Members from across all sectors and supply chains including retail, liquor, agriculture and construction, have come together from government and industry to navigate the way forward for enhanced traceability in Australia.
Woolworths is said to become the first Australian supermarket to trial data embedded (or 2D) barcodes in stores from August.
The trial has the potential to help reduce the millions of tonnes of food waste generated in Australia each year, and will eliminate the risk of customers purchasing expired products.
In collaboration with Woolworths, Hilton Foods and Ingham’s will start placing 2D barcodes on fresh meat and poultry products sold via Woolworths supermarkets nationally.
Woolworths general manager of business enablement Richard Plunkett said: “We’re proud to be the first Australian supermarket to invest in this technology, and hope it can help us further reduce food waste.
“2D barcodes have immense potential and we’re excited to see how they will improve food safety, traceability and stock management.”
For the past 45 years retailers have used 1D barcodes that identify the object. Unlike traditional barcodes, 2D barcodes contain information about the product’s batch, supplier, use-by date, and serial numbers at the point of sale. The barcodes store data in two dimensions, rather than in just a series of black and white bars and look like checkerboards or a series of traditional barcodes stacked atop one another
Currently the product recall process requires all recalled products to be removed from supermarket shelves and disposed of. The information supplied by 2D barcodes will allow retailers to pinpoint the specific batch affected and trace it back through the production line, making it easier to identify the source of contamination and avoid sending unaffected products to landfill.
The ability to add expiry and best before dates to a product’s barcode will also help eliminate any risk of retailers selling out of date products to customers by removing the need for team members to manually label products. When scanned at the point of sale, customers will be alerted that the product is past its expiry date and the system won’t allow the purchase.
Beyond food safety and food waste, data embedded barcodes have the potential to improve the traceability of the farm-to-fork journey in the future. Ingham’s has partnered with Woolworths to investigate the potential of the new barcodes on its products.
Ingham’s head of sales – Woolworths Ed Alexander said: “Ingham’s is proud to be a pioneer in the 2D barcode initiative with Woolworths.
“Food safety and traceability are paramount to our business. Delivering quality products that incorporate cutting edge technology to enhance these elements and provide a range of benefits to consumers is a step we gladly embrace.
“We’re very excited to be partnering with Woolworths in the initial roll out of this technology and look forward to seeing the real-time and long-term benefits it will bring.”
GS1, which develops and maintains global standards for business communication, has been assisting Woolworths with its trial.
CEO and executive director of GS1 Australia Maria Palazzolo said: “Four decades on from inception, barcode scanning technology in Australia continues to evolve.
“The fresh food sector relies on accurate and complete data to track a product’s journey all the way from the farm to the supermarket shelves. It’s great to see Woolworths leading the way in bringing 2D barcodes to shoppers at point-of-sale.”
Successful trials in Germany, the UK and Thailand have shown material benefits for both customers and suppliers.
A number of other suppliers across health and beauty, freezer and long-life categories have introduced 2D barcodes in anticipation of future barcode adoption.
Woolworths will work with industry bodies and suppliers to develop a phased roll-out plan to help ensure more suppliers can adopt the new printing technologies.
People often ask me: what is the secret to distribution centre (DC) design? I’m not sure that I have a secret to share, just logic, common sense, and experience (including a lot of mistakes on the way). However, I will share four design tenets that I’ve found useful and formed into the acronym FACT.
– is about ensuring that goods can be moved around the DC in an efficient manner. Easy? Not so!
For your facility to flow properly, there are six critical processes to cover:
- Inwards goods staging.
- Picking and packing.
- Outwards goods staging.
Depending on your business, there maybe two additional ones: returns and value-adding tasks.
Bottlenecks and double handling can occur at any one of these points, if flow has not been correctly addressed. How do you know if your flow is suspect? Symptoms include multiple handling of goods, waiting time, pedestrians mixing with forklifts, long travel distances to goods, and accidents.
