18 - Innovating Food, Innovating the Law - Timpano e Lanini

Innovating Food, Innovating the Law
An interdisciplinary approach to the agro-food sector
Università Cattolica SC Piacenza, 13-14-15 October, 2011

Traceability at the interface
between economics and the law

1

Key word, Key concept
• Traceability between law and market
• Traceability, essential lever for the competitive advantage in the
supply chain
• ICT, “conditio sine qua non” for implementation and utilization
traceability
• The problem : upstream and downstream along the Supply
Chain
• State of the art: difficulties for a perfect management of rapid
alerts and delays in ICT
• Economic outlook: the critical economic scene makes it hard to
find further investments for the best ICT management: the
withdrawal for rapid alert is still very expensive
luca.lanini@unicatt.it francesco.timpano@unicatt.it 2

Reflexions plan
• The two dimensions of traceability:
– the health “dimension” (quality control and “food safety”)
– the economic “dimension”, as a competitive market lever ( “the
differentiation by value” according to M.PORTER e M.CHRISTOPHER)
• The health dimension is fundamental in international
regulations (Reg 178/2002)
• The economic dimension is linked to the RETAIL FOOD
STANDARD dictated by the downstream operators of the
supply chain (BRC, IFS, GLOBALGAP)
Implementation of traceability systems is linked to ICT
spread. Without ICT, tracing is not possible.
This concept has never been written in REGULATIONS,
but it’s the actual LEVER of the competitive advantage.

Traceability between LAW and MARKET
• Traceability is an obligation for the European legislator
(it’s an essential food safety instrument)
• Traceability is a fundamental requirement in retail food
standards (BRC, IFS, GLOBALGAP)
• Traceability is a fundamental requirement in the
voluntary regulations of ISO systems (ISO 22000)

CIES - Food Business Forum – it’s an independent network formed
by 175 retailers and 175 suppliers in 150 countries worldwide
GFSI - Global Food Safety Initiative , project within CIES (created in
Geneva, 2002)

Traceability for IFS, BRC and ISO
IFS point 4.18 requirement K.O. n° 3
ITA “l’organizzazione deve definire un sistema di rintracciabilità che permetta
l’identificazione dei lotti di prodotto e la loro relazione con le partite delle
materie prime, dei materiali di confezionamento primario e dell’unità di vendita
destinata al consumatore finale, con le registrazioni relative alla fabbricazione e
alla distribuzione”
BRC-FOOD point 2.13 fundamental
ITA “l’azienda deve avere un sistema che abbia la capacità di rintracciare e seguire
tutte le materie prime (incluso il materiale di imballaggio primario) dall’ingresso
in tutte le fasi del processo e della distribuzione del prodotto finito al
consumatore”
ISO 22000 FSMs Food Safety Management Systems - 7.9 Traceability System
ITA “L’organizzazione deve stabilire a applicare un sistema di rintracciabilità che
consenta l’identificazione dei lotti di prodotto e le loro relazioni con i lotti delle
materie prime, con le registrazioni di processo e di consegna. Il sistema di
rintracciabilità deve essere in grado di identificare i materiali in ingresso dal
fornitore diretto e il percorso iniziale della distribuzione del prodotto finito.

The state of the art: Is everything ok?
• In 2005 the regulation 178/2002 became mandatory…
• …and the food traceability has become a “conditio sine
qua non” of the international relations (BRC, IFS,
GlobalGap), regardless of the reg. 178 !
• The implementation of traceability systems seems
(apparently) concluded …
• …but it’s not so simple to speak about the concrete
reliability of these systems !!
• In general, in view of an Alert problem, many daily lots of
products are withdrawn as a safety measure…
• …but in reality an efficient traceability system would
noticeably reduce withdrawals (with a concrete saving of
costs as a result)

Physical and information flows:
the double challenge of traceability

 Developing a traceability system along the
supply chain consists in systematically
connecting an information flow with a
physical one

• Since the implications of food risk
management are increasing, a “new
positioning” of the whole supply chain is
required in relation to the information
management

Widely shared opinions

• Traceability is an extraordinary competitive
advantage instrument …
• a competitive advantage that is totally based
on the information control and management
• with an important interaction with logistics…
• … and that requires an strong cooperation
among all the operators (general exchange of
data)

The additional (and expected…)
advantages of traceability
• Improvement of client/supplier relationships
• Openness
• Supply Chain rationalization and consequent
cut in costs


Why should we track & trace?
To reduce the costs of product recall and
withdrawal in the management of rapid alerts
• 1990: Benzene contamination
• Withdrawal of the whole production all over the world
• Operation cost: 150 thousand Euro
• The firm is taken over by Nestlè

