“Using traceability in the supply chain to meet consumer safety expectations” Brussels
Agenda w Introduction – ECR Europe work: context and facts – Summary on content of the ECR Blue book w Manufacturer and Retailer positioning w Concrete examples of implementation of good practices – Kraft International Commercial – Cora w Example of collaboration between a w w manufacturer and a retailer Panel discussion and Question & Answers Conclusions
Introduction - Context and facts w Business requirements w Legal requirements: General Product Safety Directive and General Food Law w March 2003: ECR Europe Board launched a core team w w w under the initiative of ECR D-A-CH, France, Spain May 2003: Presentation of core team mission at the ECR Europe Conference in Berlin June 2003 - January 2004: Blue Book developed and validated 15 th January 2004: Blue Book officially endorsed by 21 ECR National Organisations End January 2004: Blue Book as ECR Europe publication Today: Breakout session at ECR Europe Conference in Brussels
Content of the Blue Book: main aspects addressed w Chapter 4: Business needs – – Ensure consumer safety and confidence Protect brands, companies, product categories and the entire industry life Limit the impacts of crisis by a joint efficient management Efficiency comes from collaboration and common practices w Chapter 5: Legal requirements – – Traceability and flow of information (as a tool to protect consumer safety) Product withdrawal and recall and therefore crisis management procedures w Chapter 6: Traceability & Technology: Process and w w solutions Chapter 7: Incident / crisis management, withdrawal and recall processes Key business rules along the Blue Book
As a manufacturer w Nestle supports Blue Book – Pragmatic approach to a European and even Global Process – Common framework and guidance to all companies – Promotes collaboration The Blue Book enables the “one step down, one step up” approach for all companies independently of their size
Carrefour and food safety vs EU w Food safety is non negociable, the precautionary principle must be applied where it is necessary for consumer safety and health w Traceability is a fundamental tool for food safety but it is also used to improve daily operational performances Carrefour supports legal obligation of results and pledges for a voluntary approach of liberty of means
Carrefour and traceability systems w Traceability must be seen in an evolutionary, voluntary context in partnership with every players involved, taking into account management and/or administrative and/or logistics and/or economics and public health objectives w Carrefour develops systems of products specifications management, of logistics management, of crisis management which have proved their global efficiency. SSCC and EAN-128 are pragmatic examples Carrefour supports Blue Book in a voluntary context in technological development, taking into account, according to food safety requirements, specific objectives of the different sectors of activities involved
Carrefour for its consumers with its business partners w Traceability applied today by Carrefour allows us to guarantee to our consumers fast and efficient quarantines, withdrawals and recalls w Carrefour develops with its business partners targeted quarantines, withdrawals and recalls taking into account public health (precautionary principle), business and economical criteria Carrefour guarantees first and foremost food safety for its consumers, then Carrefour takes into account the business context and partners economical concerns (contractual)
Coming Up w Case study manufacturer: – Kraft International Commercial w Case study retailer: – Cora
Kraft International Commercial Ronald Grube
Traceability and Technology: Process and Solution Practical case profile The object: Plant buffer whs. and Distribution Center in Disena Ü Storage equipment: conventional rack storage & block storage Ü Material type stored: FG, RM, Po. S Ü Capacity data: 10. 000 pallets available capacity Ü The mission: implement efficient traceability procedures that fit perfectly into our global supply network and sensitise the traceability aspect Ü The challenge: consider different technological levels at different sites Ü The tools: ECR Standard solutions based on EAN. UCC Standards
Traceability and Technology: Process and Solution Migration plan: The 8 important steps Test Run! ð EDI ð Labels ð Lot Codes implementation ðIdentification ðScorecard ðAssessment ðSCOPE analysis
Traceability and Technology: Process and Solution The scope: a question of interfaces. . . Co- Packers Co- Manufacturers Warehouse Trade Plants other Warehouse
Traceability and Technology: Process and Solution Assess a micro-cosmos: your warehouse! INBOUND STORAGE OUTBOUND RETURNS PICKING COPACKING For every flow: Unique identification Data communication Data capture Data link management EDI Infrastructure. . .