In planning for optimal flow, it is useful to think ‘one way’, and to allow plenty of room for movement. Avoid giving in to the temptation of jamming storage into a building. If you do, you will more than likely suffer from excessive operating costs.
This is related to flow. It is critical that all products, in their various forms, e.g. pallets, UBC, cartons, units, litres, etc. are available when they are required. The rule here is: unfettered access to your stock. No blockages, hinderances or bottlenecks. Easy? Not so!
“Avoid giving in to the temptation of jamming storage into a building.”
Too often, operators find that the stock they need to pick is hidden behind banks of other items. Recently I was asked to review a timber yard that specialised in various sizes of timber beams. I noticed that all the same profiles were stored together, regardless of length (which were in 0.3m increments). So, when it came to picking two beams of 5.7m long for an order, the operator spent 42 minutes to complete the pick: 40 minutes to travel to the pick face, move all the other goods, and put them back, and only 2 minutes to pick the required two beams.
In terms of the pick to total time ratio, it is 2/40 or 5%. Only 5% when it should be 90%. In this operation, if we can improve accessibility of stock by providing more pick faces for the range of sizes, we have the potential to improve the ratio by 85%. That’s worth going for.
– is about providing enough space within storage modes, for current and future operations. Capacity is related to flow and accessibility – you might have guessed that by now. But here’s a mandate for you. Always provide for enough capacity to satisfy your storage and operational needs. Easy? Not so!
Consider an example that I came across recently. I was asked to review a DC that had outgrown its capacity, to the extent that stock was being stored in aisles and staging areas. This badly affected flow and accessibility. I was told that the DC had 10,000 pallets in capacity. To be sure, I checked, and counted all the locations. Yes, there was indeed 10,000 pallet storage locations!
But something disturbed me. This warehouse was in ‘gridlock’. They could barely operate, and moving pallets in and out required multiple movements. But there was something else: 250 pallets were stored in aisles and staging zones, and 9,000 saleable pallets were recorded as ‘in stock’.
My survey revealed a combination of storage modes, i.e. block stacking, drive-in racking and selective racking. Also, I noticed 150 pallets of returns, and 500 pallets of obsolete stock awaiting write-off by the accountant.
What is the capacity of this warehouse, and what would I advise my customer? Before I cover the maths, here a few truisms to consider:
- All storage modes have different utilisation factors.
- A warehouse cannot operate at gross capacity.
- Obsolete stock and returns take up valuable storage locations and detract from overall efficiency.
So, what is the capacity of this warehouse. My survey of the facility revealed:
- 1500 pallet spaces (gross) of block-stacking in 5 deep x 3 high configuration.
- 1000 pallets of drive-in racking in 3 pallets deep x 5 high configuration.
- 7,500 pallets of selective racking including ground-level pick faces in 5-high configuration.
Now for the maths. To determine capacity, we must consider utilisation factors associated with the use of specific storage modes. Then, we must discount gross capacity to net capacity – net capacity being the maximum that I would recommend to avoid gridlocked operations. Once we have done that, we deduct the non-saleable stock since these pallets are taking up valuable locations for saleable stock.
In this case, my customer has 1,525 more pallets in the facility than it can feasibly operate with. That’s what is causing gridlock, bad flow, lack of access, multiple handling and a capacity crisis.
What should be done to improve the situation?
Firstly, speak to the accountant and purge returns stock and obsolete stock as much as possible, redesign the facility considering alternative storage modes, and if necessary, move excess reserve stock off-site to an alternative facility.
Finally, never forget this truth: never, ever plan your warehouse operations on gross capacity. Only its net capacity.
Supposing we have flow, accessibility and capacity nailed. Our next focus is traceability. We must make sure that when stock is moved in, out and around the facility, that it is correctly traced. Easy? Not so!
“Logisticians, please do not forsake the physical, for expediency in recording electronic data.”
