Digitized Supply Chains Deliver Improved Visibility, Traceability, and Happy Customers

In the past few years, it has become clear that the supply chains delivering everything from microchips to corn chips all over the world are stressed. Technology upgrades are needed to serve increasingly complex, global markets more efficiently and effectively and to keep up with unpredictable supply and demand, labor shortages, and other disruptions.

In some cases, companies are still moving products around the world with one foot in the past, operating supply chains using incomplete, mismatched data based on closed-loop systems to meet the needs of modern commerce. The vulnerabilities in outdated systems came to light as the pandemic upended normal operations, contributing to widespread product and material shortages, delivery delays, backorders, and rampant uncertainty.

A lack of supply chain visibility¹ frustrates efforts to ensure food safety or improve organizational efficiency and customer satisfaction. Meeting these challenges today and into the future, in spite of volatility, requires the food industry to digitize, upgrade, and harmonize data systems so that product and supply chain information can be readily accessed and understood by all stakeholders, at all times. Key data points, such as unique product identification and location, need to be standardized and digitally encoded so that they can be automatically captured and shared up and down the supply chain, to help ensure interoperability.

Momentum for Change

The food industry, like many others, is currently undergoing a massive transformation to address these issues, leveraging digital technology to connect suppliers and retailers across the entire supply chain so that the food supply may be better monitored and managed.

With a digital framework using common data standards, trading partners can successfully collaborate to share accurate, up-to-date information and get a clear view of product status and location along the way, from point of origin to point of sale. This visibility is especially crucial for maintaining food safety throughout the distribution of perishable items, in particular. The data that is collected, updated, and shared throughout products' journeys not only keeps trading partners apprised of status, but it also facilitates faster investigations, recalls, and withdrawals, when necessary, by making it possible to trace back every step of the way.

Traceability is Key

Improving product traceability is the focus of the U.S. Food and Drug Administration's (FDA's) new Food Traceability Final Rule² under section 204 of the Food Safety Modernization Act (FSMA). The Traceability Final Rule requires additional recordkeeping for foods on the FDA's Food Traceability List (FTL)³ that are designated as "high risk" due to their implication in foodborne illness outbreaks in the U.S. Those "high-risk" food categories include shell eggs, nut butters, leafy greens, finfish, and others. The additional documentation is intended to help improve tracebacks so that the source and scope of outbreaks can be assessed and speedily mitigated. In most instances, the Traceability Final Rule also requires information to be provided to FDA within 24 hours, upon request.

Quickly pinpointing and removing affected product from the supply chain is essential to minimize negative impacts. Zeroing in to find and locate the exact products likely to be affected (by batch/lot number, for example) not only minimizes risk, but also helps reduce waste that would be caused by casting a wider net and removing more product from the supply chain than necessary.

GS1 US recently published a new guideline, "Application of GS1 System of Standards to Support FSMA 204,"⁴ explaining how all stakeholders in the food supply chain can leverage GS1 Standards to help address requirements of the Traceability Final Rule. It defines best practices for product and location identification, structured product descriptions, batch/lot codes, and the recording of key data elements (KDEs) for certain critical tracking events (CTEs) in the food supply chain.

Common Language of Standards

Many of the food industry's leading companies are promoting the adoption and implementation of GS1 Standards to enable automated information exchange between trading partners, thereby increasing supply chain visibility to facilitate faster and more efficient planning and response to unexpected impacts. At the same time, the ability to share product information across the supply chain is the key to improving traceability for a safer food supply.

GS1 Standards such as Global Trade Item Numbers (GTINs) and Global Location Numbers (GLNs) for identification of products and locations, respectively, are critical to this implementation. Many food industry stakeholders have already prioritized the use of these standards to enhance traceability programs and help minimize the need for costly food recalls. Electronic Product Code Information Services (EPCIS), a standard for providing event and transactional data about a product's journey, is becoming important for its ability to not only provide the status of an item (e.g., in transit, temperature, etc.), but also because it supports FDA's vision for electronically sharing event data like growing, receiving, transforming, creating, and shipping food products.

Combined, these standards provide a foundation for identifying, capturing, and sharing information about products; they can be used to support the recording of CTEs and KDEs, as well as Traceability Final Rule compliance.

Quality Data

This intricate web of continuous data sharing can help supply chains run more smoothly, plus deliver a tremendous load of additional benefits, from improved food safety and product recalls to happier customers, and much more.

However, a messy or incomplete collection of "dirty data"—i.e., improper syntax, duplicates, mismatched item numbers, outdated product identification, etc.—will throw off everything. A fully digitized supply chain tracking system can only deliver benefits when every organization's data is "clean," meaning it is up to date, accurate, and properly formatted for coherent inter-organizational communication. Every trading partner's ability to correctly and consistently identify products, locations, and supply chain events (shipping, receiving, etc.) relies on it.

Therefore, it is important for companies to prepare their data systems and update the master data contained therein. To this end, GS1 Standards can be used for product and location identification to ensure interoperability between organizations. This act of data management is a continuous process. Without accurate, up-to-date, standardized data, a variety of information can be misinterpreted.

That said, building the quality data and digital infrastructure to enable full traceability takes time and resources. All supply chain partners must coordinate and harmonize their data systems, and smaller organizations that are less technologically advanced or integrated may need extra help. Resources from GS1 US can support these digital transformation efforts.