Traceability and Technology: Process and Solution Key learning: Scorecards are useful w Use scorecards to measure the degree of w implementation achieved and compliance Identify and document the steps required to implement a change programme and achieve best practice with the following possible impacts: – Organisational changes – Investment in technology
Traceability and Technology: Process and Solution Scorecard results: the “initial situation” w Traceability is based on manual procedures (e. g filing delivery notes) w We need: fast reliable answers to – What has been received and send out ? – From whom goods were received and to whom had they been delivered ? w To consider: risk of mistakes for initial situation is high and even increasing with a higher shipping volume
Traceability and Technology: Process and Solution Unique identification of locations and products w GLN identifies legal, functional and physical w w entities with a unique identifier and is key concept in EDI GTIN must be allocated to each product GTIN changing based on GCI allocation rules GLN GTIN for CU GTIN for SKU
Traceability and Technology: Process and Solution Implement the linkage of unique product identification with a lot code w A lot code is necessary at w any point in the supply chain A lot code should never be manipulated or changed Example of lot code structure I ID alphabetical I = Internal E = External P LINE D DATE S PLANT numerical alphabetical Packaging Line Number Production year Plant code . . .
Traceability and Technology: Process and Solution Logistics label: the serial shipping container code (SSCC) ECR Company Ltd. SSCC 3 76 10100 912 568 763 3 CONTENT w Any pallet needs to 5000243720517 carry an SSCC w Implement EAN. UCC Lot code pallet label to guarantee common design w Ensure product COUNT BEST BEFORE END (MM YYYY) MYAUI 235 03 2002 (02)05000243720517(15)020331(37)48(10)MYAUI 235 identification integrity SSCC 4 Premium Product 12 x 100 g Lot Code GTIN of SKU 48 LAYERS (00)376101009125687633 Uniform mono-lot pallet
Traceability and Technology: Process and Solution The edge: electronic data interchange Applicable EAN. UCC standards are EANCOM® and EAN. UCC XML messages EANCOM® Despatch advice EDI message is the enabler for efficient traceability Each physical movement of a product is linked to a transactional flow Message Pallet with SSCC scanned
Traceability and Technology: Process and Solution Test run (the “mock- recall”) Can your warehouse tell you exactly and on time for a randomly chosen product: - how much was delivered to the warehouse and when? - how much is still remaining in the warehouse? - how much and to which customer has it been dispatched? Example of a sequence diagramm visualising a test run
The figures: Ü Planning time: 4 months Ü Time needed to migrate: 6 months Ü Implementation core team: 4 – 6 FTE Ü Investment: 10 – 20 % of WMS project cost
Traceability and Technology: Process and Solution The efficiency of the traceability network is determined by its weakest link. Every single component of your supply chain must be in line with defined traceability processes and solutions - do not forget the „THE DEVIL IS IN THE DETAIL“
CORA Gérard Ferry
ECR France and Cora support the Blue book AUCHAN, BONGRAIN SA, Brasseries KRONENBOURG, CARREFOUR France, CASINO, COCA COLA, COGESAL MIKO, COLGATE PALMOLIVE, CORA, DANONE (EVIAN VOLVIC), DANONE Groupe, DECATHLON, DUCROS SA, EASYDIS, ELVIR, Fromageries BEL, GENCOD EAN France, GEORGIAPACIFIC France, Gilbert LEMELLE, KELLOGG'S Produits Alimentaires, KRAFT FOODS France, LACTALIS, LEVER FABERGE France, L'OREAL, METRO, NESTLE Produits Laitiers Frais SA, NESTLE WATERS France, PANZANI, PEPSICO France, PROCTER & GAMBLE, SOLINEST, SYSTEME U OUEST, UNILEVER BESTFOODS France, YOPLAIT. Coordination with the following French organisations: FCD, ANIA, Gencod EAN France, AFNOR, AFISE, CFA, CFCA, … and public agencies
Definitions (1) w Definition of an incident An incident is any situation, that might imply a real, presumed or perceived product safety or serious quality deviation from legal requirements and / or internal quality norms w Definition of a crisis It is any “incident situation” where there is reason to believe that a product distributed in the supply chain or placed on the market may be injurious to human or animal health and /or to environment protection, and / or have serious negative impact on the business organisation and / or image of the company
Definitions (2) w Withdrawal «shall mean any measure aimed at preventing the distribution, display and offer of a product dangerous to the consumer» w Recall «shall mean any measure aimed at achieving the return of a dangerous product that has already been supplied or made available to consumers by the producer or distributor» from Directive 2001/95/EC
