ISO (International Organization for Standardization), which develops voluntary international standards for products and services, defines traceability as the “ability to trace the history, application, or location of that which is under construction”.
A system for tracking every input and process to satisfy every objective would be enormous and very costly and therefore firms must determine the necessary breadth, depth, and precision of their traceability systems depending on characteristics of their production process and their traceability objectives.
What are the benefits?
The benefits associated with traceability include lower cost distribution systems, reduced recall expenses, and expanded sales of products with attributes that are difficult to discern. In every case, the benefits of traceability translate into larger net revenues for the firm. These following benefits are driving the widespread development of traceability systems across the world food supply chain.
Traceability to improve supply management:
The ability to reduce supply chain costs often marks the difference between successful and failed firms. In the food industry, where margins are thin, supply management, including traceability, is an increasingly important area of competition. A firm’s traceability system is key to finding the most efficient ways to produce, assemble, warehouse, and distribute products.
Electronic coding systems, from the barcode system to cutting-edge technologies like radio-frequency identification systems, are helping to streamline the food supply system. As technological innovation drives down the cost of these devices, more firms across the food supply chain are using electronic tracking systems. In some cases, buyers manage these systems to monitor internal supply flow. In others, firms establish systems that link suppliers and buyers, allowing them to automate reordering. Retailers such as Wal-Mart have created proprietary supply-chain information systems, which they require their suppliers to adopt.
Traceability for safety and quality control:
Traceability systems help firms isolate the source and extent of safety of quality control problems. This helps reduce the production and distribution of unsafe or poor-quality products, which in turn reduces the potential for bad publicity, liability, and recalls. The better and more precise the tracing system, the faster a producer can identify and resolve food safety or quality problems. One surveyed milk processor uniquely codes each item to identify time of production, line of production, place of production, and sequence. With such specific information, the processor can trace faulty product to the minute of production and determine whether other products from the same batch are also defective.
Many buyers, including many restaurants and some grocery stores, now require their suppliers to establish traceability systems and to verify, often through third-party certification, that such systems work.
Traceability to market and differentiate foods:
The African food industry is a powerhouse producer of homogenous bulk commodities such as Tea, Coffee, Horticulture, and meats. Increasingly, the industry is tailoring goods and services to the tastes and preferences of various groups of consumers. Consumers easily spot some of these new attributes – green ketchup is hard to miss. However, other innovations involve credence attributes, characteristics that consumers cannot discern even after consuming the product. Consumers cannot, for example, taste or otherwise distinguish between conventional corn oil and oil made from genetically engineered (GE) corn.
Process attributes do not affect final product content but refer to characteristics of the production process. Process attributes include country of origin, free-range, dolphin-safe nets. Regulated and controlled fishing, shade-grown, eco-friendly, and fair trade. In general, neither consumers nor specialized testing equipment can detect process attributes.
Traceability is an indispensable part of any market for process credence attributes – or content attributes that are difficult or costly to measure. The only way to verify the existence of these attributes is through record keeping that establishes their creation and preservation. For example, tuna caught with dolphin-safe nets can only be distinguished from tuna caught using other methods through a record keeping system that ties the dolphin-safe tuna to an observer on the boat from which the tuna was caught. Without traceability as evidence of value, no viable market could exist for dolphin-safe tuna, fair-trade coffee, non-biotech corn oil, or any other process credence attribute.