Transparency

Trading partners need supply chain visibility and transparency to move products effectively and safely; however, transparency is also increasingly important to consumers. This group is seeking different types of information, such as specifics about the products they buy, use, and consume, especially when it comes to food. One survey revealed that nearly three in four consumers (74 percent) said that transparent communication has become more important after the COVID-19 pandemic.⁵

Consumer demand for transparency provides the opportunity for brands to find ways to communicate product attributes such as ingredients, production practices, sourcing, sustainability, country of origin, allergens, and more. Providing digital access to this information and making it easy for consumers to find is the way of the future. As with everything else in today's society, digital technology has irrevocably changed the relationship between brands and buyers.

Providing that instantaneous information access raises new data management issues. Labeling and marketing claims must be considered, of course, but the digital piece may be the heavier lift for some companies, especially those lagging behind in the digital revolution or in data management practices. All companies can benefit from the use of higher-tech data carriers that can accommodate deeper product information, combined with standards to ensure that the information can be readily conveyed and exchanged.

Advanced Data Carriers

The retail industry has been scanning barcodes for half a century as a means of digitally capturing price and item information at checkout. Today, a more advanced barcode is available that has virtually unlimited data capacity, and it can carry infinitely more information than the traditional, linear (UPC) barcode. This opens a new world of possibilities for brands to provide the transparency that consumers demand. Product information such as ingredients, nutritional information, batch/lot numbers, country or place of origin, and expiration dates can be encoded in a 2D barcode, such as a QR code, that leverages the GS1 Digital Link standard. This standard allows 2D barcodes to be web-enabled, providing connections to many types of business-to-business and business-to-consumer information. This is a game-changer for industry.

To unlock these benefits and provide true transparency and traceability, the retail industry has committed to becoming capable of implementing and scanning 2D barcodes at point of sale within the next four years, in a GS1 US-led initiative called Sunrise 2027.⁶

Additionally, radio-frequency identification (RFID) has come a long way in the past several years, to the point where it is now considered a viable option for tracking food products throughout the supply chain. The technology has advanced to enable longer read ranges and better accuracy than earlier iterations. Reader infrastructure has expanded, and the tags themselves are now available in a range of sizes and sensitivities, as well. At the same time, costs for tags have been decreasing, and global usage is projected to reach $18.45 billion USD in 2023.⁷

An RFID tag can be used in the same way as a barcode to carry unique product identification and serialized data. Automation enabled by RFID not only offers inventory visibility, but also supports critical supply chain processes including withdrawals, product safety holds, return logistics, and more.

A new guideline developed by the GS1 US foodservice workgroup has been published to help clarify how suppliers should encode GS1 Standards in RAIN RFID tags and to provide a roadmap for adoption. The new "GS1 US RFID Foodservice Implementation Guideline"⁸ provides case/carton requirements for foodservice suppliers to minimize disparate supplier tagging requirements. For food products and consumer-facing food packaging, the guideline specifies tag encoding, tag marking, and tag placement. It is designed to guide companies with implementing open, interoperable GS1 Standards to enable more efficient tracking, management, and traceability of products throughout the supply chain. Information is provided to help distributors learn how to integrate RFID technology within their systems to ensure compliance with new standards, and end users can benefit from understanding the available data and the access provided by this enhanced method of data capture.

Deadlines on the Horizon

Opportunities to deliver the next level of consumer engagement, improve backend operations, and ultimately help curb foodborne illness are here, now. With the looming Traceability Final Rule compliance deadline in January 2026 and Sunrise 2027 less than four years away, there is no better time to up your traceability and supply chain visibility game.

References

1. GS1 US. "What is Supply Chain Visibility?" 2023. https://www.gs1us.org/supply-chain/supply-chain-visibility.
2. U.S. Food and Drug Administration (FDA). "Additional Traceability Records for Certain Foods." Current as of June 26, 2023. https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-final-rule-requirements-additional-traceability-records-certain-foods.
3. FDA. "Food Traceability List." Current as of June 26, 2023. https://www.fda.gov/food/food-safety-modernization-act-fsma/food-traceability-list.
4. GS1 US. "Application of GS1 System of Standards to Support FSMA 204." March 1, 2023. https://www.gs1us.org/industries-and-insights/by-industry/foodservice/standards-in-use/food-safety.
5. Mohsin, Maryam. "10 Branding Statistics You Need to Know." Oberlo. April 7, 2023. https://www.oberlo.com/blog/branding-statistics.
6. GS1 US. "A New Dimension in Barcodes: Get Ready for Sunrise 2027." 2023. https://www.gs1us.org/industries-and-insights/by-topic/sunrise-2027.
7. Markets and Markets. "RFID Market Forecast to 2030." https://www.marketsandmarkets.com/Market-Reports/rfid-market-446.html.
8. GS1 US. " GS1 US RFID Foodservice Implementation Guideline." June 29, 2023. https://www.gs1us.org/industries-and-insights/by-industry/foodservice/implementation-resources-for-standards/encoding-attribute-data-in-epc-rfid.

Angela Fernandez is the Vice President of Community Engagement at GS1 US, where she is responsible for driving broader adoption of GS1 Standards to help industry achieve their goals for improved product traceability, product information transparency, and data quality. Since joining GS1 US more than 15 years ago, Angela has collaborated with a diverse range of industry stakeholders to identify how the use of GS1 Standards can improve supply chain business processes and e-commerce operations, as well as address regulatory requirements to deliver safe products to patients and consumers. Angela is a frequent guest speaker at industry events, including the Council of Supply Chain Management Professionals (CSCMP) Edge and the National Restaurant Association Show. Angela holds a B.S. degree in Business Administration from Drexel University.