Cancel OK

Traceability Software Solutions Update

What’s new, what’s better, and what you should know

The implementation of PTI progressed more slowly than many had expected, resulting in some companies failing, some leaving the produce sector, and others merging. FoodLink acquired PTI labeling solution TrueTrac in 2012, before being purchased itself by Roper Industries in July 2014 and being integrated into Roper’s iTradeNetwork.

As a result of consolidation, vendor offerings have stabilized and most of the alternatives make sense for the produce industry. “Solutions have coalesced,” Elliot explains, into what he characterizes as a number of different ‘flavors.’ “Some ERP solutions now bundle the PTI capability in; some warehouse management system providers have added PTI. There are still pure-play traceability systems (like HarvestMark), which are designed for standalone operation and cloud-based management, storage, and analytics. And there are some online solutions aimed at the very small farmer who just needs a couple of labels.”

Software solutions have also moved to the cloud, which has lowered the barriers to entry. Giumarra Companies recently switched to a cloud-based solution. “It really simplified things and reduced the cost,” says Jim Heil, quality assurance manager. Before the transition and new software, it could take weeks to add a new customer to the system. “Now you can get going in 15 minutes.”

Possibly the most significant change in the traceability solutions market has been the widening of options. “From the outset, PTI was designed to be a supply chain traceability solution for the entire industry,” says Ray Connelly, iTradeNetwork’s vice president for traceability and merchandising solutions. “It started as a labeling solution, but now it has become a holistic approach to the entire supply chain.”

Scalable options that can grow with the user are available as an entry point. “We have one customer with 10,000 cases per year, all the way up through Dole and everything in between,” Connelly says.

Although there are more solutions for smaller companies, gaps exist. “There are smaller growers in the Midwest with 30 acres of cucumbers that they harvest for 30 days,” Vaché says. “The solution providers have really made traceability scalable over the last few years, which has helped, but it’s still a big investment in some cases.”

Benefits Vs. Cost
Most business owners view traceability as a cost, but Produce Pro’s Heim counters, “they really need more of an inventory solution than just a traceability solution. Once you overcome this stigma and show how other people are using the software, they realize there will be a return on their investment.” Further, capturing data electronically can improve processes and make a “facility run better.”

Falco agrees; many in the industry are missing that “the right system can improve their bottom line,” she says. “You have a choice between cost-avoidance, where you choose a system so you don’t have to pay the fines for not doing what the retailer wants, or profit enhancement, where you’re improving your own business.”

Twitter

As more key retailers, from Walmart to Whole Foods Market, encourage or require implementation of the industry’s voluntary Produce Traceability Initiative (PTI), growers, shippers, and other produce companies are increasingly interested in software solutions to help them become PTI-compliant.

While there is no hard data about industrywide implementation, estimates based on anecdotal evidence suggest 40 to 60 percent of all cases featured PTI labels as of mid-2014. Implementation varies by company, with some still taking a wait-and-see attitude, and others having deployed traceability programs several years ago, before PTI was even finalized.

Driscoll Strawberry Associates, Inc. of Watsonville, CA had one of the first systems that could handle item-level traceability more than four years ago, according to Peter Townsend, IT director at Salinas-based The Nunes Company, Inc., who was with Driscoll at the time. “The purpose was really for consumer engagement,” he says. “But there was a side benefit of unit-level traceability.”

Nunes has been using two main transactional systems for traceability, FoodLink for field packing and PTI labeling, and Microsoft Dynamics-AX for inventory management; the company has also been piloting an item-level system with HarvestMark. “Our decision was driven by retailer interest in PTI,” Townsend explains. “But we wanted to be at the forefront; information transparency in the food chain is always a good thing, and it always leads to process improvements.”

Produce industry acceptance of PTI has gotten a recent boost from leading retailers, including Publix and Whole Foods Market, encouraging or requiring vendors to use PTI labels. A key driver was Walmart’s May 2013 announcement that it would require labeling as of January 2014. After Walmart’s bold announcement, Courtney Heim, a marketing and sales representative for Chicago’s Produce Pro, Inc., a software solutions provider, says, “People called from all over the country.” She also notes that smaller retailers and restaurants also are asking for cases to be PTI-compliant.

Still, not all companies are on board. “There’s a lot of resistance in the supply chain,” says Alison Falco, president of Dynamic Systems, Inc. in Redmond, WA. “Most of the burden sits on the shoulders of the retailer. As you go down the supply chain, there’s less acceptance of the need to comply, especially among small farmers and packers,” many with a ‘until I’m forced to, I’m not doing this’ attitude.

Industry Evolution
When PTI was being developed in 2009 and 2010, many vendors were getting into the market with traceability solutions. “Some were controlled by venture capital money, whileothers came from different business sectors and lacked specific knowledge of the produce industry,” says Dan Vaché, United Fresh Produce Association’s vice president of supply chain management. “Many systems were priced in the tens of thousands of dollars and tailored to the biggest companies.”

Elliot Grant, founder and chief technology officer of Redwood City, CA’s YottaMark, Inc. puts it this way: “When PTI was first announced, there were over 25 companies offering solutions, making it hard for growers to decide what was best for them,” he says. “In addition, the requirements were still in flux, so solution providers were offering noncompliant solutions.”

The implementation of PTI progressed more slowly than many had expected, resulting in some companies failing, some leaving the produce sector, and others merging. FoodLink acquired PTI labeling solution TrueTrac in 2012, before being purchased itself by Roper Industries in July 2014 and being integrated into Roper’s iTradeNetwork.

