In what is being touted as the industrial visibility era, more and more companies are employing track and trace technology to stay in the game. Consumer goods giant Unilever recently announced that they will be using geo-location technology to gain and provide more transparency into their palm oil supply chains.
In order to track the palm oil farm to table journey through thousands of supply chains and gain insight on its first mile traceability, the multinational will enable this technology through the use of geo-location data on cell phones. Having conducted a test run in Indonesia, they now plan to scale up the process to incorporate all other palm facilities such as farms, refineries and processing plants in the Southeast Asia region, and are examining the possibility of implementing the same technology in other regions.
The company acquires around 1 million tons of palm oil and palm kernel oil every year, making it one of Unilever’s most integral raw ingredients. This cheaper option of edible oil is used in a number of products like cosmetics, soaps, chocolate and even ice cream; and although the most integral, it is also however one of their most controversial raw ingredients. Hasty expansions of plantations in order to produce and supply this extremely versatile oil has led to much destruction of wildlife and burning of tropical rainforests. The layered and complex nature of these supply chains that start with millions of hectares of land prove to be an extreme challenge in terms of industry insight and visibility. By implementing track and trace technology, Unilever is determined to create more transparency in the industry and better position themselves to assess environmental risks. Their aim is to have all their supply chains be completely ‘deforestation-free’ by 2033.
Depending on the industry, achieving transparency into the first mile of supply chains can be extremely challenging. Crops like palm oil fruit for example can be harvested in many different areas of land owned by different farmers, and could end up being mixed with raw materials from other plantations before actually even reaching the mill. Using geo-location data and advanced track and trace technology to monitor this movement paves the way forward for a more transparent process of every step of the supply chain.
Consumers are the driving force behind this extremely significant shift in demand for visibility. Across all industries, consumers have become more conscious about the ‘sustainability factor’ of not only the products they are purchasing but also the raw materials that have gone into making those products. Willingly or unwillingly companies have had to meet this demand by making clear to their customers that they have complete transparency into not only the source of their raw materials, but also the ethical conditions of how those raw materials are produced. Our track and trace technology offers complete visibility into multiple layers of the supply chain, providing monitoring methods with enhanced transparency. Our technology is applicable to the food industry and creates a direct connection to the journey of food items from farm to table. Creating a standard of transparency is becoming one of the integral foundations of any company’s brand image today.
Over the last decade or so, there’s been a gradual spike in consumer expectations for real time supply chain visibility. Spread across all industries, this dimension of service is now directly related to the quality of reputation of any organization – big or small.
In order to ensure a reduction of waste and ultimately costs, the food and beverage industry is transitioning into becoming quite heavily reliant on track and trace technology as a form of advanced supply chain visibility. By creating and employing this solution for the fresh produce industry, our technology tracks and traces food items from farm to table. Being able to access and obtain critical information at every step of the supply chain journey can save food items from being discarded because of unmonitored problems that occur along the way, as well as circumvent error in multiple layers of the journey.
The COVID-19 pandemic has brought to light the fact that many years of working toward optimizing food supply chains for cost have definitely left them lean, but also extremely fragile. Food processors and producers who make up this line of lean manufacturing have customized production lines, outgoing inspections and capital equipment to meet the requirements of buyers, leaving only a handful of companies in the position of production and distribution control of many major food categories. And while these strategies do help in enabling cost cutting in the short term, what they actually do is end up putting suppliers in a position where they’re not able to adequately adapt to shifts in demand, or sustain broken links in the supply chain.
A notable example of this is when farmers had to resort to burying their surplus crops as well as pour out gallons of milk as recently as April of this year – all while empty shelves at grocery stores stood tall. This is also the reason why there was a nationwide shortage of meat upon the closure of the 4 major meatpacking plants, which are responsible for a whopping 85% of the country’s meat production. America’s food supply chains are unfortunately too delicate to sustain the blows of a crisis or for that matter any major level disruption in chain flows.
In order to “maintain the health of the food supply chain” the government announced aid in the form of $19 billion to facilitate compensation for farmers due to losses brought upon by the pandemic. Although this stands as a significant amount, it is not the solution to the actual problem at hand.
