Managing a supply chain based on item codes (SKU numbers) assumes that the lot variable attributes (LVA) set is small and consistent. Many retailers are finding that the size of the LVA is larger and less consistent than expected. These retailers are addressing this fact by employing enhanced traceability systems that collect and manage LVA. They apply advanced automated validation routines to ensure that their products consistently meet their product requirements on a lot-by-lot basis.
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Explore This IssueOctober/November 2014
For example, knowing it is a “fresh wild Alaskan sockeye salmon fillet” is not enough. Retailers want to know where, how, and when it was caught, to determine whether it really is premium salmon that deserves $25 per pound price instead of the $15 other salmon fillets bring. Knowing when it was caught is also critical for estimating the remaining shelf life of this high-priced perishable product.
Bottom-Line Benefits for Retailers
Traditional traceability is viewed as only a cost used for record keeping, point-in-time auditing, and correcting problems after they happen. Enhanced traceability, with its powerful analytic tools, enables companies to monitor and analyze their seafood supply chains in near real-time to proactively prevent problems, reduce waste, and improve supply chain performance and product quality.
By reducing costs and delivering more consistent quality food, retailers are seeing a positive impact on their bottom line and consider enhanced traceability as a must-have for their seafood supply chains.
Reducing Seafood Shrink
Improving consistency of an inherently inconsistent product like seafood is one way that enhanced traceability can be used to reduce shrink. Often retailers may not really know when their fish left the water. One delivery of fresh fillets of fish might be four days old, while the next delivery of the same product is eight days old. With such variation in remaining shelf life, it becomes extremely difficult to avoid discarding good product while not selling bad fish to the consumer.
Retailers using enhanced traceability will be able to automatically monitor the age of fresh fillets they buy, and work with their vendor to only supply fillets that are either four or five days old. More consistent product will enable the retailer to better manage shelf life and reduce shrink.
Verifying Sustainability Programs
Retailers’ seafood sustainability programs typically make representations to customers about the seafood they sell. However, they struggle to guarantee these claims because they may lack supporting information or the data they do have is too voluminous to monitor and check manually.
For one retail client, Trace Register estimated they would have to manually check a stack of papers 16 stories high to verify their seafood sustainability claims. To manually check even a portion of this data would require many employee hours and cost hundreds of thousands of dollars. Retailers that do not authenticate such claims run a higher risk of misrepresenting the products they sell to customers..
Enhanced traceability enables retailers to capture and verify sustainability information for each seafood product as it arrives to measure its compliance with program requirements. Essentially, it enables retailers to check 16 stories worth of data automatically, without any extra labor. Specific feedback can then be provided to suppliers delivering non-compliant product about what they need to do in order to improve their performance.
Building Consumer Confidence
The Gulf of Mexico has suffered many recent disasters including a drought, Hurricane Katrina, and the BP oil spill. Because of this, U.S. consumers lost confidence in the seafood coming from the Gulf States.
To regain the confidence and trust of consumers, the Gulf States Marine Fisheries Commission launched the Gulf Seafood Trace Program. This program provides assurance to the consumer that the product was traceable back to the Gulf where it was harvested, and that the data was checked and verified. Trace Register provided the following three main components on the back-end to power this program.
- Electronic Traceability Platform—enables companies in the seafood supply chain to easily and efficiently link and share data and information about the seafood they buy and sell.
- Data Checking—provides assurance that shared data is valid and reliable.
- Marketing Module—enables seafood businesses to tell consumers a compelling and unique story about why their seafood is healthy and good to eat.
- The Gulf Seafood Trace program continues to be successful with program participants reporting increased sales.
Another example of a successful consumer campaign is the “Every Shrimp Has a Tale” campaign hosted by the Mississippi Hospitality and Restaurant Association. This consumer-engaging program targeted restaurants instead of retailers, and informed consumers where their shrimp originated—assuring consumers about the quality and safety of the seafood.