As a result of consolidation, vendor offerings have stabilized and most of the alternatives make sense for the produce industry. “Solutions have coalesced,” Elliot explains, into what he characterizes as a number of different ‘flavors.’ “Some ERP solutions now bundle the PTI capability in; some warehouse management system providers have added PTI. There are still pure-play traceability systems (like HarvestMark), which are designed for standalone operation and cloud-based management, storage, and analytics. And there are some online solutions aimed at the very small farmer who just needs a couple of labels.”

Software solutions have also moved to the cloud, which has lowered the barriers to entry. Giumarra Companies recently switched to a cloud-based solution. “It really simplified things and reduced the cost,” says Jim Heil, quality assurance manager. Before the transition and new software, it could take weeks to add a new customer to the system. “Now you can get going in 15 minutes.”

Possibly the most significant change in the traceability solutions market has been the widening of options. “From the outset, PTI was designed to be a supply chain traceability solution for the entire industry,” says Ray Connelly, iTradeNetwork’s vice president for traceability and merchandising solutions. “It started as a labeling solution, but now it has become a holistic approach to the entire supply chain.”

Scalable options that can grow with the user are available as an entry point. “We have one customer with 10,000 cases per year, all the way up through Dole and everything in between,” Connelly says.

Although there are more solutions for smaller companies, gaps exist. “There are smaller growers in the Midwest with 30 acres of cucumbers that they harvest for 30 days,” Vaché says. “The solution providers have really made traceability scalable over the last few years, which has helped, but it’s still a big investment in some cases.”

Benefits Vs. Cost
Most business owners view traceability as a cost, but Produce Pro’s Heim counters, “they really need more of an inventory solution than just a traceability solution. Once you overcome this stigma and show how other people are using the software, they realize there will be a return on their investment.” Further, capturing data electronically can improve processes and make a “facility run better.”

Falco agrees; many in the industry are missing that “the right system can improve their bottom line,” she says. “You have a choice between cost-avoidance, where you choose a system so you don’t have to pay the fines for not doing what the retailer wants, or profit enhancement, where you’re improving your own business.”

Vaché notes that the information captured in a traceability program can help lower costs and raise quality. Examples range from allowing a cooling facility to maximize freshness by reordering deliveries based on when the loads were harvested, to paper savings of as much as $20,000 per year on the receiver side. “The sales folks know exactly what’s being harvested and can sell it to the right customer and make the right adjustments on a daily basis.”

Other benefits can touch on quality assurance and payroll, according to Ed Treacy, vice president for supply chain efficiencies at the Produce Marketing Association. He knows of companies that assign lot numbers by picking crew, with the resulting competition leading to more efficiencies and lower rejection rates. One company even put the packer’s picture on the PTI label as a means of improving efficiency, and saw marketing benefits as well. “It gives (wholesalers) confidence and trust in what they are buying,” Treacy says. “I don’t know if it is influencing buying, but it’s being noticed.”

Produce companies are starting to take the benefits as well as the costs into account. “We’re having deeper, more sophisticated discussions with customers about the supply chain,” says iTradeNetwork’s Connelly.

“We’ve seen a big increase in our warehouse management software sales in the past few years, and I attribute this in part to people realizing they need to get their inventory challenges resolved before they move to traceability,” observes Todd Baggett, director of business development at Santa Clara, CA-based Redline Solutions. “The strong ROI is probably the main reason.”

“In the early days it was about compliance, but all the companies have evolved to acknowledge that you can get business value beyond compliance,” asserts Townsend. “If you’re spending the money anyway, why not do it to improve the operation? A lot of companies have a process orientation, so anytime they need to make a change due to an external initiative, such as PTI, they look for opportunities to improve their processes.” At Nunes, the traceability program’s implementation triggered cooler improvements. “We were thinking of doing it anyway, but we did the upgrade for PTI,” Townsend says.

Giumarra, for example, added a reporting feature to its traceability solution to generate reports by region and predict future harvests. “We collect a lot of data that we didn’t before,” Heil explains. The company also realized that the traceability sticker did not need to lead to additional work beyond the other required case markings. “We developed a solution that encompasses all the information we needed for cardboard and RPC cases, so it wasn’t an additional step, it was one step.”

Selection and Deployment
“Don’t overcomplicate the process,” Treacy counsels. “It’s not that difficult to adhere to the standards. Some companies think they have to reinvent the wheel.” Vaché concurs: “You can make adjustments to what you already do and not recreate the whole process.”

Grant recommends starting by clearly delineating objectives. “Do you just need to comply with Walmart’s requirement, or do you want to leverage the investment to also improve quality and inventory rotation?” Thinking through the various benefits and goals “will help you find a solution without getting sucked into buying features you don’t need.”

Falco stresses companies should select a new system that will not negatively impact current efficiencies. “Any system they choose must move as fast as they do and provide information on the fly.”

It pays to carefully consider whether you want a ‘bolt-on’ solution, something that is scalable, a more robust solution, or one specifically customized to your business.

Heim points out that bolt-ons may be relatively inexpensive initially, but can end up being more expensive in the long run due to the need to pay for upgrades to maintain compatibility with other systems. Similarly, selecting an initial package with customized elements can lead to costly upgrades over time.

What the Future Holds
“In produce, we don’t have a supply chain, it’s more like a supply web,” Treacy explains. “There are many steps along the way. It’s important for the industry to get a higher rate of adoption to get the product out of the supply chain as fast as we can in the event of a recall.”

Heil states the obvious yet still elusive fact to some produce businesses: if they want to continue selling to their top-tier customers, they need to get ready. Everyone, he says, must understand PTI “is not going to go away.”

“It’s just smart project management,” Townsend stresses. “Before you do anything to change a process, you need to understand your business very well first,

including the work flows and the corresponding data flows.” In addition, he emphasizes, “You need to have a project team that has ownership over both selection and deployment, so everyone has a stake.” Lastly, he notes, “unwavering management support is critical.”

Twitter