Challenges faced in foodware supply chains

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The food sector is one of the major international economic sector (CIAA, 2007) and largest manufacturing sector in Europe (Fritz and Schiefer, 2009). The major differences between this sector and others is that it serves basic human needs and has direct effect on human health and its dependency on agricultural products from many different globally distributed production environments (Fritz and Schiefer, 2009) which has significant affect on the quality and healthiness of a product. Therefore, each player in the food supply chain is responsible for the safety and the quality of their product(s) (Bladeren 2006). The end products that are offered by the super markets for example, an assembled meal in the UK may contain ingredients from other countries even from different continents (Hutton and Campden & Chorleywood Food Research Association, 2001).

Figure : General basic foodware supply chain

The major players in the foodware supply chain are farm suppliers, haulier (transport, storage and logistics operators), the processors (food processors, manufacturer and packers), the retailers (markets, restaurants etc.) and the stakeholders ( FoodTrace : An Introduction to FoodTrace ).

Figure : Food production chain (Hutton and Campden & Chorleywood Food Research Association, 2001 p.21).

The food supply chain has become more and more complex (Hutton and Campden & Chorleywood Food Research Association, 2001), as a result of the increased choice for customers, the development of markets for suitable and pre-prepared foods the rapid movement of good by modern transportation, faster communication facilitating global trade, and increasingly competitive markets (Hutton and Campden & Chorleywood Food Research Association, 2001). During the flow in the supply chain, it is crucial that the quality of the product kept well (Bladeren, 2006).

Figure : Quality test of a milk product.

In Europe over the years, the food manufacturing mentality has changed rapidly from the guaranteed availability of food, via uniform quality, food safety and changing production methods and processes, food is now increasingly associated with enjoyment, health and anticipated well-being (Bladeren, 2006). For example, Dutch supermarket chain Albert Heijn that is market leader in that sector and made big name due to offering good quality foods, wide assortment and 100 percent service level. This company has in addition to those qualities pushed it suppliers to deliver (fast)traceable products whereby this company can give their customers trust about being able to take action very quickly by a unhealthy ingredients in a particular food or drink (Albert Heijn, 2006).

Tracing Foodware throughout supply chain

In a world faced with ever-growing food safety issues, animal disease, food contamination and poisoning, sustainable production, fraud and issues regarding production methods, the protection of food supplies is driving the current push to track and trace food products throughout the supply chain (Engelseth, 2009 ; Jamieson, 2008).

The EU "General Food Law Regulation" 178/2002 (EU, 2002 cited in Senneset et al., 2007 ; Dennis, 2005 ; Kelepouris et al., 2007 ; Hutton and Campden & Chorleywood Food Research Association, 2001) in force from January 2005 (Fundamentals:Traceability definition - TraceFood, 2010), and US Bioterrorism act (US FDA, 2002 cited in Senneset et al., 2007) forced that every party involved with the food, drinks and animal feed must have system and procedures in place in order to trace the ingredients least one step back and one forward in the supply chain ( Food traceability: Tracking your way through the food chain2007 ; Ream, 2005b ; Porter,1985 cited in Fritz and Schiefer, 2009 ; Dennis, 2005). Tracing one step back is the ability to trace a food product from the retail shelf back to the farm. In opposition, trace forward is the ability to trace a food product from the farm forward to the retail shelf (Levinson, 2009).

The EU commission (EU, 2002 cited in Senneset et al., 2007 ) defines tracing as follows:

''The ability to trace and follow a food, feed, food-producing animal or substance intended to be, or expected to be incorporated into a food or feed, through all stages of production, processing and distribution.''

The EU Food Legislation requires that the companies in the food chain must be able to supply their records within 4 hours ( - General Food Law: het is een race tegen de klok )and the US Bioterrorism Act, in 24 hours (USFDA, 2005 cited in Gessner et al., 2007). However, by the inspection of the US Department of Health and Human Services (2009) whereby they tried to trace through the food supply chain of selected businesses, 59% percent (70 of 118) of their traceability exercise did not provide all the required contact information about their sources, recipients, and transporters (Levinson, 2009). An important point about these regulations is that they do not lay a specific methodology to be followed by tracing but foodware companies are free to choose a system that fit their own and their partners` needs and ensure efficient traceability of their products (Folinas et al., 2006).

