Posted by Johann Heydenrych, April 14, 2009
The ability to track, trace and recall products throughout the supply chain will differentiate CPG companies that expand their business from those that close their doors.
Currently, the pharmaceutical industry leads traceability efforts, with the food industry close behind. As world population grows, production increases, creating bigger quantities of goods that demand freezing, chilling and storage. Each one of those steps presents increased risks. Unless companies manage those risks appropriately, by tracking and tracing, the risks will become unmanageable.
For example, in the event of a recall, you’ll have to dispatch an army of vendors to every store and remove everything that’s there, because you will not be able to determine what’s good on the shelf and what’s not good. Then, you’ll have to replace the recalled goods, straining production, while customers vocally complain about a lack of inventory. The financial burden will be incredible.
Tracking and tracing becomes increasingly important as food companies begin to hold CEOs ultimately accountable for product safety. Recent mass-scale food safety breaches resulted in hundreds of people getting sick from contaminated goods that reached restaurant and domestic tables. CEOs have reacted to this charge by conveying the importance of individual responsibility to VPs of Supply Chain, Quality Management and Manufacturing. Thus, executive accountability, operational accountability and employee accountability actualize change management, business process engineering and training practices.
The segregation of duties, propelled by traceability functionality, will ensure that all personnel recognize which batches to consume, mix and ship. This new culture of absolute interior responsibility will surely change business practices for years to come.