How do we improve traceability in food value chains? A recent report by the World Economic Forum in collaboration with McKinsey & Company outlines in great detail new strategies that stakeholders can take advantage of. They explore ways within complex and extended supply chains that those responsible for marketing perishable goods can take to improve the traceability of food shipments within their value chains as they're shipped around the world.
The report begins with an overview of the vast food value chain that now exists:
"The food and agriculture sector is the single largest employer in the world, despite a majority of its workers living in poverty," the report states. "Nearly one-third of global food production is wasted, yet up to 800 million people are chronically undernourished. In addition, the food systems are responsible for 25 percent of global greenhouse gas emissions, while climate change in turn threatens up to 25 percent of crop yields."
These issues are part of the peripheral problems caused by a worldwide food value chain. However, the report also goes into some of the food safety concerns that arise as products are demanded and consumed in one part of the world, and more often than not, produced in another. The report goes into a detailed discussion about the potential benefits of traceability.
Traceability, they state, helps to make much of what is unseen within our food systems more visible. "It could potentially facilitate comprehensive tracking of the environmental, economic, health and social consequences of different agricultural production processes, even making it possible to calculate the true cost of food which will help meet consumer demand for transparency."
The report explains that producers of all sizes that are looking to harness potential efficiencies that might be brought about through the transparency that traceability affords may realize cost savings and new value sources in the process. Traceability, they say, could improve producer revenue and yield greater access to markets and opportunities for additional access to capital. This traceability, though, comes about through technology.
More specifically, the technology in its production of traceability for food shippers enables them to meet consumer demand for food production transparency; further enhances their ability to identify, respond to, and even prevent food safety issues; supports supply chain optimization and reduces food loss. It also validates and verifies sourcing claims to support sustainability goals. The report discusses these four benefits in depth.
In fact, it provides very specific detail and explores all the pluses and minuses of how technology improves traceability and how traceability benefits society. The report concludes:
"Technology-enabled, end-to-end traceability in food value chains, coupled with multi-stakeholder collaboration, has the potential to fundamentally improve food systems. To achieve its full potential, stakeholders will need to come together to enable emerging technologies and to install a broader system in standards. This collaboration should be built on a shared vision and executed with the recognition of the mutual benefits of partnership."
The authors specify several areas that will continue to be a focus in the global food system transformation. These include "a multi-pronged approach focused on the application of emerging technologies across food system pain points." They also state, "Emerging traceability technologies could be a powerful tool for small-scale producers; however, without the proper pathways to scale, there's a risk of such producers getting left behind due to the upfront costs and operational requirements." Lastly, they note, "Harmonized standards, ongoing technological development to drive down cost, a continued focus on robust economic models and effective communication and training programs are fundamental to scaling traceability."
Traceability has multiple benefits. Such benefits are seen not only from a safety perspective, but also as a critical link from the perspective of world economic development and the ability of suppliers big and small to understand the food value chain so that it can benefit everyone. All too often, traceability is referred to as a component of safety, as it's something that comes into play rapidly in the event of a recall or outbreak from contaminated food or other perishables that have gone bad.
But traceability also has other useful functions for shippers, carriers, and many other stakeholders along the end-to-end extended supply chain. It can be used to help develop that supply chain, because it's not just a regular supply chain when food and perishables are involved. It's a food value chain and should be viewed that way.
As we ship more perishables, control of such shipments is concerning. Better ways to trace and track such shipments will be important and meaningful to those who need to know the precise path a product takes in order to accurately track it and control it.
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