On the other hand, the International Standard Organisation has found also that it is crucial to have the ISO 22005 standard to strengthen traceability throughout the supply chain (Quilter, 2007).

According to the UK-based government Food Standards Agency report (2002), securing food product traceability involves:

Products (the physical properties of the goods and their transformation in a supply network); the data (information concerning these goods);

The data (information concerning these goods);

. Calibration (regarding here using standards to facilitate automated information exchange);

. ICT (information and communications technology) and programming (regarding the design and use on an information system to facilitate food product traceability).

The EU Commission (2007) stated the main reasons/need for tracing are as follows:

Traceability is a way of responding to potential risks that can arise in food and feed, to ensure that all food products in the EU are safe for European citizens to eat.

It is vital that when national authorities or food businesses Identify a risk they can trace it back to its source in order to swiftly isolate the problem and prevent contaminated products from reaching consumers.

In addition, traceability allows targeted withdrawals and the provision of accurate information to the public, thereby minimising disruption to trade.

Past food crises, such as dioxin contamination and BSE, have illustrated the particular importance of being able to swiftly identify and isolate unsafe foodstuffs in order to prevent them from reaching the consumer.

Source: European Commission (EC), 2007

In addition to from EC mentioned points, an effective use of tracing will also help the manufacturers to determine which remaining products are safe and which ones are contaminated, thereby minimizing the cost and scope of a recall (Jamieson, 2008)

The research has demonstrated that there are two basic important areas that are related to tracing. These are safety and reducing recall costs. These two points will be discussed in the following two (sub) chapters.


A survey (2000) by the UK Food Standard Agency showed that 75 percent of consumers are concerned about food safety (Kelepouris et al., 2007). In UK in 2000, according to UK Food Standards Agency (Hilton, 2001), there were 1.3 million cases of indigenous foodborne disease, whereby it resulted 480 deaths and an estimated cost of £1.5 billion. In US, there are each year about 76 million of food borne illnesses, more than 300.000 people are hospitalized whereby 5.000 of them dies due consuming contaminated foods and beverages ( Food and diseases, disease information, NCID, CDC ) (0RW1S34RfeSDcfkexd09rT2WHO ).

There are penalties imposed when a food processor cannot trace to help the recalls (Traci, 2007). However, manufacturers are less concerned about the penalties that come from the FDA, then a brand damage that can take place (Traci, 2007).

A research done by Aon Corporation (global provider of risk management services)(2006), has shown that after introducing the EU tracing law that the number of recalls did increase (Back to the Farm). This is according to Mouthaan (2006) not due to that the food products became less safe but because of that, the supply chain became more transparent (Back to the Farm).

There even companies who are using their traceability as promotion material to increase their (potential) customers trust in their product(s) and brand ( - Traceability is taak van alle ketenpartners ; Gellynck et al. 2006 cited in Alfaro and Rábade, 2009).

Cost reduction through tracing

In addition to safety aspect, companies are applying tracing system through their supply chain to increase their recalls speed that will save them big amount of money and protect their image. The relation between recalls speeds and recalls cost is shown on figure 4. Due to cost aspect and for getting ISO-22005 quality qualification, there were even companies who integrated this system before the EU and US tracing law was forced in foodware industry (Quilter, 2007).

Figure : Recall time and cost relation (Fritz and Schiefer, 2009).

Deloitte Consulting Group mentioned in its report about Track & Trace (Chandra, 2009) the next recall example for emphasize the importance of tracing and recall speed and cost:

In 2005, Premier Foods, the United Kingdom's (UK) largest food manufacturer, recalled more than 470 products containing chili powder contaminated by the cancer causing chemical Sudan 12. The total cost of the recall exceeded £100M, making it the largest food recall in UK history. Most of the cost was associated with the time and effort required to locate all the affected products.

Another outbreak that did affect US that had a big negative result:

In 2008: Maple Leaf Foods suffered an outbreak of listeriosis in one of its meat plants in Ontario. The outbreak resulted in 21 confirmed cases of illness, four deaths, $27M in legal settlements and a severe blow to the company's public image. The company's stock tumbled nearly 40%, wiping out $580M in market value (August 23 - October 23, 2008) (Gessner et al., 2007).