With volume increases, expanded ranges of SKU, batch management and use-by-date sequencing, stock management has progressively become more complex. To the point that without sophisticated management and recording systems, operators cannot guarantee accuracy of their operations.
Thus, it’s imperative that distribution centre operators invest in appropriate systems to trace and control stock.
These include radio frequency (RF) scanning equipment and/or voice and visual technologies.
Logistics processes will be different for each DC, but all processes should have a check and confirm transaction sequence tuned to the physical movement of goods. That brings me to the physical vs. electronic rule: physical processes have priority over electronic processes. In other words, design the electronic recording of stock movements to suit the physical process, not the other way around. Sadly, many systems are implemented by well-meaning, but often misguided IT people who do not understand physical logistics. Are you with me? Physical movement is where you burn your costs. Logisticians, please do not forsake the physical, for expediency in recording electronic data.
To recap, applying the FACT tenets, Flow, Accessibility, Capacity and Traceability, is useful to guide one’s thinking in reviewing, designing and running a DC. The outcome of good planning around each of these is reduced risk of gridlock, design flaws and excessive operating costs.
Mal is manager, consulting with the Logistics Bureau, where he works with local and international organisations to guide them in specification preparation, establishment and review of outsourcing contracts. He holds qualifications in engineering, business operations and logistics. For more information contact Mal on 0412 271 503 or email firstname.lastname@example.org.
GS1 has announced a collaboration with IBM and Microsoft to leverage GS1 standards in their enterprise blockchain applications for supply chain clients.
GS1’s global standards for identification and structured data enable blockchain network users to scale enterprise adoption and maintain a single, shared version of the truth about supply chain and logistics events — increasing data integrity and trust between parties, and reducing data duplication and reconciliation.
GS1 Australia’s executive director and chief executive officer Maria Palazzolo said: “Blockchain, like any other technology designed to exchange data across organisations, must be established on strong foundations. At its core, any supply chain implementation needs to be based on all involved parties agreeing on a common way to uniquely identify any item, location, shipment, consignment, asset or any other ‘thing’ to which blockchain transactions relate.
“Trading partners must also adhere to common data definitions to ensure all parties in the chain can correctly interpret, and integrate, the ‘meaning’ of data in the blockchain. This is what GS1 has been doing for over 40 years across the globe.”
Data stored or referenced by blockchain networks can be structured for shared communications and interoperability through the use of standards. For example, the GS1 and ISO open standards of Electronic Product Code Information Services (EPCIS) and Core Business Vocabulary (CBV) enable standardised exchange of data and item-level tracking.
Peter Carter from Data61 (CSIRO) said: “A blockchain is a generic technology platform. The data we store in the blockchain still needs to follow supply chain data standards, and integrate with existing systems that use those standards. We have already started research into the use of GS1 EPCIS standards on blockchain, and we are exploring how we can integrate smart sensors and packaging into the supply chain on blockchain.”
Global businesses use standards in the supply chain
GS1 standards offer global businesses like Walmart the ability to expand blockchain networks to suppliers, distributors and other ecosystem partners, unlocking the business value of data sharing, transparency, visibility and trust. IBM and Walmart have successfully used blockchain technology in a pilot test to enhance the traceability of two food commodities in two different countries: mangoes in the US and pork in China.
“Our pilot projects in the US and China demonstrated that blockchain can strengthen existing food system safeguards by improving traceability. Using blockchain, we were able to track a product from retail shelf back through every stage of the supply chain, right to the farm gate, in seconds instead of days or weeks,” said Frank Yiannas, vice president of food safety at Walmart. “Building blockchain traceability on a common set of standards can help us scale across our complex, global supply chain and build networks based on transparency and trust.”
“One of the key benefits to blockchain in the enterprise is the trust it delivers, which enables more efficient and complete sharing of the critical data that drives enterprise transactions. By removing the barriers that can be caused from disparate entry systems, that trust is solidified even further,” said Brigid McDermott, vice president, blockchain business development, IBM. “That’s why we are working with clients like Walmart and collaborating with other industry leaders to implement GS1 open standards into the work that we do.”
