Global enterprises are encountering growing regulatory demands to enhance the traceability of their products. This push is twofold, driven by the imperative to safeguard consumer well-being and create more transparent, resilient supply chains.
While these drivers for change might be perceived as a necessary imposition, acting as a catalyst for the adoption of innovative solutions and processes to furnish additional data, that’s not always the case.
According to Lee Metters, Group Business Development Director at Domino Printing Sciences, achieving traceability and transparency often requires nothing more than a simple serialized code. This unassuming code serves as a crucial link connecting a product to its online data, provenance, and complete history. What’s more, organizations can leverage the data derived from serialization to accomplish more than mere compliance.
Spotlight on security
Over the past decade, there has been a noticeable rise in governmental and regulatory demands for increased and stricter data exchange to ensure the safety of patients and consumers. This is frequently achieved through the implementation of 2D codes and serialization, where individualized or variable codes are assigned to items, enabling unique identification, tracking, and tracing throughout their lifecycle.
Historically, regulatory serialization requirements have been confined to sectors such as pharmaceuticals, medical devices, and tobacco. However, the global push for greater transparency in supply chains has led to an expansion of these requirements into other industries, with a notable focus on the food and beverage sector. For instance, Russia’s Chestny ZNAK track and trace system, initially launched in 2017 for prescription and over-the-counter medicines, has been extended to include products like bottled water and milk. Additionally, there are expectations that the upcoming revision of the FDA’s Food Safety Modernization Act will mandate the serialization of specific food and beverage products in the United States.
Supply chain opportunity
Typically, adherence to compliance requirements imposes costs on brands without substantial commercial benefits. While the idea of new regulatory serialization mandates may appear challenging, the truth is that product serialization can bring significant advantages to brands. One such advantage is the ability to gain visibility into the movement of products throughout supply chains.
As observed in the pharmaceutical industry, the implementation of end-to-end traceability using scannable, serialized 2D codes offers brands the opportunity to enhance the efficiency of their supply chains and identify potential sources of waste. These advantages are equally applicable to the food and beverage sector, and in light of the growing emphasis on global food waste reduction, the potential for positive change is arguably more significant than ever.
Scanning variable codes at each stage of the supply chain, starting from the initial raw material supply to retail sales data, enables supply chain partners to access information about the origin and journey of each product. This heightened visibility creates opportunities to pinpoint issues and sources of waste at various stages in a product’s journey, providing valuable insights for running supply chains more efficiently.
Sharing data across supply chains also offers insights into regional supply and demand dynamics, allowing manufacturers to align production with both downstream and upstream requirements. The resulting improvements in supply chain efficiency contribute to waste reduction, elimination of inefficiencies, and empower brands to offer a diverse range of fresh food products with extended shelf life to consumers.
The push for transparency
The advantages of having detailed, comprehensive supply chain data go beyond the individual brand level, as there is a widespread acknowledgment that increased transparency in the food supply chain is crucial for sustainable growth and development.
Addressing this need, one of the 17 UN Sustainable Development Goals (UNSDG 12) emphasizes the importance of ensuring sustainable consumption and production patterns. This goal commits to reducing global food waste per capita by half at the retail and consumer levels and minimizing food losses throughout production and supply chains, including post-harvest losses, by the year 2030.
In the UK, the National Food Strategy, an independent government report, has proposed the establishment of a National Food System Data program. This program aims to collect and share data to enhance the nation’s health, well-being, and environmental sustainability. It advocates for the inclusion of data beyond the farm gate, encompassing information on food production, distribution, retail, and the associated environmental and health impacts.
Governments worldwide are exploring solutions to create comprehensive data audit trails for the supply chain of food products. In 2020, the US Department of Agriculture proposed the use of blockchain technology to trace the supply of organic food products. The Food and Drug Administration in the Chinese Chongqing Yuzhong District has conducted tests using blockchain to facilitate traceability and quality assurance in food and drug supply chains. China, known for its rapid adoption of blockchain solutions, is expected to release a national blockchain standard later in the year.
Furthermore, organizations like TagOne, WholeChain, and IBM are offering blockchain-enabled solutions for the food and beverage industry. These solutions aim to improve traceability with the overarching goals of reducing food waste, enhancing food freshness and safety, and increasing overall sustainability and supply chain efficiency.
Is blockchain the answer?
For many businesses, the concept and comprehension of blockchain may appear nebulous. However, every food and beverage manufacturer is acquainted with variable data labels and serialized codes—fundamental product codes that establish traceability and transparency by connecting physical products to the digital realm.
Taking the initial and straightforward step towards enhanced supply chain efficiency involves adopting variable 2D codes to facilitate data exchange. While serialized codes, unique to each product, offer the highest level of data, even batch-level identifiers can provide a certain level of transparency.
A further advancement involves implementing a background system that accumulates data at each stage of the supply chain, storing information for instant accessibility. A system enabled by blockchain technology could then furnish additional, immutable assurance of the accuracy of the information.
The variable 2D code functions as the crucial link, bridging a physical product to all its online data at each stage.
Through regulations, corporate ESG initiatives, and consumer demand, there is a global effort to enhance identification and expedite data sharing, offering significant advantages in supply chain efficiency. Some organizations can contribute to the backend with blockchain-enabled solutions or supply chain systems. For these solutions to be effective, a connection to the physical product is essential, necessitating manufacturers to ensure their systems are capable of establishing that link.
The encouraging news is that embracing serialization doesn’t have to be daunting. The foundational variable data coding technology is already in place, enabling traceability and authentication—a crucial bridge between manufacturers’ physical products and the online world, fostering genuinely sustainable food supply chains.
*Regulations encompass the EU Falsified Medicines Directive, initially adopted in 2011 to introduce standardized measures ensuring the safety of medicines in the European Union (EU) and proper control of medicine trade; the US federal Drug Supply Chain Security Act (DSCSA) enacted in 2013 for the identification and traceability of certain prescription drugs; and China’s National Drug Administration’s (CNDA) new serialization guidelines for pharmaceuticals.