To secure supply, we need to restructure our supply chains by enabling producers with the convenience of switching between paths as required to avoid shortages, and make use of surpluses, through creating multiple paths to the market for every single food item. The structure of supply chains is already organically gravitating towards becoming more circular with surplus or unused food items being fed back into the system for recycling or reprocessing. This kind of change means a shift from set ways of the principles of lean manufacturing and embracing a more flexible and in effect more resilient approach through digitizing systems with real time visibility into supply chains.
Suppliers, service providers, original equipment manufacturers and IT systems all make up the vast supply chain ecosystem, and visibility into a supply chain means visibility into each of these intricate webs of processes. Collecting data and making it accessible and available through creating a literal digital twin of the physical food item journey allows for a complete track and trace of processes. Through this kind of greater visibility into every step of the journey, we enable more flexibility and security. If a supplier for example is unable to deliver, or there is a sudden shift of demand – companies are still able to make a seamless reroute to another chain, with no disruption to cash flow or production.
According to the USDA, a significant 30-40% of all produced food in the country is completely wasted across all networks in supply chains. Greater visibility into supply chains also allows companies the opportunities to identify unused and surplus produce, giving them a chance to reprocess or recycle them back into the supply chain. Waste can also be composted and used to fertilize crops, or even recycled into animal feed.
It is not the shortage of food that proves to be the problem in the United States, but rather a systemized distribution of it instead, as was highlighted as a by-product of the pandemic. By creating a system that is built on the value of transparency and flexibility, our supply chains stand the chance of not only sustaining the next crisis more efficiently but also adopting a more ethical and environmental approach.
To think that there are different parts of the world plagued with ‘food scarcity’ problems when there is an average of about 63 billion tons of food that goes to waste in the United States every single year, is quite mind boggling to say the least.
The agricultural industry, restaurants, consumers and retailers are all contributors to this pressing issue of food waste, which is costing stakeholders around $218 billion annually for processes of growing, shipping and disposing of uneaten food. The economic impact of this multi-billion dollar problem is at the core of concern for growers and retailers who are looking for a solution. A digital marketplace is projected to alleviate this burden as well as create a more sustainable outcome by reducing the carbon footprint of many supply chains.
A better and more direct connection to the journey of food items from farm to table, for both growers and retailers through the implementation of track and trace technology will have a significant impact on food waste reduction, and correct inefficiencies in the market. By creating and employing this solution for the fresh produce industry, our technology inadvertently opens the door to less food waste. Accessing and obtaining critical produce information at every step of the farm to table journey can save food items from being discarded because of unmonitored problems that occur along the way. This will lead to less truck trips to unnecessary warehouses, less electricity consumed by coolers, and prolonged shelf lives through obtaining produce at optimal freshness at the store, restaurant and consumer level.
A large part of this problem is arguably the result of much technological inefficiency in projection. The aim is to eventually reach a place where produce is grown with absolute minimal surplus – exerting the application of the Japanese economic value of the just-in-time methodology. The Environmental Protection Agency advises changes to be implemented at each level of the supply chain in order to cut down on food waste at a national level.
Food waste has many different dimensions for growers and retailers at different points of the supply chain. For growers, harvesting their most valuable crop is of course what is of most importance. A large part of this is the way a certain fruit or vegetable may visually appear; if it does not look appealing or is ‘ugly’ then it is simply left out of the pile. Oftentimes if the market price of particular produce does not pertain to the many hidden costs of harvesting, packing, packaging, freight and even marketing – then growers will decide that the crop remains unharvested. Food is also discarded at the packing house if it is deemed ‘too tight’, usually a result of having been in the cooler for a prolonged period of time. The journey for many food items cuts off before even making it to the retail stage of the supply chain – much of which can be avoided through track and trace visibility into environment conditions, creating the possibility for correction.
When it comes to food waste for retailers, the problem gets a little more complex purely because there are so many more stages and processes involved, therefore presenting itself as a much bigger point of concern. According to a report by the Commission for Environmental Cooperation, it is at the retail and consumer level where more than half of all food wastage occurs. There are many opportunities for produce to be damaged during the processes of shipping and being handled and then enduring the up and down of environment temperatures, which may not always be correctly monitored. Tracking and obtaining data into each process with an available functionality to control these variants will allow for a significant number of food items to be saved from the waste pile.
