Traceability for improved freshness and lower cost: Walmart’s produce plan for the future
The retailer’s new plan aims to improve labeling and tracking.
When Walmart acts, the food industry notices. So when the retailer announced a produce traceability initiative (PTI) mandating standard case labels including GTIN, lot/batch#, voice pick code and pack or sell by date, Food Engineering wanted to know more. We spoke with Tom Kozenski of JDA Software about Walmart’s efforts to implement Produce Traceability Initiative standards and what it could mean for the future of fresh produce retail. Kozenski says proper labeling and tracking will provide improved product freshness and give all parties greater inventory visibility and control, lowering overall supply chain costs.
FE: Obviously, this is not the first demand Walmart has made of its suppliers. Do you have a feel for how many already comply?
A: It is only a small percentage today. I estimate 10 percent or less are fully compliant. I expect that the other 90 percent will struggle to be ready by the 2014 Walmart deadline. Adoption by other retailers will help accelerate supplier adoption. Walmart predicts 60 to 85 percent of other retailers will embrace PTI by the end of 2015.
FE: This demand means Walmart suppliers need more than just label-printing software to execute proper compliance. Are most ERP systems up to this?
A: Yes, they are. This type of inventory identification had been going on for years in many industries. But it is a new concept for fresh produce.
FE: Do most producers have ERP systems that can tie in track-and-trace, label printing and supply chain systems?
A: No. This is new ground for producers. Until now, they have not been required to support this type of program for fresh produce.
FE: Are there any “software-as-a-service” applications (SaaS) that let produce suppliers get a program together without breaking the bank?
A: There may be some “slap-and-ship” products that can support manual processes, but these types of products can be error prone. Accurate, real-time data is critically important when it comes to QA, recalls, and item freshness tracking. Companies need to evaluate how they can utilize integrated solutions that are able to accurately capture data and electronically share it with their partners and customers.
FE: Walmart isn’t waiting for FSMA. What do you see in the Walmart program that will, in the end, make produce safer?
A: On its face value, the PTI program will make produce safer across the entire supply chain. Products will be properly identified, showing the source of each item. But the program does not address the need for proper quality control prior to the distribution of fresh produce. I think that is where FSMA regulations will help.
FE: What are the costs for producers that don’t have a coordinated (integrated) system? Can you break the costs down by which modules/programs may need to be added to come up to spec?
A: The costs will vary. An integrated system would include modules for production planning, order management, quality control & recall, inventory management and EDI. This is a dramatically different approach than using only a slap-and-ship product.
FE: How will these Walmart demands help with products that have several ingredients from a number of countries or states?
A: Actually, these PTI demands relate to fresh produce and are not related to manufactured foods, so ingredients are not necessarily tracked. There are other solutions used by process manufacturers that track the ingredients that make up a finished good, the lot code and expiration date of the ingredients, and the supplier/source of the ingredients.
Produce suppliers have until November 1, 2013 to comply with Walmart’s new traceability requirements or they risk having product rejected as out of spec.
As VP, industry strategy for JDA Software, Tom Kozenski is responsible for driving the product direction of JDA’s Warehouse Management and Workforce Management solutions for both the manufacturing and retail sectors. Kozenski joined JDA as part of the JDA/RedPrairie merger in 2012, where he worked for 17 years.