Last year Nestle Philippines undertook a voluntary nationwide recall of its Maggi Rich Mami instant noodles after the discovery of traces of salmonella in two batches of the product. This year, the Straits Times reported that food poisoning is on the rise in Singapore, with 37.5 percent of the cases happening in restaurants.
When an enterprise is forced to recall batches of its products, or a restaurant serves food that makes its patrons ill, the resulting consequences are plenty. Product recalls can be a long drawn-out and costly affair, particularly when a company does not have full visibility over its products.
For a global distributor, for example, it can take up to several months to trace the contaminated batch back to its particular supply source and then recall all the potentially affected batches from the same supplier.
In some cases, like salmonella or E coli contamination, delays in product recalls pose a serious health hazard by placing the well-being of consumers at risk.
This further leads to a damaged reputation for the affected enterprises and may subject them to disciplinary action from the relevant local authorities in a country. On the other hand, if enterprises mass recall all of their products, they incur a significantly high operational cost as a result.
Real-Time Asset TrackingTo avoid being caught in such a situation, enterprises today recognise the need for full, real-time visibility of their products as they move through the supply chain, from procurement to purchase.
One of the best ways to address the need for visibility in the supply chain is through the implementation of Internet of Things (IoT) technologies like RFID tagging, which offer a bevy of benefits including asset tracking capabilities, protection against losses and theft, improved maintenance operations, and streamlined efficiency through better asset availability and utilisation.
In a recent Forrester survey, commissioned by Zebra Technologies, ‘Building Value from Visibility: 2012 Enterprise Internet of Things Adoption Outlook’, 23 percent of the respondents surveyed from the manufacturing sector in Asia already have an IoT solution in place and 50 percent indicated their plans of implementing IoT solutions in the next 12 months.
The respondents indicated some of the key benefits of IoT solutions include improved customer service (86 percent), supply chain optimisation and responsiveness (79 percent), supply chain visibility (78 percent) and loss prevention (76 percent).
With IoT solutions, businesses can gain visibility into their operational events involving their assets, people, and transactions. Once they can see the events happening in their value chain—in real time—they can act upon them.
For example, if a delivery truck driver carrying perishable food learns in real time that the truck’s refrigeration fails, the distributor can reroute the truck, alert affected stores and reschedule deliveries.
Despite the equipment failure, the delivery company satisfies its grocery customers and the grocery stores assure no spoiled food hits their shelves. This improves food safety and traceability, issues vital to the food industry.
Gaining VisibilityIn the food industry, some of the main benefits of IoT solutions include:
1) Asset tracking
With asset tracking capabilities, not only will suppliers know where their products are in real time, they will also be able to know what condition their products are in.
It will enable enterprises to move their products, particularly the perishable types, through the supply chain quickly and efficiently, allowing them to reach supermarkets in time.
Moreover, RFID tagging can ensure accurate record keeping of assets and eliminate the hidden cost associated with searching for lost or misplaced products.
2) Targeted product recall
As mentioned above, when an enterprise does not have clear visibility over which batches of their products are contaminated, they will be forced to recall their entire line, resulting in high operational cost and loss of revenue.
With RFID tracking, companies can easily narrow down the affected batches, trace their sources, and do a lean, targeted product recall, resulting in minimum disruption, revenue loss and cost.
3) Increased productivity
RFID tagging ensures employees do not have to spend unnecessary time and effort in manually storing and retrieving records and data repeatedly.
With a one-time manual input, information related to a specific RFID tagged product can be computerised and easily available on request. This enables employees to focus more on tasks that generate value for their enterprises.
Real-time visibility in the supply chain remains imperative for companies wanting to prevent disruption to their business processes. While it might not always be feasible to avoid contamination leading to a product recall, IoT solutions allow enterprises to take the necessary proactive steps to minimise the impact of contaminations.
As a result, vendors offering innovative and reliable IoT solutions, such as RFID tagging and real-time location solutions are increasingly in demand as businesses start realising the benefits of having visibility over their supply chains and assets.
For example, in the aforementioned survey, eight in 10 IT decision makers from the manufacturing sector in Asia identify device manufacturers as their partners to help them realise the benefits of implementing IoT solutions.
IoT Solutions A RealityWegmans Food Markets became one of the first supermarket chains to implement a pilot RFID solution into their business processes to test if they are able to consistently deliver fresh, high quality food to their customers.
The company implemented RFID tagging at their Meat Manufacturing Centre and Meat Distribution Centre where large pieces of meat received from suppliers were cut and wrapped into retail-ready packages and sent to their respective destinations along the supply chain.
Using printer/encoder to produce more than 30,000 smart labels to apply on totes and pallets across the production facility, the company was successfully in keeping track of their individual meat packages, from the time of packing to delivery to their supermarket outlets.
By doing so, they were able to know exactly where their individual meat packages were at any given time and if any of the meat spoiled, they could easily recall it without incurring significant financial costs.
While this is one such example, it’s important to remember that like with any technology, enterprises should not adopt a one-tag-fits-all approach to tagging their products.
They must assess their needs and goals and understand how IoT solutions can help to improve their business before considering implementation. However, IoT solutions have reached a point in time where businesses can no longer ignore their importance in delivering business value.