Food traceability solutions for painless product recall management
As supply chains grow so does the risk and probability of facing product recalls. Using reliable and scalable food traceability solutions to maintain full visibility can help safeguard both the brand and consumers.
Food withdrawals, rejections, and recalls cost the food industry $7 billion annually.¹ According to the Grocery Manufacturers Association, the average direct costs of a recall start at $10 million, plus indirect costs such as brand damage and lost sales.² With the right food traceability solutions you can avoid or minimize these impacts, benefit from significant savings on recall execution costs and retain greater consumer loyalty with limited stress on customer relationships.
Varied causes and costs of recalls
Common causes of food contamination include noncompliance with quality standards, incorrect labelling and undisclosed information, lack of information on raw material sourcing, undeclared allergens, microbial, mislabelling, packaging faults, biotoxins and foreign matter. Recently, undeclared allergens have been the leading cause of food recalls under the FDA jurisdiction, at 43.5 per cent of all food recalls.³ A recall can be triggered by various situations including notification from a supplier of contamination of an ingredient lot or batch; results from regulatory or your own sampling and inspections; complaints from distributors, retailers or consumers; and real or threatened product tampering.
There are numerous logistical challenges and direct costs that result from a recall including:
Notifications to regulatory bodies, supply chain stakeholders, and consumers
The reverse logistics of tracing, returning, storing or destroying the defective products and the associated labour required for this
Third party expenses such as removing the defective product from the shelf and their concomitant loss of sales
Laboratory and investigation costs
Legal, public relations and other professional advice
Cleaning of contaminated premises and potential redesign along with the closure of the plant or production line
Indirect costs are also significant and often include lost sales to the company, potential litigation, fees, and lowered market value and brand reputation.
In a Harris Interactive poll, consumers indicated that 55 per cent of consumers would switch brands temporarily following a recall, 15 per cent would never purchase the recalled product again, and 21 per cent would avoid purchasing any brand made by the manufacturer of the recalled product.⁴
Mitigate risks and improve supply chain performance
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Minimize recall costs, time and effort
As an operator, distributor, manufacturer and/or producer, it’s near impossible to ensure you never experience product contamination, so the best course of action is to be certain your supply chain management tools are automated and streamlined with a straightforward process that’s ready to go in case of recalls, an average recall takes 14 days to identify and 34 days to enact, and due to the lapsed time typically only 40 per cent of the products can be collected.⁵ Poor recall management can be attributed to a few things including a lack of supply chain visibility, inefficient track and trace systems and inconsistently shared information.
Use the below as a guide to review your supply chain management system to ensure you have access to the information needed for efficient product traceability and successful product recall management.
How to successfully prepare for product recalls
To make a product visible through the supply chain, you need forward and backward traceability, as well as internal traceability (such as product design and raw materials origins) to find the root causes of the defect. External traceability (public data for the partners in the supply chain) is key to ensuring end-to-end traceability, location of items to recall and returns management.
This requires maintaining quality records, and an appropriate system or automation technology. Products need to be able to be traced to a lot or batch and to a specific ingredient or additive used, requiring batch codes. Records are required for ingredients, process control points and shipping, including the name of the shipper. This includes customer and supplier records and contact details, for both sales and receiving.
You need the ability to capture data across all supply chain checkpoints in real-time and be able to share it on a common platform that’s visible to all stakeholders in the supply chain. Automation technologies can be used to detect undeclared allergens, correct mislabeled products and ensure formulation/ingredient control at the outset, minimizing the likelihood of a recall.
This data can be automatically and securely stored from multiple sources to enable quick, easy and accurate tracing of contaminations and subsequent alerts to downstream vendors. This can include not only issues at the farm or processor, but problems related to storage at the warehouse or shipping such as truck temperature regulation. In some instances, this can prevent a recall from occurring if the issue is caught early enough in the chain.
Food traceability solutions for accurate, real-time supply chain visibility and traceability
Direct Store Delivery/Proof of Delivery
TELUS Direct Store Delivery (DSD/POD) provides you with the track and trace capabilities you need including:
Real-time visibility into the movement of products, enabling businesses to track products from the point of manufacture to the point of sale
The ability to accurately locate affected products and quickly remove them from the market
The ability to effectively monitor delivery and sales activities to assure compliance and security
A good order management system such as the TELUS Order Management System (OMS) software can provide enhanced scanning capabilities and route reconciliations that make external traceability easier. Users also benefit from:
Enhanced inventory visibility for insight into recalled products to prevent the sale or distribution of affected products and reduce the risk of harm to consumers
Efficient communication with customers, suppliers, and other stakeholders during a product recall
Automated process of sending notifications, updates, and real-time information to affected parties
Extensive product detail from GS1 data including allergens, ingredients, nutrients and images with TELUS DATUM that centralizes all your organization’s product attributes for a single version of the truth
The TELUS Warehouse Management System (WMS) software is the tool you need to successfully maximize staff productivity, manage inventory effectively, and comply with food safety regulations. This WMS system will give you the benefits of:
Lot traceability, including system-generated receiving lots and tracking attributes to the order product lot for food safety compliance like country of origin and harvest locations
Improved inventory turns and product visibility
Product Traceability Initiative (PTI) compliance, GS1-128 Global Trade Item Number (GTIN) compliance, as well as voice box codes for productivity as well as efficient traceability
All of the above food traceability solutions can help streamline your processes so you can efficiently manage a recall and comply with regulations by food manufacturers, distributors, or by government agencies to avoid regulatory penalties or a potential shutdown.
An automated and streamlined supply chain management systems that are purpose-built for the food and beverage industry, including direct store delivery systems, order management systems and warehouse management systems, can help you improve the traceability and visibility of your products to reduce recall likelihood, action time, cost and pain. Find out more by visiting our supply chain management solutions page.
1. https://www.crbgroup.com/insights/food-recall-guide 2. https://www.food-safety.com/articles/2542-recall-the-food-industrys-biggest-threat-to-profitability 3. https://www.foodsafetynews.com/2023/03/report-finds-enormous-increase-in-number-of-food-items-recalled-in- 4. https://www.food-safety.com/articles/2542-recall-the-food-industrys-biggest-threat-to-profitability 5. https://tracextech.com/blockchain-and-food-recall