“Leveraging existing GS1 standards to structure event information will enable blockchain-based supply chain implementations to be more interoperable and will simplify the capture and description of events that are written against smart contracts,” said Yorke Rhodes III, global business strategist, Blockchain, Microsoft. “Collaborating with partners to implement solutions on blockchain using standards already in place for item-level tracking is the quickest path to production.”
New South Wales–headquartered global logistics software group, WiseTech Global has acquired two global rate management solution providers – Netherlands-based provider of global air freight rate management solutions, Cargoguide, and US-based provider of global ocean freight rate management solutions, CargoSphere.
Cargoguide services customers across 84 countries, including DHL, Expeditors, UPS, DSV, Geodis, Panalpina, Kuehne + Nagel, Schenker, Toll and Yusen. and many other leading global freight forwarders and logistics providers.
CargoSphere services more than 100 customers including Kuehne + Nagel, Dachser, NNR Global Logistics, M+R Spedag, Livingston International.
“At WiseTech we are focused on improving productivity, quality, speed, visibility and manageability in the logistics industry and we are delighted Cargoguide and CargoSphere are joining the WiseTech family,” said WiseTech Global CEO, Richard White. “Combining their powerful air and ocean freight rate management solutions with the strengths of the WiseTech Global group and our leading integrated global execution platform, CargoWise One, will be a step forward for the freight forwarding industry.
“Both solutions will enhance existing rate management capabilities within CargoWise One, increasing efficiency, accuracy and workflow for our customers worldwide, while our innovation strength and development capacity will further accelerate multi-modal rate management developments. This will ultimately create a pathway to the deeper automation necessary to substantially increase productivity for freight forwarders grappling with exponential increases in volumes and margin pressure.”
Australia Post is participating in an initiative with e-commerce company Alibaba and natural health company Blackmores to combat the rise of counterfeit food being sold across China, with PwC acting as an adviser to the project.
The initiative will target the traceability of food products, reducing the risk of fraud and ensuring Australia remains a trusted exporter of high quality food, said Bob Black, CEO, StarTrack, and Executive General Manager Parcels, Australia Post. The project would help guarantee genuine products arrive safely into the hands of Chinese consumers, he added.
“We are delighted Alibaba has invited us to create an innovative platform, which will track food from paddock to plate, strengthening the supply chain,” Black said.
“The initiative will leverage our secure, reliable and fast service to support the authentication of Australian products bound for the Chinese market. Our food producers have a global reputation as being a clean, green and safe provider of food and we are pleased to help deliver a solution to enhance the integrity of their produce.”
The project will explore new technologies, including blockchain technology, to obtain crucial details from suppliers about where and how their food was grown and map its journey along the supply chain. The technology also has the potential to enable up-to-date audits, increasing transparency between producers and consumers.
“Food fraud is known to be one of the biggest issues facing the global food industry, considering the potential health risks associated with adulteration and loss of trust from consumers and governments,” Australia Post said in a statement. “In recent years counterfeiters have targeted popular Australian products such as health supplements, beer and wine, honey and cherries.”
Austroads has released its findings from a review into end-to-end visibility in supply chains. The report, ‘Research Report AP-R538-17 – Investigating the potential benefits of enhanced end to end supply chain visibility’, was produced in collaboration with GS1 Australia, the Australian Logistics Council (ALC) Supply Chain Standards Working Group and the Institute for Supply Chain and Logistics.
The Australian Government welcomed the report, and Federal Minister for Infrastructure and Transport Darren Chester said the findings of Austroads’ report were in line with the Government’s commitment to develop a comprehensive national freight and supply chain strategy.
“Improving the ability of businesses to keep track of freight from the time an item leaves the farm or factory gate until it is delivered, is crucial to improving the operational efficiency of supply chains in Australia,” he said.
