Visibility in the food supply chain

Upstream and downstream traceability enables fast and targeted crisis response, while illuminating opportunities for efficiency improvement.

Recent food scares in America, Europe and Asia have demonstrated the potential dire consequences of contamination. Every year in the United States alone, 48 million people suffer food-borne illnesses, more than 100,000 are hospitalized and thousands die.

The ability to implement a quick, selective crisis response is absolutely critical to protecting the health of your consumers in the event of an accidental contamination. It is also vital to the survival of your company and your brand. As production and supply chain networks become more complex, cover greater distances and involve more suppliers, exposure to risk grows exponentially. 

Better upstream and downstream traceability enables companies to carry out smaller, more targeted recalls that limit public health risk and minimise the revenue and cost impacts of a crisis. The time required to identify the root cause of a contamination can be reduced from weeks to hours.

Implementing an effective visibility regime builds on supply chain optimisation and supply chain risk frameworks, with particular emphasis on inventory and transportation management. Investment in supply chain visibility will do more than reduce risk; it will deliver working capital efficiencies and illuminate cost reduction opportunities. Visibility enables companies to know at any given time where a product is in the supply chain. This enhances decision making agility for production and distribution decisions.

Food supply chain visibility will soon be a standard expectation for middle class consumers. A small (and growing) number of Chinese companies currently use smartphone apps to give retail customers visibility into the origin and transport history of individual food purchases. In the near future, there will be more free flow of information directly from growers and manufacturers to retailers and consumers.

The most recent draft version of China’s new national food safety law indicated implementation of a food tracking system will soon be a legal requirement.

Many companies, however, still have conspicuous visibility gaps in their food supply chains. The more agents that food passes through on its way to the consumer, the more information is lost. Vertical integration may reduce the number of entities involved in the process, but even among related parties, visibility requires robust controls and management systems.

The many links in the chain are unknown to the public. As recent scandals have demonstrated, the retail brand will bear the reputational and financial consequences for the transgressions of up-stream partners.

Contact us

Amy Cai

Amy Cai

Sustainability Managing Partner, PwC China

Tel: +[86] (21) 2323 3698

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