While this problem racks up its monetary pressure, a problem that is running parallel is the negative contribution to the environment from the agricultural carbon footprint. All the resources used to grow food, ship and store it take a drastic toll on the environment. The food supply chain holds many different capacities of equipment, from farm equipment to packing houses and cooler electricity, as well as transportation vehicles to move produce from fields to packing houses to distribution centers to stores – all of which contribute a significant impact on the environment. Data found in a study of multiple global reports by Move For Hunger, attributes over 20% of all greenhouse gas emissions to agricultural activities; and measures the carbon footprint of food waste to a substantial 7% of all global emissions. Cutting down on food waste will directly cut down on the release of these emissions.
Through digitizing insights and making valuable information on produce throughout the supply chain accessible, we create room for growers and buyers to re strategize their trading communication process; in effect successfully cutting out any unnecessary waste and emissions in the processes of sale and delivery.
We believe in the value of sustainability, and a conscientious approach to the problem. Transcending older age processes through the advent of technology by making the farm to table journey more efficient and ethical is a step we need to immediately take, not only as players in this industry, but also as environmentally conscious citizens of the world.
As cargo vehicles carrying perishable goods are set to make their journey by intermodal rail and road from China to the Middle East and Europe, via the New Silk Road, what was once a 40-45 day journey via sea freight will be cut down to 16-18 days. While the direct impact on the number of days may prove to be a valid success for all involved industries, this new way forward does come with its own set of challenges. The route spreads its expanse through parts of China, Kazakhstan, Russia, Belarus, Poland and Germany, enduring some very extreme weather conditions with a drop to minus 40 degrees Celsius in the winter, as well as harsh terrain – an environment that proves to be far from ideal for perishable goods.
Through the advent of telematics however, logistics companies are able to combat these hurdles as they track exactly where specific cargo transportation vehicles are on their journey; and gain access to live data to examine temperatures inside containers, and requirements for engine, truck or rail maintenance – ensuring technicians are available at the next stop.
Track and trace technology is now at the core of successful implementation of food cargo transportation from producer to consumer. The access to live data through sensors, software, equipment and modern IoT devices has a valuable role to play in improving product allocation and maintenance, reducing waste and loss as well as ensuring product safety and quality compliance.
For example, the immediate identification of a shift in temperature or humidity, correlating to a non-conducive atmosphere for specific refrigerated food items allows for real time intervention. The shift at hand could be a result of problems ranging from machine malfunction, incorrect refrigerator settings or human error of doors being left open for too long during the process of loading and unloading – real time identification of the problem allows for solution implementation, resulting in reduced damaged goods and loss. Track and trace technology also allows variants to be controlled from a remote system, ensuring more flexibility of intervention over the physical environment of products.
IoT devices and sensors have the potential to play an integral role in ensuring supply chain visibility. They are proving to be especially beneficial as the world of food e-commerce continues to exponentially increase consumer expenditure on home delivery services; and the nature of higher expectations of service ranging from greater visibility of safety and sustainability rises in demand. Companies interlinked to food supply chains and perishable goods recognize this value of track and trace technology and full supply chain visibility. However, one of the biggest challenges that stand in the way is funding, and changes to general business processes.
Track and Trace Technology Obstacles
Prolonged battery life is necessary for sensors and other IoT devices to ensure uninterrupted and continued use through remote locations. An effort in this direction comes from vendors who are producing smaller devices and rechargeable batteries, and are investing in the use of solar power and energy harvesting, cutting out the need for frequent battery replacements.
Another obstacle for this technology and supply chain management proves to be interoperability issues revolving around common standards for connectivity and data exchange when it comes to proprietary operating systems. The convergence of more refined interoperability through cloud-based platforms that support a range of IoT devices and sensors has been found to be a welcome solution. These platforms enable data collection and aggregation across a wide spectrum of IoT devices, systems and sensors – creating a common platform among them all.
The Way Forward
If you’re considering developing track and trace and supply chain visibility you should begin with a feasibility study - before the implementation of any new technology, performing a feasibility study is a crucial place to start. This will help you identify and evaluate current systems that are already in place, and allow an investigation into their durability and whether they need a simple upgrade or a new replacement altogether.
Recently, track and trace solutions have been seen to be more affordable and easy to adopt than ever before. Developing end to end traceability and monitoring is now possible with our Wide Angle Visibility system. We work with our clients to implement a proof of concept on a portion of their supply chains to demonstrate the value and insights that can be gained from Wide Angle Visibility, before implementing it across the entire supply chain.