Recommendations on organisation, documentation and training w Organisation to have in place to efficiently withdraw/recall a product – Defined responsibilities – Contact list (internal/external) – Documentation w w Internal documentation Personal skills Training Self assessment Procedures, roles and responsibilities are to be documented in prevention of an incident, not in reaction to an incident
Recommendations on responsibilities at each organisational level w Crisis management at company level is w w coordinated by a crisis management group This group is headed by one central crisis coordinator The crisis management group is the committee responsible for deciding and controlling the actions At the start of a crisis, the organisational requirements for dealing with incident management in the firm's organisational hierarchy must be in place
Recommendations on contact list (internal/external) w Contact list must always be complete and upto-date w The list must include – all contact options both during and outside office hours – substitutes in case one of the people responsible is not available w The list must be made available – at a suitable place (e. g. the firm's intranet, posters) – to enable access mainly outside office hours If the product in question has already left the firm's own organisation, the external partners involved must be contacted
Recommendations on ethical code w Four principles – Co-operation and co-ordinated action – Provision resources throughout the chain – Non-use of crisis situations as support to marketing actions – Communication w Apply the “golden rules” Companies are committed not to deliver communication to the media that refer to third party companies without having previously co-ordinated it
Is your company ready? Self assessment scorecard Incident /crisis management Requirements / actions Incident /crisis management team has been appointed with clear definition of roles and responsibilities Internal guide on incident/crisis management with clear definition of withdrawal & recall procedures, incident evaluation … has been fully documented 0: No action taken 1: Plans have been established but the work has to started Contact lists have been made availablenot key trading partners 2: Implementation has started with a limited scope (e. g. some product Each person involved in incident/crisis management, product withdrawal/recall procedurescategories) their role and scope of actions understands 3: Roll-out of full implementation has Training material has been developed started 4: regularly Training of people is performed Plans fully implemented Contact lists have been documented and distributed Regular exercises are run to test the crisis management team, incident and crisis management plans, checklists and to update the self assessment scorecard Regular exercises are run with key trading partners Score
Cora experiences w More than 250 alerts and withdrawals per year, around one per day w 2 to 5 recalls per year (food and non- food)
How to manage a crisis? Cora’s vision Avoiding Quality Preventing/ anticipating Traceability Contacts list Crisis team configuration
Preventing crisis w Four recommendations – – Implementation of a (cheap) phone number (ie n° azur) Updating names of the people to contact in case of crisis Permanence of email addresses and phone numbers Commitment to insure products quality and traceability Notification in the trade terms (selling and buying) of the companies
How to manage a crisis? Cora’s vision Avoiding Quality Preventing/ anticipating Traceability Contacts list Crisis team configuration Alert No Crisis Yes
Alert: crisis or incident? Is it a crisis or a false alert? Does the problem exist? Yes No Does the problem have consequences on consumer health or safety? No Does the problem affect high risk population? (child, elderly people…) No Is the product still useable (edible) (not destruct/eaten)? No Does the problem concern several family of products? No Yes Yes So it’s a crisis! Does the problem overstep an individual framework? No Yes Is the problem media covered or on the way to be? No Yes Does the problem have effects on the environment? No Yes Could the problem stop production/ distribution for a long moment? So it’s a false alert! Yes
How to manage a crisis? Cora’s vision Avoiding Quality Preventing/ anticipating Traceability Contacts list Crisis team configuration Alert No Crisis Managing Yes Withdrawal, recall, quarantine, Information flows, Communication, … Crisis settling
Managing crisis Withdrawal Recall Freezing (quarantine) «shall mean any temporary measure aimed at freezing the products shipment in the supply chain and not to deliver them to the consumer during an agreed time period. After analysis, the following choices can be taken : the product de-freezing (put back for sale) or its withdrawal » (ECR France proposal)
How to inform rapidly and effectively our partner?