• 1999: sulphur poisoning and presence of a fungicide
• Withdrawal of 50 million tins
• Operation cost: 1 million Euro
• Loss in the share price: around 50-70 million US$

• 2000: LYSTERIA MONOCITOGENES in pig by-products
• The companies Coudray and Système U were sued

10
luca.lanini@unicatt.it francesco.timpano@unicatt.it

Rapid alert: the difference between
withdrawal and recall
WITHDRAWAL
• Every measure able to prevent the product
retailing, display and offer to the consumer

RECALL
• Every measure able to succeed in the
removing of a dangerous product with
which the supplier or the distributor has
already supplied or provided the costumer

How to deal with a RAPID ALERT ?
• Consumer complaint (lot)
• Client complaint (bar code, pallet,…)

• Identification of the suspect LOTS along the
supply chain (stores, logistic platforms, etc.)
• WITHDRAWAL and RECALL
• Investigation among the suppliers

Internal traceability

Bottom-up traceability Top-Down traceability

Internal traceability

Upstream traceability

Downstream traceability


Tracking & Tracing
Upstream Downstream

Raw Food industry Logistic Store
materials and Logistic platform
Packaging platform

Store
 ISO 8402 Consumer

“Theability to trace the history,
application or location of an item or
activity by means of documented
source:
recorded identification”
15

PRODUCT TRACEABILITY
Qualitative way

Ability to trace the origin and the features of
products in every point of the supply chain TO
FIND THE CAUSES OF A QUALITY PROBLEM

Ability to trace the location of products in
every point of the supply chain TO DEAL
WITH THEIR WITHDRAWAL
LOGISTIC TRACEABILITY
Quantitative way


DOWNSTREAM TRACEABILITY

Platform
Store a) = Lot n°1 Store a)

source:
Recall
Lot n°2 Recall
Lot n°2
Store b) = Lot n°2

Store a) = Lot n°1
Store b) = Lot n°2

Withdrawal Store b)
supplier Lot n°2 17

UPSTREAM TRACEABILITY
• The regulation 178/2002 states that every
firm must be able to identify all its
SUPPLIERS

DOWNSTREAM TRACEABILITY
• The regulation 178/2002 states that every
client-firm (that has received products from
its SUPPLIERS) must be identifiable


TRACEABILITY AND I.C.T.
• DEVELOPING A TRACEABILITY SYSTEM IN
THE SUPPLY CHAIN CONSISTS IN :
SYSTEMATICALLY CONNECTING
AN INFORMATION FLOW TO A
PHYSICAL ONE

BUT THE FOOD SYSTEM RECORDS SEVERAL
DIFFICULTIES !!
And information doesn’t pass from a ring of
the chain to another…

THE NEW PRINCIPLES OF TRACEABILITY

Identification

Connection

Data record
Communication
(receiving-conveying)

SO, WHAT’S A TRACEABILITY SYSTEM?
• An advanced system for the control of the in and out-
flow of items
• Every firm must be able to:
• Identify and label items (common language)
• Optimize the receiving and delivery of items
avoiding mistakes (speed and accuracy)
• Facilitate the information sharing to support the
withdrawal and recall process
The preparing of the lot is the most critical point because it
determines the precision of every traceability system.

Tracing the LOT: that’s the concrete aim of
traceability!
• The pivot of a traceability system is the identification of the
object to be traced: the LOT
• Every traced object has to be UNIVOCALLY IDENTIFIED. That’s the
only way to reach all the data about the history, application and
location of the LOT
• By Tracing the PALLET, it is possible to find the LOT to be recalled
PRODUCTION AREA DISTRIBUTION AREA

link link
L. 123ABC
between LOT PALLET / LOT
and PALLET and PALLET

Link PALLET-DESTINATION Link PALLET-DESTINATION


Risks of inefficient TRACEABILITY
Using too wide TIME WINDOWS (based CRITICAL POINTS
on daily LOTS) for WITHDRAWALS is a
sign of WEAKNESS:  Vertical
the firm is not able to link the product- relationships
LOT with the PALLET-lot (generally a  ICT management
multi-lot pallet) in the final part of  ICT integration
delivery  Logistics

• Is the ICT LINK between the product-LOT and the pallet in delivery
guaranteed ?
• Is the transmission of EAN 128 Code guaranteed all along the
supply chain ?
• Are the Lot-Codes always indicated on the DELIVERY NOTE (DDT) ?

An imperative : revising the vertical relationships
about traceability and logistics
Quality / Safety

time
Quick adaptability costs


18 - Innovating Food, Innovating the Law - Timpano e Lanini

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