With the onset of the coronavirus pandemic, there has been a massive shift in consumer behaviour across several industries. The meat supplying industry in particular has had an increase in demand for transparency and more visibility into where the product is coming from; leading many smaller local suppliers, who have been adhering to such practices, see an unexpected boom in business.
Because of Covid-19 concerns several major meat suppliers have been forced to slow down operations or shut down their plants for a few days, leading to a shortage of supply. This has allowed smaller local producers of primarily organic meats to help fill the demand.
A well-known local supplier of organic and pasture-raised meats, has been focusing on providing their customers with transparency into their processes and produce for years. They promote the visibility of their supply chain on their website and app, which does not consist of middlemen to advance their meats from farm to table. This has enabled their sales to double in their butcher shop, and quadruple in their online capacity during the uncertainty of the pandemic.
The demand for meat across the country has grown this year. Consumer insight statistics according to Nielsen reveal a significant increase in sales. Local and smaller suppliers have reported that they have seen a rise in interest and demand in some of their more ‘niche’ meat products; many of which have gone out of their way to reassure the public that the meat supply chain remains intact.
As the pandemic continues to dip the American economy further into recession with almost 40 million Americans claiming unemployment, it is important to note that many people may not necessarily be willing or even able to pay a higher price for meat. However, most market analysts believe this could push consumers to realize that higher quality meat products are a safe and sustainable option. At least 22,000 plant workers across the food industry have tested positive for Covid-19, it is not incorrect to presume that customers will feel safer and much more at ease purchasing produce that has been fed and raised in a secure and transparent manner.
This may lead to a greater market potential for suppliers operating smaller chains of butcher shops and meat packing plants. Taking on producing, coordinating and delivering consistent supply while maintaining transparency and a standard of quality for a mass market will take time to establish and perfect. The coronavirus pandemic has pushed forward the demand for greater visibility and transparency of supply chain processes, and this shift is most likely here to stay for both smaller and larger producers.
There has been a significant increase in adoption of the digital twin technology among organizations that work with IoT projects and ventures. This technology is expected to reach a staggering $15.66bn in market size by 2023 – as concluded from a recent survey by Gartner, Inc. on IoT implementation.
A digital twin is a digitized version or clone of processes or physical assets. Data about physical assets, collected from sensors help recreate a digital version of the asset and update its state in real time. Most conventionally applied to assets, this technology generates data through heat, movement, pressure and vibrations, the analysis of which can be used to prevent unplanned machinery failure and track the movement of goods while providing granular information about the state of those goods.
A digital twin can virtually replicate an entire supply chain including multiple assets, warehouses, logistics, material flows and inventory positions – effectively emulating a supply chain’s collective performance.
Through the presence of a digital twin, the virtual replication of real time data creates less room for technical and manual errors. For example, if cargo transportation is off schedule or late, or if production machinery breaks down - real time information received through the digital twin supply chain and its continued applied knowledge through previous data will allow it to immediately implement corrective support, enabling more durable supply chain optimization.
At Nazar Systems we are using Digital Twin Technology to revamp the supply chain and food distribution. We create digital models of the collection, movement, processing, storage, logistics and distribution of goods. Creating a digital twin of the entire supply chain helps us identify logistical constraints which may have been incorrectly perceived earlier and may have adversely affected production. This enable us to help our clients meet demand on time, avoid loss and continue to identify and monitor logistical errors by replacing them with real time alerts and suggestions for improvements.
Industries where supply chains are more layered and complex with large production and distribution networks consistently face logistical challenges, which often lead to loss of critical asset value. Losses could occur due to example excess inventory or lost production time. The implementation of digital twins can combat these hurdles by enabling companies with a fully mapped digital version of their supply chains so they can apply findings in order to augment more qualitative decisions across various planning points.
Although the digital twin concept is not something that is entirely new given that this technological approach has been in place with product engineering as well as flight and Formula 1 racetrack simulators for years, what is making this extremely valuable to broader industries now is the use of real time data integration through IoT devices. The technology has created a space for companies to have deeper insights into the dynamics of their supply chains, bringing to light varied information that may have previously been hidden and was the cause of problems on an unknown lateral level. The technology also enhances the optimization of sales and operation planning by being able to simulate the execution of a particular plan; and aids in short and long term planning and execution by the early identification of risks.