“To help make this a reality, we will be asking the independent inquiry into the establishment of the National Freight and Supply Chain Strategy to consider Austroads’ findings.”
During the course of preparing the report, several major pilot studies examined the effect of adoption of ‘visibility’ technologies using Global Data Standards (GDS) on the ability to track freight along a supply chain.
“Austroads’ pilot studies showed that larger transport businesses which have adopted GDS-based technologies effectively build a capability to create connectivity and improve visibility throughout their supply chains,” Chester said.
“This may increase costs over the short-term for smaller transport operators given the complexities of adopting the new GDS-based technologies, but those same operators will definitely see the benefits over the long term.”
The report was launched at the ALC Forum 2017 in Melbourne on Thursday 9 March to an audience of approximately 250 senior industry and government leaders, including ALC Managing Director, Michael Kilgariff, and GS1 Australia’s Senior Manager – Trade, Transport & Heavy Industry, Bonnie Ryan.
Participating in a panel discussion at the ALC Forum, Ryan said the report concludes an extensive body of work conducted by the ALC Supply Chain Standards Working Group and GS1 Australia.
“The industry pilots were across three logistic supply chains operated by Toll Group, Arrium OneSteel and Nestlé,” she shared. “The aim of the pilots was to continue the investigation of end-to-end supply chain visibility improvements on intermodal transport corridors using the comprehensive GS1 standards toolkit.
“GS1 standards enable information on freight, transport equipment and events along supply chains to be identified and shared among different parties and service providers. Based on the pilot findings using GS1 standards, the economic benefit to the Australian transport and logistics sector could exceed $1 billion.”
Kilgariff added, “This study shows that there are strong economic benefits where we can improve supply chain visibility. Industry should now work towards implementing greater supply chain visibility standards to the benefit of consumers.”
The research report can be found on Austroads’ website.
The recent 2015 frozen berries case is not the first food safety incident of its kind and it won’t be the last. According to the Australian Competition and Consumer Commission (ACCC) Product Safety Recalls Australia website there were 75 recalls of food and grocery items in 2014 alone.
The latest incident was preceded by other high profile cases including the Hepatitis A outbreak allegedly linked to semi-dried tomatoes in Australia in 2009, and the contamination scare that triggered a recall of Fonterra products that may have contained whey protein in a number of countries around the world, including China and Australia, in 2013.
Initial detection of the cause of a foodborne virus outbreak or food contamination is clearly an issue for the food regulators to review and address as part of the Food Standards Code.
According to FoodLegal, experts in Australian and international food law, “It appears that little has been done to improve the situation for preventing an outbreak of food-born Hepatitis A in foods in Australia in the period from the last major outbreak, which occurred in 2009, until the latest outbreak in 2015.” Source: “Hepatitis A and food testing: What lessons were learned by governments from last time?”, 10 March 2015.
These food safety incidents have also identified an inherent gap in the current traceability systems we have in the Australian food chain today.
To help prevent these food contamination outbreaks from reoccurring in the interests of public health and safety, we need to examine the learnings from these incidents and explore the opportunities for improving traceability and supply chain visibility.
Product visibility and traceability through the supply chain
Following the Government Inquiry into the Whey Protein Concentrate Contamination Incident involving Fonterra, The Dairy Traceability Working Group was established in New Zealand.
Recent reports released by the Dairy Traceability Working Group outline the most appropriate regulatory provision for the traceability of dairy products and the development of a code of practice to guide the dairy industry in implementing these requirements.
It is important to note that recommendations of the working group will also be considered for all food sectors, not just dairy.
The working Group’s proposed regulatory requirements include:
· End-to-end traceability from farm to consumer using the “one up, one down” system (tracing back where product has come from and tracking forward where product has gone), with particular reference to participants in the supply chain having access to Recallnet – the voluntary product recall online portal administered by GS1
· Future consideration of implementing EPCIS (EPC Information Services) – a GS1 standard that enables trading partners to share information about the physical movement and status of products as they travel through the supply chain from business to business and ultimately to the consumer. EPCIS is an international tool that enables seamless end-to-end traceability.