Moreover, in 2002 the Food and Drug Administration (FDA) in US, mandated 5,000 recalls (Traci, 2008). Moreover, the Japanese car manufacturer that is known with its reliable and quality products is recalling about 223,000 vehicles due to break and cylinder problem (BBC News - Q&A: Toyota recalls). Due to their ability to trace in which cars the defect parts are used they are able to recall limited number of them instead of all. Nevertheless, the brand image of reliable car has become in danger due to a problem that is directly related to passengers' safety. Even though they will be able the recall cost and $16.4 million fine imposed by U.S. regulators (Latest Toyota Recall and Fine Update : Product Reviews Net ) the damage that it has made is uncountable.

The companies as shown on figure 4 should take action as fast as possible to reduce the cost and damage it will make on companies image. Therefore, the system that is used for making tracing possible should make tracing through the supply chain clear, informative with required data for recall user friendly to find out the data that is required in short time.

Serial Shipping Container Code (SSCC)

There is a wide range of traceability schemes currently used in food supply chains, from paper based to sophisticated IT-enabled (Food Standards Agency, 2002). However, in this research the focus on the use of SSCC (barcode) labels which is a GS1 number that is generally accepted within the food and beverage industry (Technology Management, 2006) & (UP trace - traceability concepts). The SSCC is an identifier or "license plate" that provides access to information stored in computer files, which are transferred through electronic business transactions (GS1 US, 2006). This is used throughout the supply chain as an entity identifier for item tracing and internal control ( Serial Shipping Container Code (SSCC-18) 2010). It enables the tracing of products in details as they move one to another location (EAN International, 1998). The SSCC will identify any logistic unit uniquely thus ensuring that it is always ( Serial Shipping Container Code (SSCC-18) 2010) identified correctly anywhere in the world (GS1 Saudi Arabia, 2007). The uniqueness of the number is ensured through the use of the GS1 Company Prefix, which is supplied by GS1 Member Organizations. The SSCC can be used by all parties in the supply chain as a reference number to the relevant information held in computer files (Logistic Units).

Making effective use of SSCC requires collaboration with the each company throughout the supply chain. In addition, integration of this system needs well organized warehouse whereby reading the labels and storing the data has a crucial role. Therefore, it is also a must to have a barcode scanner and a system such as ERP optional with warehouse management system for storing the data that will have a significant part in tracing.

Figure : Example SSCC label (EAN International, 1998).

Each shipping container at the time of its creation is uniquely identified by the sender with a SSCC (EAN International, 1998). The SSCC information in addition standard order details regarding to shipped goods are often send to the next part in the supply chain through Electronic Data Interchange (IDE) ( - Traceability Index ).

However, even though SSCC connects physique goods flow with information flow, it has often to used in combination with a GS1 label whereby in addition to in SSCC coded information the details such as best before date, number of items, batch number and the article code are coded in a barcode ( UP trace - traceability concepts ).

Figure : Lay out homogeneous EAN label (incl. SSCC) (Albert Heijn, 2006).

Figure : SSCC in supply chain (Logistic Units).

When the good are arrived by the customer, the goods are booked and confirmed through scanning the SSCC label (Technology Management, 2006). The information coded on the SSCC label and all the following changes of that product is collected on the software for tracing.

Figure : Example SSCC history data (Technology Management, 2006).

The software allocates them to attached details such as storage and expiration date, batch and lot number, quantity and when it is used in a new product, it also makes record of connection by use of it by a new created product. There are different types of software`s available on the market which are special designed for working with SSCC label or ERP software`s such as SAP, Microsoft Navision and Eniac BS that is a part of their Warehouse Management System (WMS). The data that are stored on these software`s makes in the event of a recall tracing of products possible to trace exactly where the products were sent to and on which container they were transported (Technology Management, 2006)

Benefits from use of SSCC

This SSCC label makes tracing trough all the supply chain available from raw materials supplier to manufacturer to distributor/wholesaler to end user/retailer (GS1 US, 2006). It is a system that is globally accepted whereby its language is standardized, understood, and used by multiple industries (GS1 US, 2006). The other benefits of SSCC use can be defined as follows:

Links bar coded information on a logistics unit and the information that is communicated between trading partners via electronic business transactions (GS1 US, 2006).