The key to success is to build an accurate digital model of the supply chain. Our use of digital twin technology assist our clients by identifying hidden opportunities and highlighting the constraints; it analyzes data – structured and unstructured, as well as analyzes a range of possible situations in order to identify actionable insights. It is of great importance to have access to the correct modelling tools which enable an easy update of the technology. The use of fifth-generation programming language as well as solver software offers a high standard of visibility and ease in the process.
Companies which have digitized their supply chains have significant competitive advantages over their competitors. Customer orders and a range of related transactions can be added programmatically, updating the state of the supply chain in real time and creating less dependency on manual inputs. Coupled with a blockchain ledger, companies will have a highly secured, chronological record of their operations which can offer business insights and help with strategic decisions going forward.
Track and trace technologies have been a game changer for predictive analysis of products throughout the supply chain, from the point of manufacturing up until the point of sale. With the advent of 5G and the explosion of accurate sensors and smart devices it is easy and affordable to digitize your supply chain today.
Why Food Supply Chains Need A Granular Track & Trace Solution
Global food supply chains are extremely complex and involve multiple potential points of failure. Constantly changing regulations, shipping costs and supplier dynamics mean that supply chains are also continually evolving.
To ensure brand protection firms need to have access to granular data about their produce along its entire journey as it travels from farm to fork.
Each year billions of dollars are lost in food fraud. Counterfeits of items such as Wagyu beef and rare Italian Olive Oils are sold regularly because buyers have no way of verifying the authenticity of the items they are purchasing. Theft is another major concern across supply chains. Food and beverages accounted for 34% of all cargo theft in North America in 2018.
Adding to the complexity is the fact that food travels through multiple modes of transport often across international borders.
Currently some data exists on the conditions under which food is transported, but this data remains locked away in silos and is generally limited to parts of the journey. Furthermore, the data is available for a truck or a full container load, but there is no proof that specific data is from a specific, identified batch of product. Variance in temperature, contamination and exposure to moisture may ruin a shipment or significantly reduce its shelf life. Poor handling of food at any point in the supply chain can compromise its quality.
Inefficiencies and complications often arise regarding compliance and following the local jurisdiction’s regulations. Delays caused due to incomplete or faulty compliance can lead to the spoilage of food and prove to be expensive for multiple stakeholders in the supply chain.
E. Coli outbreaks over the past 2 decades have highlighted the need to be able to identify the point of contamination and quickly remove all contaminated units from restaurants and the shelves of grocery stores and supermarkets. Additionally, the FDA’s Food Safety Modernization Act mentions establishing a system to enhance track and trace abilities in order to “prevent or control a foodborne illness outbreak”. We believe this will usher in a New Era of Smarter Food Safety, emphasizing item level traceability.
Food companies need to have granular visibility into their supply chains if they want to protect their brand and guarantee food quality and safety.
What is Wide Angle Visibility
Wide Angle Visibility developed by our team at Nazar Systems enables users to access real time granular data about every item of theirs moving through the supply chain. We are able to monitor every unit of produce in our supply chain using the Nazar SmartELabel, a proprietary technology we’ve developed. This solution helps to address various challenges presented by today’s complex supply chains.
Wide Angle Visibility gives a user key insights in real time of all their items in the supply chain. Using a range of sensors and IoT across the board, our system generates actionable insights and tracks each unit of food from farm to fork. Additionally, we store all the data related to each item in a tamper resistant, blockchain database.
Smart contracts help code logic into the system and alert the user of specific events and changes of state. Regulation and compliance is also made faster and more transparent using this system.
An important feature of Wide Angle Visibility is the recall management function. This system gives granular control over recalls ensuring that only those specific cases that need to be recalled can be removed from the supply chain at once. Our granular data makes recall of entire production or batch lots unnecessary, thereby vastly reducing costs to the Brand and their Insurance carriers
Our sensors continuously upload data to our servers. If there is an interruption in the stream of data or a deviation from the predetermined route our system will generate an alert to the user that there may be a possible ongoing case of theft or product tampering underway which should be further investigated.
Users get a comprehensive picture of their food items as they move through the supply chain. This helps them understand where their food has been and what has happened to it through the journey. This granular supply chain visibility helps managers protect their brands and ensure that only the highest quality of food makes it to the point of retail.
Real time actionable insights enable users to make critical decisions well before food reaches the point of retail. Our track and trace feature helps reduce fraud and theft. As the FDA is encouraging food companies to take charge of the safety of their produce Nazar’s Wide Angle Visibility will help ensure safety, compliance and actionable insights.