“What the traceability industry needs right now is a single traceability standard”.
This underlying theme was echoed in a number of presentations from several speakers at the recent Traceability Inter-Operability conference hosted by the Traceability Institute in Denver a few weeks ago. The main barrier to widespread traceability adoption by the food industry, these presentations argued, was the lack of a single traceability standard which could exchange traceability data seamlessly from one company to another throughout all their trading partners in a supply chain.
Unfortunately, each speaker was talking only about the traceability standard that their company commercially offers, and their implicit message was “If only everyone would speak my language, all companies in the food supply chain would be able to communicate and this industry would begin to rapidly grow.” In other words, the presenters wanted all of the other solution providers in the audience to abandon their traceability solution and jump on the presenter’s bandwagon–“my way or the highway”.
This argument and this conference took me back to the early 1980’s when I attended similar data interoperability conferences about how banks should be working together to begin electronically process credit cards. At that point in time, credit cards were handled manually rather than electronically. Many of you are old enough to remember the time when, at retail check-out, the store’s cashier would put your credit card in a flat-bed device, nicknamed a “click-clack” machine, then put a receipt form on top of the credit card, and finally slide the click-clack machine’s lever from one side to another, making an impression of the credit card and the merchant’s information on the two-part paper form. After signature, the top paper copy was given to the customer and the bottom, cardboard copy was retained by the merchant and processed by the banks the same way they processed their checks at some later date.
In the early 1980’s, the banks knew there were compelling reasons to process these transactions electronically in near real-time rather than wait many days to enter into their system, but they couldn’t agree how to process and exchange this information. So, they held a number of conferences where each solution provider or “wanna-be” central data switch presented the arguments about why their company should be the one and only company to provide this electronic data interchange service and why their data standard was the only one that would work.
Not only wasn’t a single standard adopted in the early 1980’s, but each time you use your credit card today, it is likely to route through many different networks, each with a different data standard, and still be able to provide an approval or decline in a matter of seconds. In fact, there are over 64,000 different data standards and hundreds of different networks in existence among the global banking industry but to almost all consumers it appears as a single system.
Flash forward to 2010 and the Traceability Inter-Operability conference. The messages at this recent conference were the same as those at the early banking conferences thirty years ago–“Adopt a single traceability provided by my company and everything will be perfect.”
From our perspective, this proposition is flawed on at least four levels. Firstly, there is the assumption that the lack of a clear interoperability standard is retarding the growth of traceability within the food industry. Secondly, this assertion assumes that a single standard will result in the best solution. Thirdly, there is assumption that a single traceability company will win all the chips. And fourthly, that full transparency of all traceability information equally shared with all trading partners is a good thing.
Based upon our experience in the global credit card industry, we believe each of these assumptions is false.
The growth of traceability companies is not being impeded by a lack of traceability interchange among companies because most companies haven’t even taken their internal traceability conversation to that level. They are only concerned about internal traceability within their four walls, and they think they have already solved this problem with their one-up supplier and their one-down customer so they don’t need the help of a third-party traceability supplier. Unfortunately, as we’ve discussed many times in this column, this belief is usually not anchored in reality and each time we’ve done a traceability audit with a food company, small or large, we’ve found glaring holes that would create serious problems for the company with the government regulators during a high profile recall. Even if most companies had flawless internal traceability, they don’t have traceability data inter-operability on their radar.
Will a single standard from a single solution vendor be the best solution? In our strong opinion no single standard will meet all of the needs of every member of a single supply chain much less all supply chains. In the early 1980’s we tried at my previous company, VeriFone, to push a single standard and got nowhere. Each bank wanted a different twist on the common theme and no single standard was going to work. The only way that we broke the logjam was to finally acknowledge that many solutions were going to need to bloom, each working within a loose, minimalistic standard.
The argument is likely to be made that the credit card example isn’t the best model for food traceability data interchange because technology has changed today. This argument, which I’ve heard for many years, actually argues against a single standard because with today’s technology it is so much easier for many different networks to bloom which can use modern middleware technology to inter-connect appearing as a seamless single network, but, in reality, being many interconnected networks.
So, if a single traceability standard promoted by a single company isn’t the answer, what is going to work?
First, there has to be a realization that no single company and no single standard is going to win all the chips. Just as with the credit card system, each company, each supply chain will have its own unique objectives for a system and these objectives will be different even though there will be at least one common objective–being able to provide at the appropriate time an e-Pedigree for ownership of all the ingredients in a product from the retailer all the way back through all upstream processors to the first mile producers of all raw products used in a specific finished good.
To accomplish this objective, there are only a few “standard” things that need to be accomplished:
- Agree on a numbering standard or a small set of numbering standards.
- Agree on the minimum data elements that must be included by all players to create the e-Pedigree ownership traceback.
- Agree how e-Pedigree data about upstream suppliers beyond one’s immediate supplier must be kept confidential until these data are needed during a high-profile recall.
Yes, these are standards, but they are very minimalistic and skinny standards, and are the skeleton upon which many traceability solution vendors can hang added value services, and distinguish themselves among other traceability solution providers.
When principles similar to these three were applied to the credit card industry in the early 1980’s, the electronic authorization and settlement of credit cards did begin to rapidly grow.
Let me conclude by strongly complimenting the newly formed Traceability Institute for organizing this important conference, and providing the forum for discussing this next important step. Providing education to food companies and providing unbiased leadership fo
r the several companies offe
ring traceability solutions is critical for our industry especially given that relatively few food companies have truly solved their internal traceability challenges much less begun to think about traceability data interchange with their trading partners.
As I noted during the conference, the true competitors at this point in time of companies offering traceability solutions are not the other companies offering traceability solutions, but the complacent food companies that think they have already solved the traceability issue only to find when they become involved in a high profile food recall that their systems fall far short of the mark, and their company is badly damaged or even destroyed. Working together through the Traceability Institute and other vehicles, traceability companies can be successful by identifying the minimalistic standards that will be needed for inter-operability, acknowledging they will not be the only winners, and then developing the specialized services that differentiate themselves from other service providers.
Further information can be found at www.tracegains.com.