Fairbank Farms this month had to expand its recall of more than 500,000 pounds of its ground beef, on fears the meat contained E. coli bacteria.
The Ashville, N.Y., company expanded the recall when it learned the possibly contaminated meat had been shipped to more places than originally thought.
Product recalls, from possible lead paint in toys to car floor mats that can cause the accelerator to stick, are nothing new. But there are newer and better ways to eliminate, or at least limit, the damage.
New track-and-trace technologies have emerged to improve consumer safety and pinpoint 15urces of supply chain problems.
Such systems can track the contents of shipping containers and their locations, says Neil Smith, chief executive of Savi Networks, a unit of Lockheed Martin (NYSE:LMT - News) that makes track-and-trace systems.
"Shipment security is not quite the right term," Smith said. "It's more a type of shipment integrity assurance."
Savi Networks helps shippers track their goods in transit. The SaviTrak system uses electronic seals, wireless GPS satellite feeds and a Web browser. The seals are attached to a cargo container at the point 15f origin, so any tampering can be detected along the way.
Savi also attaches sensors to cargo containers to pick up any changes in temperature and humidity, or pick up any vibrations that might harm the contents.
"Once you are logged into a container, it creates an audit trail," Smith said. "By creating our heartbeat audit trail, we know whose custody the shipment has crossed, and where any problems have occurred."
Transmed Foods, a distributor for Crespo Foods, uses SaviTrak to track shipments of olives and olive oil coming into the U.S. from northern Africa. Transmed delivers olives to two of the world's largest pizza and sandwich franchise restaurant chains, which it said it couldn't identify.
Track-and-trace involves "the process of capturing the status of a product as it passes through any node" of a supply chain and the ability to identify its path, according to AMR Research.
New, widely accepted standards are needed to ensure the smooth exchange of data about shipments, it says. Better software integration will also be required to link track-and-trace systems, AMR says.
Most countries have public safety laws, including emerging nations such as China and Brazil. The Bioterrorism Act of 2002 requires U.S. food producers to make sure they can track problems in supply chains within four hours after an incident. A spokeswoman said Fairbank Farms follows all government regulations that apply to food processing plants, but the company declined further comment.
Businesses often depend on multiple global suppliers and subcontractors. This creates a complex supply chain, as more goods get transported among ships, railways, trucks and stores.
Hong Kong-based CDC Software (NasdaqGM:CDCS - News) sells two types of track-and-trace systems. CDC Factory is designed for on-the-floor factory workers, not tech managers. The software interface looks like an automatic teller machine.
CDC's other tracking product, Trace Express Viewer, captures supply chain data for process manufacturers. That includes food processors and life science firms.
One customer, Swiss cheese maker Berner Foods, can run an entire mock product recall with the Trace Express Viewer in just 45 minutes, says Alan MacLamroc, chief product and technology officer for CDC Software.
"At any point 14 the supply chain, a company can trace backward to where any ingredients came from, or forward to where any ingredients are used," he said.
Many tech companies are active in the emerging track-and-trace market. They range from IBM (NYSE:IBM - News) to small, privately held firms such as TraceGains and Food LogiQ.
Makers of foods, drugs and chemicals face high risks if they can't trace the flow of materials through their supply chains, says Jim Lawton, senior vice president of the supply management business for Dun & Bradstreet (NYSE:DNB - News). D&B advises clients on corporate credit risks.
"Companies need to devise strategies to meet the expectations of consumers and buyers," Lawton said. "They need new control mechanisms in an increasingly globalized world."
Part of the problem with product recalls is so many companies run leaner supply chains in order to save money, Lawton adds.
"We've taken out more costs, but that presents a challenge by making supply chains more fragile," he said. "Reduced inventory means you have less of a buffer in case of cataclysmic issues."
A type of software called predictive analytics can help vendors assess any financial issues and other risks among their suppliers.
"Financial information about how a company has paid its bills in the past allows you to predict what is likely to happen in the future," Lawton said. "People need any information that can give them some understanding of these issues to help them decide where to devote their scarce resources."
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