INTRODUCTION-THE SUPPLY CHAIN

This view is dedicated to those who are interested in how traceability can improve supply chain management both related to the flow of physical goods as well as the related information.

The supply chain and traceability

Food supply chains are often extensive in number of suppliers and efficient supply chain operations include many different operations. CSCMP (Council of Supply Chain Management Professionals) defines a number of standard processes as shown in Figure 1.

Figure 1: Standard business processes and information flow in a supply chain (adapted from Senneset et al. 2007)

Both supply chain management and chain traceability have a focus on the interface between the processes Source and Deliver between two companies in the supply chain. This interface consists of a set of sub-processes with corresponding messages between the companies (CSCMP, 2004).

Examples of sub processes are:

• Supplier management
• Purchasing
• Order management
• Warehousing/Fulfilment
• Transport
• In-bound material management

Examples of messages are:

• Request for quote (RFQ)
• Purchase order (PO)
• Order confirmation
• Advanced shipping notice (ASN)
• Proof of delivery/In-Transit Visibility
• Invoice
• Payment

The supply chain view is directed at people who deal with such processes and message handling.

OPINIONS/FACTS

What information to receive from food suppliers for traceability purposes?

To enable traceability of food products through the supply chain, traceability information must be transmitted and recorded by all involved companies as shown in Figure 2. The principles of data capture of chain traceability and internal traceability information are shown in Figure 2. The figure shows the same CSCMP standard processes as defined above.

As a basis for chain traceability, the identities for traceable units must be recorded at reception and shipping (see top vertical arrows in Figure 2). Internally in each link in the chain, the same type of recording should be made at merging and splitting of materials/items.

Figure 2: Data capture points of traceability information. From Senneset et al. 2007

Information that is fundamental and necessary to identify and physically trace the products is defined in, e.g., the TraceFish standards (CWA14660 2003) as “Shall” information and should be made available by the supplier.

• Food business/actor or traceability actor ID (Identification of supplier)
• Logistic Unit ID (Identification of sold product, e.g., pallets, containers) on traceable unit
• Trade Unit ID (Identification of sold product, e.g., boxes, bins, cases) on traceable unit
• Date and time (dispatch of logistic or trade unit)
• Related created trade unit ID’s (documenting transformations between received and sold product that are related to the traceable unit in focus). This may be information that is should be considered as part of the privacy vs transparency discussion
• Type of unit (Description of created unit)
• Net weight (Net weight of traceable unit)

What can I use traceability for?

This section describes the most relevant processes to create exchange, and use traceability information in a supply chain. The different actors and processes are presented in UML use cases. A Norwegian fish chain is used as an example.

The following use cases for transfer of traceability information are specified and described:

• Request traceability information related to the Source process
• Push traceability information (report) as part of Delivery, e.g., part of ASN/Despatch advice or Packing list
• Request traceability information independently of business messages (e.g. recalls)
• Submit traceability information to a commodity market

Advantages in the supply chain with respect to traceability

Good traceability systems should be able to aid food supply chains in a similar way to 'Just In Time' which in the car industry (most notably Toyota) has led to the benefits listed under;

• Traceability can be used to improve stock control.
• Traceability can be used to monitor the effect the quality the suppliers goods have on your finished goods.
• Traceability can be used to optimize both internal and external logistics with respect to timeliness, transport distance, storage time, etc.

 

Case 1. Preliminary verification of traceability information as part of request quote.

A Russian importer of fish (Buyer) considers multiple batches of fish from a number of exporters (suppliers) as potential purchase objects. The importer sends request quotes for price, freight method, quality, estimated time of arrival, and additional information about the traceability history of each batch. The Norwegian exporters respond by sending response quotes including traceability information.

Figure 3: Use case 1 describing preliminary verification of traceability information

Case 2. Push information (report) as part of Delivery, e.g. part of ASN or Packing list.

When an exporter (Supplier) has sold a batch of fish, the exported may send an advanced shipping notice (ASN) and/or packing list to the buyer or consignee. This shipping notice may also include traceability information for all relevant traceable units.

In cases where the fish is shipped directly from the fish processor (Consignor) to a buyer or consignee, the consignor may also send the same type of information. In some cases supplier and consignor can be the same food business operator. The same applies to buyer and consignee.

Figure 4: Use case 2 describes reporting traceability information as part of delivery

Case 3. Request traceability information.

A prerequisite to be able to track and trace trough the chain is the ability to send and request corresponding reports of traceability information between all the actors in a supply chain (Figure 5). A possible case is described below.

Figure 5: Case 3: Request traceability information

To document the legality of a catch of fish, the governmental body requests traceability information and information about quota etc. from the fishermen and the fish processors. After receiving sufficient information, a proof of legality, e.g., an electronic certificate may be issued by an authority and sent to the chain actors responsible for landing (subsequent chain actor in Figure 5).

This certificate is then sent together with the traceability information to the parties that require information about legality (Supplier and Consumer in Figure 5).

The retailer (Supplier) has in advance requested information from the upstream supply chain (Buyer and subsequent actors) about traceability information (case 2). The certificate ca then be accessed through the Enterprise Resource Planning (ERP) system or traceability system.

If a consumer is asking questions about the origin and legality of a certain type of fish the certificate may then be displayed if authorised.

In one of the most serious food scares in Norway, the E.-coli case in 2006, extensive information about process and products in addition to traceability information were required by the governmental bodies as reported by Nortura representatives. Some of this information was also exchanged electronically. This case should be regarded as an important example of the Governmental body role and the use of information in a food scare case where a withdrawal was necessary.

Case 4. Submit to electronic commodity market/commodity exchange.

A fourth use case is defined when traceability information is submitted and flows through electronic commodity markets. An example of this is the situation where fishing boats (Suppliers) transfer their catch information into Commodity market represented by a web-based auction system. Traceability information may be sent and presented at the same commodity marked and accessed by buyers and Governmental bodies.

Figure 6: Case 4: Submit to electronic commodity market/commodity exchange