United States

Product traceability, the law and a competitive advantage

Start-to-finish insights for food manufacturers


Mandatory electronic traceability is a significant cost of doing business in the food industry. According to the law, food suppliers must maintain detailed records documenting the movement of products through the supply chain, ideally with fast, accurate and easy-to-manage information systems. But electronic traceability isn’t just about complying with the government and avoiding repercussions from the FDA. With the right technology, suppliers stand to gain a distinct advantage that can vastly improve an organization’s operations, sales force and customer service, which leads to a healthier bottom line.

Legal compliance requires new levels of visibility

Successful traceability hinges on product visibility. Visibility in this sense contributes to knowing a product’s:

  1. Location prior to arriving at the distribution center
  2. Location in the distribution center
  3. Intended destination once it leaves the center

Numbers one and three above obviously contribute to an organization’s effectiveness, but are also the principal concern for legal compliance. Electronic visibility for number two, however, chiefly influences operational efficiency. More and more produce processors (manufacturers, suppliers, retailer and food services) rely on an enterprise resource planning (ERP) solution to increase product visibility, streamline operations and optimize traceability.

Visibility: All about technology

Although electronic traceability links every point on the supply chain (as required by FDA trace-back guidelines), it has massive benefits for internal business operations and objectives. Electronic visibility answers questions such as:

  • Which customers have specific requirements? For example, do they only take produce that has been harvested in the last week?
  • Does the warehouse effectively manage first-in-first-out procedures?
  • Do staff know where every crate and pallet is located in the distribution center?
  • Is every product labeled correctly?
  • Are products shipped in the shortest amount of time to reduce spoilage?
  • Can the staff quickly respond to special requests from customers?

Case study: The cooling tube mystery

A food supplier was experiencing a problem in lost sales of vegetables that had come right out the field. To maintain freshness, the just-harvested produce was placed into a cooling tube for several hours to precondition the product before transport. However, during its time in the cooling tube, the produce became invisible to the sales team. And because sales happen immediately after harvest, the staff needed to know where the product was at all times.

The time in the cooling tube was a critical lost opportunity—hours of opportunity when the sales team couldn’t finalize the sale—and provided plenty of time for the prospective buyer to go somewhere else.

Once the problem was discovered, the ERP solution was reconfigured so that all products were visible at all times, dramatically improving the client’s sales process by eliminating tube time.

Greater visibility: Less time tracking down inventory and more time selling it

Electronic traceability is the law in the produce industry. Though some may view it as an expensive cost, in fact, the increased visibility of the products allows supply chain managers to move inventory more quickly and efficiently. The perks of this streamlined process can be felt across the organization. From faster processes to happier clients, a smart traceability ERP solution provides food manufacturers start-to-finish insight on their products.

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Cristin Singer 
National Food and Beverage Sector Leader