How to simplify the supply chain journey

Consumers’ daily lives revolve around trust. Every day, when peeling an orange, opening a can of baked beans or dining in a favourite restaurant, consumers put their trust in Australia’s food supply chain.

Behind every food and beverage product on the shelf is a supply chain journey that starts with ingredients. The Australian food manufacturing industry is an intricate maze of ingredient and packaging suppliers that have different supply chain management solutions.

Sourcing ingredients without a traceability and food safety protocol today invites counterfeit products onto the food chain and increases the risk of contamination. News of unsafe or spoilt food can impact business owners’ livelihoods and the industry’s broader reputation, and causes significant disruption to consumers’ lives.

“To manage ingredient safety and increase the visibility of food ingredients and raw materials in these complex supply chains, a new initiative, the Supply Chain Improvement Project, is being implemented using GS1 standards,” said Steele. “The project’s objective is strengthening integration between the thousands of upstream supply chains in the Australian food manufacturing industry.”

An industry working group has been set up to drive the project using the GS1 global standards for product identification, data capture and data sharing. GS1’s Global Traceability Standard (GTS) is the foremost traceability framework, allowing businesses to track their products in real-time and have end-to-end visibility of the supply chain.
“The group will work to achieve consensus across the industry to improve food safety, deliver efficiencies and reduce costs,” said Steele.

Representatives from Nestlé, Ingham’s, SPC, Lion Dairy and Drinks, Sanitarium, CHR Hansen, Newly Weds Foods, FPC Food Plastics, Labelmakers, Matthews Australasia and Visy Industries make up the group.

The ability for companies to capture material movements from “paddock to plate” provides data integrity and timeliness from receipt to delivery, with traceability back to the source. Through automation, many of the manual processes are eliminated and businesses can be proactive with inventory management and handling systems.
“As a food and beverage business it’s critical for us from a food safety perspective to be able to track ingredients all the way back to the origin,” said SPC’s national logistics manager, Christian Lecompte.

Also critical to business is the capability to support information and production flow within existing systems for integrated supply chains. The project has the capacity to eliminate waste within an organisation’s value stream, reduce non-value-added tasks and ensure cost-effective solutions for customers, leading to a “right-first-time” approach for all deliveries.

“One of the things we found we could do to be more efficient was to look at opportunities to be able to electronically track all the product ingredients throughout the production cycle – how we identify a product coming into the warehouses, how we receipt goods, how we put our goods away, how we manage our inventory and how we deal with our suppliers,” said Lecompte.

The adoption of GS1 standards as the common language for identification, data capture and data sharing will enable automation of key ingredient sourcing and traceability between ingredient suppliers and food manufacturers.

Using GS1 standards for upstream integration goes well beyond minimum standards. It allows businesses to translate their internal processes and approaches into the one common language that all trading partners can use and understand, without having to translate data formats across different supply chain management systems.

This is the key, as Steele believes interoperability is essential to the future of data sharing. “Establishing international standards to ensure transparency across the supply chain can help lower existing barriers to the exchange of data between suppliers, trading partners and consumers,” he said.

The Supply Chain Improvement Project has the potential to deliver many benefits to industry, including increased visibility of food ingredients and raw materials, unique identification and traceability to improve food safety, and reduced costs with automated business transactions.

Nestlé Australia’s eBusiness manager, Mandeep Sodhi pointed out the key to the project’s success.

“By having consensus across the industry on how to interconnect electronically and exchange critical operational data, we can realise cost-effective solutions across the end-to-end – from manufacturers, to suppliers, to customers. Everyone benefits from this improvement in standardisation,” he said.

Looking ahead, the industry working group is encouraging all upstream businesses to adopt the food safety and traceability protocol using GS1 standards.

“With an industry-wide solution in place, your trading partners will have more visibility of your products across the supply chain,” said Steele.