GS1 standards to protect the Australian food chain
To protect the security of the Australian food chain and the safety of consumers, the implementation of GS1 standards will allow for better visibility of product, up and down the supply chain at all times. By using GS1 standards, the recalled products will be able to be traced quickly and efficiently back to the source of origin.
Traceability is all about tracking any food through all stages of the supply chain from the source of raw materials, additives and other ingredients through to production, processing, packaging and distribution, including importation and retail.
Effective traceability enables food businesses to specifically target the product(s) affected by a food safety problem, thereby minimising disruption to trade and reducing potential public health risks.
GS1 standards exist today to encode data such as batch/lot numbers, use-by and best before dates and other product attributes at all levels of packaging from bulk materials to single produce items and finished goods.
Recall communication plan
Traceability is an important part of an organisation’s product recall management plan.
“Not having effective traceability processes can often lead to delays in actioning a product recall. This is one of the leading causes of incidents escalating into a crisis,” said Maria Palazzolo, Chief Executive Officer at GS1 Australia.
“The ability for a company to successfully track and trace their products through their supply chain and retrieve them from the marketplace is a key component to protecting the safety of the consumer and protecting the brand.”
The speed and effectiveness with which a recall is communicated to retailers and government authorities has implications for not only consumer safety, but a firm’s business reputation.
A detailed and well thought out recall communication plan is therefore an essential business tool for any company.
With GS1 Australia’s Recallnet, issuing a recall or withdrawal notification is simple, fast and inexpensive. Recallnet is a centralised online portal designed to streamline the management of product recall and withdrawal notifications. Distribution of a recall using Recallnet facilitates significant improvement in the speed of notification to stakeholders.
Based on global GS1 standards and best practices, Recallnet simplifies and automates the exchange of information between suppliers, distributors and retailers as well as government agencies such as FSANZ and the ACCC.
Implementing GS1 standards
Technologies including barcodes capable of encoding and capturing much more than a single product identifier through all points in a supply chain, allowing for greater product traceability have been in existence since 2005 but have not been adopted by industry.
Thirty-six years ago, Australian retailers adopted the GS1 System of barcoding and numbering as their preferred standard for trade.
GS1 Australia will coordinate a working group with industry support to discuss the adoption of traceability technologies to identify the costs and benefits to brand owners and the industry, and develop a road map for implementation.
“GS1 Australia has assisted Australian food and beverage businesses in improving their ability to track and trace their products up and down their supply chains by implementing GS1 standards,” added Mrs Palazzolo.
“We work towards helping industry create a seamless supply chain, allowing Australian companies to adopt world’s best practice supply chain management techniques.”
GS1 DataBar – The one little thing that will have a BIG impact
GS1 DataBar is a new family of barcodes that are an open, global standard, just like existing EAN/UPC barcodes. They have a huge potential to transform the way retailers do business as they carry more information than the current GS1 retail Point-of-Sale (POS) barcodes. They can be used on small, hard-to-mark consumer products and fresh produce, enabling a piece of fruit to be scanned instead of being looked up on the system.
In the instance of the recent frozen berries scare – if the finished product had been barcoded with a GS1 DataBar, the product recall could have been much more efficient as it would have provided greater visibility about which consumers had purchased the product and which retail outlet had a particular batch that may have been contaminated.
For fresh produce, GS1 Australia and GS1 New Zealand are currently working with the Produce Marketing Association Australia-New Zealand (PMA A-NZ) to develop a roadmap for the implementation of a more effective produce identification and traceability system, including GS1 DataBar, for produce sold as loose or in bulk.
Australian retailers began a process of upgrading their store scanning systems to accommodate GS1 DataBar in 2006. Unfortunately, other priorities have pushed ahead of implementing this capability across their networks.