Products flow «reverse logistics» Possible site of destruction Delivery Ascents of incriminated products Po. S by DSD
How to manage a crisis? Cora’s vision Quality Preventing/ anticipating Traceability Contacts list Crisis team configuration Alert No Crisis Managing Yes Withdrawal, recall, quarantine, Information flows, Communication, … Crisis settling Continuous improvement process Avoiding
Collaborative approach Cora and Nestlé
Experience in 2003 in France w Nestlé Quality Management detected a "plastic w foreign body" in a product already distributed to the Trade Crisis Team alerted – Assessment • • • What is it? Is it dangerous to consumers? (NO) Who received the product? Should we alert our Customers? (YES) Communication developed – Customers contacted • Not serious issue but Nestlé decision to withdraw the product • No need to remove the product from the shelves, only DCs • Product, Batch number, pallet numbers (SSCC), Distribution Centres
Experience in 2003 in France - 2 w Dialogue between Cora and Nestlé Teams – Better understand the issue – Further information sharing w Cora Internal assessment of the issue reported – Withdraw the product from the distribution centres only ? – Cora's usual way of dealing with incidents w Common Cora / Nestlé decision – Withdraw the product from distribution centres and shelves w Common agreement on: the event is now over w Archive
Experience in 2003 in France - 3 Key learning and recommendations w Even if minor issue, do not underestimate it and treat it as an incident w The experience shows: – Each retailers is different in terms of organisation and internal process – Need for regular discussions / meetings in order to understand each other ways of working and align as much as possible the approach – at least one meeting per year where information is shared: what's new? proposals for improvement, etc. – The absolute need for regular joint exercises – The absolute need to take stock of the way each issue / alert / incident was managed in order to improve Nothing really new: It is documented in the ECR Europe Blue Book
Panel discussions and Q & A Facilitated by Saliha BARLATEY
Key message and conclusion Saliha BARLATEY
ECR Europe Core Team's Key message w As a Project Team, we have done our very best w Help us to ensure the implementation of this European best practice: – In your own company – By your trading partners (co-manufacturers, co-packers, suppliers, third party logistics & solution providers…) This blue book has been developed for all of us, with one objective Business Excellence
Just contact. . . ECR Europe secretariat ecr@ecreurope. com ECR D-A-CH - CCG Ruediger HAGEDORN Email: ecr@ccg. de ECR France Olivier LABASSE Email: ecr. france@wanadoo. fr ECR Spain - AECOC Jordi MUR Email: info@aecoc. es
Many thanks to. . . w ECR Europe Core and Validation Teams w And to the 84 companies, which have contributed to the Blue Book
ECR Europe Traceability Core Team Saliha BARLATEY Philipp BOTZENHARDT Hugo BYRNES Géraldine FOUQUE Ronald GRUBE Ruediger HAGEDORN Ingemar HANSSON Olivier LABASSE Jürgen MATERN Miodrag MITIC Jordi MUR NESTLE Europe, Chairman ECR D-A-CH CIES ECR FRANCE KRAFT FOODS ECR D-A-CH ECR SWEDEN ECR FRANCE METRO EAN INTERNATIONAL AECOC, ECR Spain
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