Supply chain traceability and ASN for grocery, restaurants

by | Sep 6, 2017

In the fall of 2015, Chipotle began suffering a long-running and widespread embarrassment when hundreds of customers around the country contracted E. coli and salmonella at many of their restaurants.

Despite Chipotle’s “Food with Integrity” mission, the company ran into several problems when they weren’t easily able to trace all of their food and remove it from their supply chain. They were able to track down a salmonella contamination with a tomato supplier and switch immediately to another supplier, but didn’t have similar luck with the various E. coli incidents.

The issue was due in large part to a lack of traceability of Chipotle’s food supply chain. The very “Food with Integrity” initiative that sets the restaurant chain’s standards, requiring non-GMO ingredients and responsibly raised meat sources, resulted in a complex web of supply shipments all around the country from mostly smaller farmers. While Chipotle does require labeling of all of their food ingredients, not all of the farmers complied with the requirements, often due to a lack of funds and infrastructure to do so.

Responsibility and supply chain traceability

We’re seeing more generational influences and cultural shifts in food preferences, as well as governmental regulations, that require more supply chain traceability of produce, products and individual ingredients.

People want to know where their food comes from so they can make buying and dining decisions based on that information. Is it pesticide free, herbicide free, antibiotic free, cage free, GMO free, gluten free, and/or cruelty free? We want to know if it’s sustainable and responsible, whether it’s Rainforest Alliance Certified, what’s its country of origin, whether it was harvested with slave labor.

And consumers have a variety of reasons for wanting to know how their food got to their plates: dangerous allergies, health concerns, supporting favorite causes, boycotting companies that violate their beliefs.

Additionally, the Food and Drug Administration would like to trace the food supply chain, literally from farm to table. This is so they can track down quality issues, contaminants, counterfeiting, foodborne illnesses and so on. And with anti-slave labor legislations banning goods imported from forced labor, trade regulators would like to trace our food from overseas as well.

The grocery and restaurant link in the chain

Of course, restaurants and grocery stores can’t control every link in the chain, but they can control what comes into their store or kitchen and maintain thorough documentation. This is where electronic data interchange (EDI) and advanced shipping notifications (ASN) can be very helpful for supporting the ideal of an unbroken traceability chain of custody. Even with a smaller operation where documents are still managed by manual data entry, it’s still important to have this information if the products ever become part of a local, regional or even national recall of particular ingredients.

Grocery retailers and grocery suppliers will have a vested interest in being able to manage ASN, as it will be required by different suppliers and grocers in the future to accommodate supply chain traceability. ASNs can communicate a wealth of information that could prove important should contamination arise – manufacture dates and locations, lot numbers, expiration dates and more. At the very least, ASN information from grocery suppliers can give you an idea of when certain shipments and products will arrive at your warehouse dock.

Chipotle’s food problems did nothing to help its reputation or stock prices. Its share prices dropped from $750 in 2015 to $413 as of July 7. With another foodborne illness outbreak in the last few months, it’s down around the $300 range. If Chipotle had fully embraced traceability enforcement throughout its food supply chain, they might have been able to limit their damages to their brand. The grocery and restaurant industries can learn from Chipotle’s hard-earned lessons, and embrace traceability sooner rather than later.

If you would like to learn how EDI and ASN for grocers, grocery retailers, grocery suppliers, restaurants and restaurant suppliers support supply chain traceability, SPS Commerce can help. Please visit our website for more information on SPS solutions, to see a demonstration or to speak to one of our representatives.

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Operating in the grocery and food industry?

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Bekki Windsperger

Bekki Windsperger

Senior Customer Strategist at SPS Commerce
Bekki Windsperger is a Consumer Product Goods (CPG) industry expert with more than 30 years of experience in developing and supporting Business to Business (B2B) integration, with a focus on optimizing and automating Supply Chain and Item Management business processes. Before she came to SPS Commerce, she held positions at Supervalu, Pillsbury and Best Buy.In 2017, she was named as a Supply & Demand Chain Executive “Pro to Know.”
Bekki Windsperger

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