a vision, but I don't know when it will happen yet."

She believes that a fear among manufacturers that their confidential information might fall into the wrong hands is the main reason the industry still prefers paper-based systems.

"There is sensitivity about sharing data,"​ says Head. "It is out of people's comfort zone. You don't know how confidential others will be and what they might use your data for."

It is natural for companies to want to keep their data to themselves. In some cases, this is simply to prevent competitors from learning how to duplicate recipes or undercut production costs. In other cases, it might be to avoid fines for failing to carry out certain checks on their upstream supply chains.

"There is a concern of other people seeing your data,"​ says David Riley, director of Innovation Software, supplier of the Tracesoft product monitoring system. "Competition between retailers is a contributing factor. If complete data is shared, a competitor could access your recipes and find out you are producing similar products cheaper."

However, against this, Head believes the industry needs to stay one step ahead of the game when it comes to food safety incidents by applying new risk assessment systems like Trace Soft, Gael Risk or the Leatherhead Food Research (LFR) and Qadex joint venture Xpert-ease.

Xpert-ease combines smart IT tools available through the Qadex Vison system for food safety and supply chain management with LFR's extensive food safety expertise and market intelligence. By subscribing to this service, it is argued that companies could avoid many of the pitfalls they are likely to encounter.

"If there is a problem with some parsley from Egypt we​ [Xpert-ease] can tell you if a batch is affected,"​ said Stephen Whyte, business development director at Qadex.

Thus it can be seen that electronic systems present mixed blessing for the industry. They offer easy viewing and sharing data when faced with, say an allergen contamination incident, or other event which could lead to a product recall. But they increase the risk of the shared data being exploited by others for their own purposes.

"Full ingredients lists and who the suppliers are will all appear on these systems,"​ warns Mike Law, senior consultant at Food Chain Europe, which provides legal advice for a number of manufacturers and retailers.

"If they fall in to the hands of competitors, they would be looking for what makes a product unique to that manufacturer and ways they can exploit that."​ But Law points out that while there are data security risks, most systems could block certain information from entering the public domain at a company's request.

Wake up to the benefits

Confidentiality fears shouldn't deflect companies from the positives of electronic systems, however.

"A company that has the most advanced form of traceability, will be better prepared to deal with problems or recalls more promptly and confidently,"​ says Law. "Electronic systems store data forever paper can get lost."

Last year's dioxin contamination incident in animal feed highlighted the importance of manufacturers being able to safely track all the ingredients in their products. With computer-based systems they could do this at the touch of a button.

Head says that if the industry is to avoid data loss and costly recalls it needs to "wake up to the benefits"​ of electronic systems and move away from reactive paper-based systems, still used by 75% of the industry today.

Proponents of electronic systems claim that they also help to reduce human error, cut the time needed to record or find data and can safely store information on multiple computers. This not only makes data easier to locate, but also reduces the risk of information becoming lost or damaged.

Security of data

JJ Kotze, md of Applied Principles, which supplies the Principle Suite data management software, says: "The advantage of electronic systems is they can be backed up onto any machine. Those using paper systems can lose everything in the case of something like a fire."

Retailers now look for full traceability records to be provided by their suppliers. And experts in the field, such as Kotze, say retailers prefer their suppliers to use electronic systems, since this give them instant access to data. It also reassures them that these suppliers are operating more effectively and within the regulations.

Jim Flynn, global business manager for Gael, adds: "Retailers require that suppliers provide them with information about a product's contents. Using paper-based systems, this could take hours, weeks or even months. With electronic systems this can take a considerably shorter amount of time."

Despite overwhelming arguments in favour of using electronic systems, many believe that paper-based systems still have a place.

One of the main reasons is that the cost of electronic systems can't be justified by many small firms. "For bigger businesses they are required for legal reasons,"​ says Law. "For smaller companies, though, electronic systems just aren't warranted."

Kotze agrees that size really does matter when deciding if paper-based systems should be superseded. "It will be a while before you can convince a small local veg grower to implement a paperless system,"​ he says. "Electronic systems are better than paper but are not always practical. "

However, cost is also a reason for some large businesses not moving to electronic systems. But the companies probably don't take into account the time that will be saved in recording data or that the business is likely to operate more efficiently with such systems.

"Cost is the main consideration, and often it seems too much,"​ says Riley. "Companies don't see the bigger picture. They see hundreds of pounds spent not the improvements it will add to the business."

Ultimately, it is only a matter of time, though, before the food industry is forced to adopt electronic traceability systems, given the benefits they offer. Obviously, data security concerns between suppliers and their customers will have to be resolved. But once the obstacles are overcome, they will probably wonder why they didn't do it sooner.

"Our systems will all interact with each other,"​ says Whyte, as more and more systems adopt open platforms, which allow communication between each other. "There will be more electronic transfer of data,"​ he adds. "All retailers and manufacturers will send information online to each other."

It is a view endorsed by Law: "The industry has to move. As a sector the food industry can't just sit there and ignore the latest technology."

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