We’ve written a great deal about traceability and, after a slowdown caused by substantial industry objection, our sense is that the Produce Traceability Initiative is about to pick up speed. The big change is that the newly formed PTI Leadership Council approved a new proposal:
In its first official action, the council approved a proposal from the new Implementation and Technical Working Groups to update the labeling requirements to include a four-digit voice pick code. This change will help overcome a barrier to implementation of Milestone 7 (“Read and store information on outbound cases”).
The council adopted the open-source Cyclic Redundancy Check (CRC) 16 algorithm to calculate the voice pick code, which will eliminate the need to scan outbound cases in those operations that utilize a voice-directed picking system. The Implementation Working Group will conduct pilot tests and develop best practices to aid industry in implementing this “PTI voice pick code” solution.
This is big news. What has really held up PTI is not that a lot of shippers and wholesalers don’t like it and think it is too expensive. What has held it up is that the big retailers, including many who pledged to support PTI, came to understand how complex and expensive it would be to scan every case leaving their distribution centers. Many made it very clear that, pledge of support or no, they weren’t going to do it.
YottaMark announced over a year ago that it had developed technology and business practices to comply with those who use voice pick technology in their warehouses, and most large retailers do use the technology to avoid scanning each case as it is picked to fulfill an order and yet still be PTI-compliant. Although it has applied for patents related to its technology and business practices, YottaMark has agreed to allow the industry royalty-free use of the system.
Vocollect, a company active in voice-related technologies with some input from Giant Eagle, has put out a white paper on the matter:
The PTI voice pick code is an implementation of VoiceCode™, developed by YottaMark, a product traceability and authentication company. YottaMark developed VoiceCode specifically to support produce traceability in warehouses using voice technology to support order selection. While YottaMark has applied for patent protection for VoiceCode, they have committed to allowing use of the concepts by all members of the produce supply chain on an entirely royalty-free basis. VoiceCode is a registered trademark of Yottamark, and the PTI is therefore describing its implementation of VoiceCode as the “PTI voice pick code.”
… In brief, however, VoiceCode combines the GTIN, lot number and (if present) date code to create a four-digit “hash code.”
A hash code condenses a large amount of information into a much smaller “digest.” For a simple example, one could generate a single-digit hash code from a zip code by adding the five digits and taking the least significant digit of the sum as the hash code (12345→15→5). Obviously many zip codes will have the same hash code, but if we select a random pair of zip codes the odds that they will have the same hash code are only one in ten (such an event is called a “collision”). Nine times out of ten, therefore, if we wanted to determine whether a letter was destined for zip code A or zip code B, we could make the decision based solely on a single-digit hash code.
You can read both Yotta Mark’s announcement and the Vocollect white paper for all the details. There are some complications regarding “collision” when two cases on the same pallet share the same voice code, but, all in all, it solves a big problem for the big retail warehouses, and that will probably break the logjam and allow PTI to be implemented more expeditiously.
Yet while this voice pick technology is common in very large retail distribution centers, it is uncommon amongst wholesalers and terminal markets.
With The New York Produce Show and Conference fast upon us, we wanted to deal with traceability from the angle of how this can all play out among smaller shippers, local growers, independent wholesalers, terminal markets and brokers. After all, the desirability of new technology and practices notwithstanding, it really has never seemed that big a trick to track a direct shipment of a full trailer from a packer to a retail DC. The Northeast, though, is filled with small growers, distributers large and small, lots of brokers, small regional and ethnic retailers, lots of foodservice purveyors splitting cases and whatnot.
To gain insight into how traceability can play out in this environment, we called upon Gary Fleming, who now heads his own consultancy but had previously been Vice President of Industry Technology & Standards at the Produce Marketing Association, where he headed up PMA’s traceability efforts. We often find people in this mode to be very valuable sources of information. They have an insider’s sense of history and how things really came about but an outsider’s freedom to speak. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Q: What inspired you to start your own business? Does it relate to your fervent pursuit of the Produce Traceability Initiative (PTI)?
A: First and foremost, I wanted to spend more time with my wife and family; I got married last year. We’re very motivated by our faith and want to do things that honor our faith. Running your own company allows the flexibility to do things in ways you want to do them to insure integrity and honesty, and more opportunity to make sure morals and ethics are upheld. When working for someone else, there can be conflicting directions.
A good thing throughout my career is that half of my work has been on the technical side and half on the business side, and that’s what allows me to be so effective with business solutions that involve technology.
Early on, this played out with Efficient Consumer Response (ECR). This was a big thing in the packaged retail industry. This initiative in early 1993 was focused on supply chain efficiencies, including business as well as technology changes. A lot of what happened then is what we’re going through now in supply chain challenges. This gave me a lot of insight in best business and technology practices.
ECR promised $11.1 billion in supply chain savings. In 1997, foodservice did the same thing with Efficient Foodservice Response (EFR), which promised $14.8 billion in supply chain savings.
