Promised supply chain traceability pilot projects may clearly define new answers and best practices for the Produce Traceability Initiative.

Yet Elliott Grant, founder and chief marketing officer for YottaMark, Redwood City, Calif., said he hopes the pending pilot projects don’t deter industry leaders from their own exploration of PTI.

“My worry is that if the pilot takes a year, we are going be sitting here this time next year and saying, ‘Let’s get started,” and suddenly only have six months left for full deployment of PTI,” he said.

Grant said 50 companies have adopted YottaMark’s HarvestMark traceability program so far and other companies are proceeding with PTI implementation.

The voluntary fresh produce initiative aims for complete supply chain electronic case-label traceability by the end of 2012. In a news conference in late May, PTI leaders at the Newark, Del.-based Produce Marketing Association, the Washington, D.C.-based United Fresh Produce Association and the Ottawa, Ontario-based Canadian Produce Marketing Association pushed back some deadlines, but re-affirmed the final 2012 deadline.

The groups also announced a new key step in the process, test-case pilot project that extend across the supply chain. A PTI working group will be appointed to oversee the pilot projects.

No projects have yet been targeted by PTI leaders, and a working group had not yet been named as of June 9, more than two weeks after the groups’ announcement.

“We don’t specifically know what (the pilot projects are, but generally we are interested in making sure that they involve the entire supply chain and help answer some of the industry’s most pressing questions about the PTI,” said Julia Stewart, director of public relations for PMA.

Grant said the PTI announcement in late May was pragmatic in the sense that some sectors of the industry missed earlier deadlines technical issues remain to be resolved.

However, he said was somewhat concerned that the message sent was to put all work on PTI on the backburner until the results of the pilots are in.

“In reality, for a complex seasonal shipper, it could easily take twelve months to get a program from start to completion,” Grant said.

In that case, there may be a race to meet the PTI timeline if the industry waits for results from the pilots, he said.

He also said the PTI announcement in late May didn’t properly acknowledge the work of leaders in the industry who have already implemented PTI-compliant systems.

“I would love to see PMA congratulate all those companies who did what (they) asked them to do,” Grant said.

Joel Nelsen, president of California Citrus Mutual, Exeter, said in an e-mail June 9 that clarification is needed on how to improve traceability for food safety purposes versus merely inventory management issues.

Reformulation of the PTI leadership and oversight of the pilot projects will be important to achieving solutions by the end of 2012, he said.

Scott Danner, chief operating officer at Liberty Fruit Co., Kansas City, Kan., expressed concerns about the initiative’s costs. He projects the total traceability cost across the food chain will add between 40 and 60 cents to each case of produce.

“Every time I talk to a customer they ask me how am I going to reduce their cost, not increase it,” he said.

So far, he said, no Liberty Fruit customers have mandated PTI.

Danner said designing a pilot project which includes the whole supply chain appears to be complicated because participation in labeling cases with PTI stickers is spotty.

“Right now, the only stuff coming in with PTI stickers is from Mexico,” said Danner.

He said if he did a pilot project he would have to sticker all the inbound cases of produce, something he said is not feasible considering Liberty Fruit handles 500,000 cases per month.
For his company, Danner said the cost would be in the range of $250,000, including software, scanners and refiguring the warehouse. That doesn’t include ongoing operational costs and labor expenses for scanning produce cases.

Grant said he believes retailers will probably do their own test cases and not necessarily wait on PTI-sanctioned pilots before deciding how to proceed.

“If a retailer wants to see if VoiceCode (HarvestMark’s free distribution center case selection technology) will work for them, they will figure it out,” he said.

The pilot projects will prove the concept of PTI, but customization will be needed for each individual retailer depending on their existing software and systems, he said.

Restaurant, wholesale buy-in?

Danner wonders how quickly buyers will invest in PTI.

“Is it really everybody’s belief that every restaurant in America will have a (scanner)?” he said.

In addition, Danner said he is unsure if restaurant chains are investing in software and procedures to implement PTI.

He said the issue of traceability is especially problematic at the terminal market level.

“What are you going to do with the jobber that buys a pallet of tomatoes and then goes back home and lays (product) out in their garage or sort through and then peddles it along?” he said. “You know how many billions of dollars a year are spent that way?”

PTI pilot projects spur questions from industry

Courtesy Yottamark

HarvestMark traceable labels from YottaMark, Redwood City, Calif., are used to track boxes of yellow squash. Leaders of the Produce Traceability Initiative in late May recommended pilot projects be conducted in all parts of the supply chain to help evaluate the initiative’s goals and milestones.