1. Food facilities are required to conduct a hazard analysis; implement preventive controls; and implement a food safety plan.
2. The Secretary of Health and Human Services is required to issue science-based performance standards to minimize the hazards from food borne contaminants; establish science-based standards for raw agricultural commodities; inspect facilities at a frequency determined pursuant to a risk-based schedule; establish a food tracing system; assess fees relating to food facility re-inspection and food recall; and establish a program for accreditation of laboratories that perform analytical testing of food for import or export.
3. The Secretary of Health and Human Services is also authorized to order an immediate cessation of distribution, or a recall, of food; establish an importer verification program; and quarantine food in any geographic area within the United States.

Just as bills such as Sarbanes-Oxley had seemingly innocuous provisions in the beginning, this bill, if passed by both houses of Congress, will have far-reaching implications within the processes and systems of any organization involved in the food service value chain. At a minimum, organizations should be able to demonstrate that their organization is equipped to run an effective recall program. This implies that organizations’ information systems should capture and maintain information about suppliers’ quality certifications, Certificates of Analysis, Certificates of origin,   lot numbers used by suppliers as well lot numbers of products from third party suppliers spanning picking and processing to the production of the final consumer product. This implies that companies that do not have these processes and systems in place are making themselves liable to serious damages if there is ever a food safety issue with any of their products. Thus, information should have adequate linkages back to the farm or original source of manufacture for all ingredients, enzymes, flavorings and packaging materials touching final consumer products.  It is imperative that this information is easily created and can be used to trace back to the potential source of contamination, and also trace forward to all locations where the contaminated ingredient could be available to the general public. In 2008, even in the absence of the current house bill, Peanut Corporation of America had to file for liquidation when it was discovered that its peanut processing plant was indeed responsible for the contamination that led to 691 people falling sick and, more irreversibly damaging, led to nine fatalities. Should the current proposed legislation become law, it will be inevitable that all companies involved in the food chain could and would be held responsible for damages. Indeed, companies that were users of this tainted product suffered significant brand erosion and financial losses as evidenced by the following statement:

“In January 2009, we became aware that the Peanut Corporation of America had supplied us with tainted product. We initiated a recall which we expect to impact the company around $0.12 per share.” — John Bryant, Chief Operating Officer and Financial Officer, Kelloggs Corporation.

Following is an overview of the entire farm-to-fork process and how it affects all organizations within the food service value chain. Figure 1, above, illustrates the farm-to-fork process, as well as some of the challenges associated with keeping traceability information across the multiple enterprises that touch the product. The initial food producers, be they farmers or ranchers, send their harvest to packers or processors. At this first point of packaging, it is critical that all item attributes and certifications of be accurate because the information will move along with the package from this point forward. Certifications of when and what fertilizers were used, organic certifications and other certifications should be assigned to each package and lot number associated with it. Quite often, this information is not matched properly with an item, package, and lot number. Furthermore, this problem is compounded when products from different farms or harvest lots are mixed or co-mingled.  When new items are created the “manufacturer” typically assigns a new lot number from the plant production, however, the ingredients’ historical origin information is often not maintained comprehensively. The product then typically moves to a set of wholesalers, distributors, and brokers. Someone in this chain of entities may rename or re-brand the product, which means that they in turn have to keep track of the original lot number and quality attributes. The product then moves to a retailer or food service provider who delivers the product. The final product is often sold in a serving that is comprised of multiple food items, or it is sold “as is” to a consumer who consumes it in combination with other items. When a contamination or serious illness breaks out, it is extremely difficult to identify the exact item or product that caused the problem. Issues could arise from a myriad of possibilities. Problems could be caused by suppliers, by the supplier’s supplier during the inbound process, or they could occur due to breakdown within the boundaries of an organization’s enterprise or could happen downstream in the consumer supply chain well after the product has been shipped off with all due diligence. It becomes almost impossible to identify the root cause of the problem unless comprehensive information systems and processes are in place. Most companies will react to this potential hazard by working harder within their enterprise. They will:

• Enhance their internal processes
• Create better Standard Operating Procedures (SOPs) and manuals
• Perform more audits
• Increase Testing