Q: Did ECR and EFR fulfill their promises?
A: That I don’t know in terms of the projected numbers in savings. It’s very difficult to quantify but there is no question the solutions led to transformational improvements in supply chain efficiencies and costs.
Across the food industry, influential groups were backing the EFR initiative, primarily on the buy side, generating momentum in the industry so suppliers would follow. PTI, which handles both retail and foodservice, is about standards and efficiencies; it’s the same exact concept. Through ECR, EFR, PTI and all other food safety initiatives, they all use this common thread of standards and efficiencies.
That’s what makes my company so valuable. I’ve already gone through this with ECR and EFR. I was part of the steering committee and key subgroups with both ECR and EFR, and then PTI as lead staff and primary architect. And then the GS1, Foodservice GS1 US Standards Initiative, the milestones are to match PTI.
In addition, there is the meat and poultry traceability initiative. And then, finally the one just coming out, more generically… the seafood traceability initiative.
You can see ECR packaged goods, EFR foodservice, PTI produce, meat and poultry, and seafood cover all elements of the food industry. Every single one of these initiatives uses the same standards GS1 initiative.
Q: So the standardization across industries is the critical factor?
A: If you’re a retailer, you do business not only with produce, but with meat, poultry, seafood, and consumer packaged goods manufacturers. If all these segments use the same standards, you have one purchase order system. If you want to analyze sales you can use the same field GTIN number, whether produce, poultry, fish or packaged goods, and you use the same scanners; all you have to do is buy one set of scanners.
The same holds true for the foodservice industry from the foodservice buyer standpoint.
With the introduction of the GS1 standard into PTI, I helped influence the other fresh food sectors to also use the GS1 standards by giving them the produce template for their sectors. All the other initiatives are using that specific template and adapting to their sector.
Q: How far along in the process are these different industries?
A: The meat and poultry initiative already has guidelines published, and it’s in the implementation stage. Foodservice GS1 US Standards Initiative is also being implemented. It has 55 backers. Distributors, manufacturers and operators actually funded the initiative. The last one is the Seafood GS1 Initiative, and we’re hoping to finalize guidelines sometime in September of next year. We finished produce, and every week, I helped meet challenges for seafood. I’ve been working on it six years.
Q: This must be gratifying for you to see a confluence of standards across industries. Haven’t you met with quite a bit of resistance, and been confronted by a myriad of issues and concerns from produce industry executives?
A: It is exciting for me to see it come around. I’ve been preaching this method ever since I worked for GS1, 13 years ago. It’s finally coming through. There’s still some hesitancy, but maybe people will start understanding the breadth and scope of this. No one has been able to provide lucid arguments of how PTI runs counter to supply chain efficiency.
I have an example to articulate my point: say you’re Chairman of the Board with 20 people on the board of an international company. Each comes to the meeting speaking a different language. How efficient would you be? You’d need translators, so you’d need to pay 20 different translators, which is more cost, but you’d also be investing in the hope that people are translating correctly, and then expecting people to understand in the same way. The process takes longer and is less accurate.
If the supplier, distributor and retailer are all using their own unique reference numbers, they’re all talking different languages. Multiply that by the entire supply chain and extrapolate the costs and you have a grossly inefficient supply chain. How great it would be to all if they are using the same number for traceability and efficiency. That’s what ECR and EFR did.
Q: It seems you’re framing the benefits of PTI now more about efficiency than about traceability…
A: The big argument with PTI was all about traceability, but what we didn’t emphasize was that it could also help with efficiencies. The basic point with traceability was that anyone touching case number 999 writes and records number 999 coming in and going out of a facility, and as it travels through the supply chain… then if there is a problem you’re able to track case 999.
Q: How will PTI play out in the New York region, rich in wholesalers like those on the Hunts Point Market, brokers, small foodservice purveyors, local growers, such as Amish farmers, and the auction scene? Doesn’t this dynamic create numerous complexities?
A: Due to the fact that there are so many terminal markets and farmers and brokers in the New York region, it will help for them to attend my session at the New York Produce Show and Conference because that area hasn’t been addressed in detail with PTI.
There’s a fact we’re all going to have to get used to: the current law out there as it relates to the Bioterrorism Act doesn’t exclude those players. Current legislation both in the Senate and House of Representatives doesn’t allow exemptions for the terminal markets, brokers, smaller farmers, and all those elements of the supply chain you mentioned.
You just need one area of entry not monitored and that’s where terrorists will focus attention or where contaminated product will get into the food chain. All it takes is one company not to adhere to the regulation and it will ruin it for everyone. If everyone in the supply chain except for one company spends time and money and resources to create traceability, and one company gets hit by a recall, it will tarnish the integrity of the whole chain process.
Q: Is it realistic to expect every single player involved in the intricate supply chain throughout the New York region to implement PTI?