Same points of reference for shipment tracking and tracing for all participants in the supply chain (GS1 Brussels, 2006).

Enables Asset Tracking: Serial Identification, Tracking and Tracing of containers ( - Traceability Index ).

Enables Efficient Receiving, Storage and Dispatch processes through automation ( Readymade Garments Industry - For Inventory Management,Track & Trace,Production Scheduling).

Improved control procedures in warehousing and distribution

Minimised labelling costs through the use of an international standard

Automation and efficient handling of transport units and their contents

Improved matching of deliveries against invoice (GS1 UK, 2008).

About how use of SSCC reduces handling time of received goods: According to ( - Is tracking and tracing passé?), due to making use EDI (Electronic Data Interchange) for sending the packing list that includes all needed information before the goods are delivered by the customer, it reduces that time by about 75% ( - Is tracking and tracing passé? ).

The most important advantage of all regarding to tracing, it makes recalls in case of quality problems at any point in the supply chain possible in short time and in efficient way (EAN International, 1998).

CASE STUDY: Tracing pallets by Coca-Cola

One of the largest and most reputable companies in the world, Coca-Cola labels in Casbega (Spain) production site in various sizes: large and small glass bottles, PET bottles, "bag in box" at several bottling and packaging lines.

The challenge

To comply with European tracing (178/2002) pressure, they were forced to follow their pallets automated through their supply chain.

The basic requirement was to apply a label with GS1 EAN-128 barcode on all pallets.

By integrating automatic Print &Apply systems to obtain their palettes with a regulated standard code that contains all information regarding the production, sale date, carrier, ...

The solution

The solution that offered guaranteed good result was purchasing and installation of a system (APL 6200, a Print &Apply System) for real-time application of adhesive SSCC labels on two pallet sides, and this on any production and packaging line.

By integration of industrial PCs in its network for creating, saving data and printing of SSCC barcode labels with fully automatic positioning of labels. This solution did lead to efficiency.

The result

With integration of a machine with software that stores data from SSCC labels, Coca-Cola reached a solution for tracing in its supply chain and reduced labelling of pallets of finished goods.

Source: (UP trace - traceability concepts).

The Coca-Cola production and assembling location in Spain has due to implementing of SSCC label system in combination with a simple but a system that places the SSCC labels on two sides of a pallet has reached to fulfil the EU tracing law requirement and saves lots of time with placing of the SSCC. The other party in their supply chain will before the shipment send an IDE invoice so the other party will exactly know what is shipped and its amount and collect the information in their IT system. This will reduce the customers' time through making use of barcode scanners for checking the received goods.

Conclusion: Assessing if SSCC fulfils the requirements of 'Tracing Law'

The tracing law in EU and US, as mentioned in details by chapter 'tracing' requires that the flow in the foodware supply chain must be traceable through supply chain and each party should collect their data for received and shipped goods for period of at least two years (Fritz and Schiefer, 2009 ; Food traceability: Tracking your way through the food chain, 2007 ; Ream, 2005a). There are different alternatives available that makes this available such as SSCC and RFID (radio frequency identification) that has their unique advantages in addition to tracing. However, the author has done a research that focuses on SSCC.

The research has resulted that SSCC makes tracing through the supply chain available in combination with a software that collects the data for incoming and shipped goods, changes in codes in their internal process, in what batches those goods are used that are crucial by a recall situation (Technology Management, 2006).

The author has experienced that implementation of SSCC has become these years very popular by Dutch companies in foodware sector. However, most of them implements when they are asked from their suppliers such as supermarket chains. As this research has resulted, implementing of SSCC has many more advantages so therefore companies that are aware of those benefits such as supermarkets chains do not put pressure due to only being able to trace but also reduce their costs in labour and administration for received goods. Moreover, traceability is also used as a marketing tool for gaining customers trust transparency (Folinas et al., 2006).

About a further research, comparing different tracing alternatives to each other