Although good first steps, these actions by themselves will not be sufficient to solve the problem.  Refer to figure 2 below.  It is important that an organization tracks information not only within itself, but also information external to the organizations’ boundaries.  In order to achieve complete supply chain traceability, all partners must achieve traceability individually as well as collectively. On October 14, 2008, the Produce Traceability Initiative (PTI) announced the release of the Produce Traceability Initiative Action Plan that outlines a roadmap to a common standard for external traceability. The plan involves adopting a GS1 standard system of case bar-coding for all produce sold in the United States and allows product to be tracked throughout the distribution chain.

• Milestone #1 – Obtain an unique GS1 issued company prefix for each “brand owner” – Q1 2009
• Milestone #2 – Assign 14 digit GTIN numbers to each unique configuration of case attributes and product inside the case  – Q1 2009
• Milestone #3 – Provide brand owner GTIN info to their Buyers – Q3 2009
• Milestone #4 – Human readable GTIN and Lot number information on each Case – Q3 2010
• Milestone #5 – Lot number and GTIN in a GS1-128 barcode on each case – Q3 2010
• Milestone #6 – Scan and store GTIN and Lot number from each inbound case received – Complete in 2011
• Milestone #7 – Scan and store GTIN and Lot number from each outbound case shipped – Complete in 2012

Organizations are now seeing industry portals from GS1, as well as FMI, that are working to create early warning systems. In doing so, they are rapidly becoming the authoritative source of information, identifying all past and ongoing recalls. Various industry organizations have tried to issue guidelines that predate the current legislation.  However there is widespread optimism that this bill, already passed by the House, will become law. Should this current legislation pass, CPG organizations should consider the key technology impacts of a contamination or food safety issue in order to protect themselves from major litigation or other losses, including:

1. The company should be able to accurately describe which specific ingredients are included in which specific finished goods – supplier compliance and monitoring
2. The company must understand the pedigree of who owns and handles the product after it leaves its control, and not just the pedigree of the product before it reaches their facility, i.e customer linkage and end-to-end SCM visibility
3. Food companies need to make sure their system truly associates specific inputs at the lot and farm level with the specific product outputs – complete lot level tracking and scanning at each stage of movement or transformation
4. All records of transactions needed for a recall process must be readily available in an electronic format and these must be immediately available to appropriate government agencies in the event of an investigation.

HCL Technologies recommends that every company should immediately undertake a traceability readiness assessment.  This will identify whether their processes, information, and systems are adequate to satisfy the government mandates. This can also be used to determine the risk and cost impact of a recall in various categories of products. The assessment exercise can help determine the second course of action. Typically, it would involve organizing a response team and correcting the processes and information flows to provide senior management relevant data needed to respond to a serious contamination or outbreak. Finally, HCL recommends that a solution be implemented and/or systems be amended to reflect the new requirements. If the first two phases are conducted appropriately, the final step will be relatively simple to execute. References: (1) Food Safety Enhancement Act of 2009 — (House of Representatives – July 30, 2009) (2)  Pape, William and Sankar, Ravi, “Food Safety and TraceabilityLegislation impact – HR2749 and NAIS – The Confusing Tale of Two Food Safety Policies” https://www.foodsafetynews.com/2009/09/technology-aids-traceability-protects-information/ (3) Produce Traceability Initiative Final Action Plan, 2008 Appendix HCL has come up with a five step approach for tackling the track and trace problem: HCL suggests that every company begin with a traceability readiness assessment. This identifies the gaps that exist between legislative requirements, company policy guidelines, and processes and systems dictated by supply chain, warehouse management, supplier management, and quality organizations. This can lead to HCL’s service value chain rationalization services MDM and SOA based integration practices that will alleviate these process gaps, as well as work to rectify the discontinuities in the information and systems. Throughout the final stages, organizations should work with customers to select the appropriate tools or enhance the investments made in ERP and other legacy systems to correct the gaps. HCL can offer its change management and continuous monitoring processes to ensure that processes and systems stay in synch to help ensure a quick and adequate response to any food safety issues.