A: If the Bioterrorism Act doesn’t give exemptions, and the proposed traceability initiative doesn’t, terminal markets, brokers, and smaller farmers will be bound by this like everyone else. They need to come to the session and find out what they need to do to adapt this to their process. It hasn’t been done to this point.
These conversations will not be easy. They are very difficult and very challenging. But if you believe the premise that proposed current legislation is going to pass, they’ll have to deal with it. Instead of fighting it, they need to find a way to adapt with the least cost and resources. They need to take proactive steps now.
Q: Why is there so much resistance? Isn’t it essentially inevitable that there will be an outbreak or recall at some point, regardless of industry diligence, food safety investments, best practices, product testing and other preventive measures?
A: This is not related to food safety, but traceability is an aspect of it. Food safety in my definition is ways to prevent foodborne illness from occurring. Traceability is what happens in the event if something slips through the food safety net, which is inevitable. You can not test every single piece of produce in the supply chain. That’s when traceability comes into play.
Q: Is PTI the only answer? Aren’t there other viable alternatives?
A: I’m a very passionate person. If I believe something is honest and credible, then I get behind it with a lot of passion. That’s why I think I’ve been effective because I truly believe it’s the right thing to do, and holistically the most efficient way to go about it. I’ve seen it work with all these other initiatives. I’ve worked with all these industries that have a lot more dollars in it.
Number one, it’s an honest solution; and number two, it’s an efficient solution. That is why no one has been able to come to me with an alternative that is better. The toughest part is trying to convince one company, whether buyer or seller, to look at what is best for the whole supply chain. If a buyer says do it my way, it’s more cost on the supply side, and vice versa, the best supply side way hurts the retail side.
Go back to my example of the international board; one of the 20 members is Russian so he thinks the Russian language is best and he’s not going to budge. Everyone else would have to learn Russian, which is very laborious and costs a lot of money and time. If everyone says, let’s come up with a common language, we’ll all have to put a little bit of work into it, but everyone benefits.
English is an international business language and most people know this. There is not a single grocery store that does not use the GS1 standard. Every retailer, not just grocers, and they can use the exact same system for produce. This is at the case level, but even at the item, case and pallet level, GS1 standards are used throughout all the initiatives, ubiquitously throughout.
Q: Could you further relate this to the unique aspects of the produce industry in the New York region? If everyone in the supply chain doesn’t participate, then doesn’t the whole traceability chain risk breaking down and becoming untenable?
A: The regional aspect is the brokers, terminal markets, and local farmers, and they have had minimal exposure to the GS1 standards that serve as the foundation for these traceability initiatives. They’re hoping they’re excluded, but even restaurants and individual stores are going to have to step it up a bit. They can’t be excluded because then it will break the whole process.
Everyone’s actions to spend money and resources to set up traceability will be for naught if a local farmer sells a produce item to Wegmans and a few consumers get sick and then it can’t be traced. All producers of that item are implicated.
Q: Couldn’t Wegmans control the outcome by only sourcing from farmers that had the proper traceability system in place? And wouldn’t that be an incentive for farmers to implement the standards?
A: The argument is that retailers won’t use them as a supplier if the supplier is not up to standards. There are ways to minimize costs for a local grower and we’ll talk about that in the presentation. The terminal market has a different service operation and system, which involves other strategies. My company doesn’t sell anything other than council to help people understand how it will impact their operation. I work with companies on strategies of incorporation and implementation.
Gary has often helped us to better understand traceability, contributing pieces such as these:
Now we are looking both for an update, especially since this voice pick has been approved, and a label modification required by PTI. We are also looking forward to hearing Gary speak to how a more fragmented industry can best deal with traceability issues.
Although Gary makes the point that everyone needs to be involved, we can’t say we see how that will evolve in the absence of not only legislative mandate but vigorous enforcement. We remind Gary of the story we have often run… one sent to us by a most intelligent wholesaler regarding “Ken, the guy in the red truck”:
Putting in a system to trace product gets more difficult the further down we go in the distribution chain. Stand on the floor on a busy Terminal Market and try and imagine where the product goes after it is sold by the Wholesaler. A customer known as “Ken, the guy with Red truck,” pays cash for a pallet of tomatoes. He takes the tomatoes to his garage where the boxes sit on the floor next to cleaning supplies, motor oil, and who know what else.
He and his kids (2 of whom just used the toilet without washing their hands) dump the tomatoes on a dirty tarp to sort them for color. The green ones sit in the garage for a few days to color up during which time one or two rodents snack on tomatoes. When they finally ripen, Ken delivers the tomatoes to some of the finest restaurants in town for all of us to enjoy.
Somehow I don’t think that Ken or even a legitimate small wholesaler or purveyor is interested in investing in a traceability system. They will have to be dragged kicking and screaming to the table. The problem is that the system is only as good as its weakest link, and unless Ken is a part of the system it doesn’t work.
We’ll look forward to hearing what Gary has to say to “Ken” at The New York Produce show and Conference.
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