While the United States often leads the world in business and technology innovation, it may be useful for American food retailers to consider some of the approaches taken by their counterparts across the pond.
In one area — using computers to calculate store orders — European retailers appear to have a vast advantage. Whereas only a handful of U.S. retailers have made a commitment to computer-assisted ordering, CAO is practically de rigueur in Europe. Some examples of how retailers such as Coop Switzerland and Groupe Casino are employing CAO can be found in the Technology Special Report that begins on Page 67.
Why is there this disparity? Some theories have been suggested: Stores in Europe are smaller and have less space for safety stock, so orders must be more accurate. Labor costs are higher in Europe, so automation is used whenever possible.
In the final analysis, however, it seems that U.S. retailers have as much reason to automate store ordering as Europeans. Retailers worldwide all need to keep inventory lean and in-stock levels high — goals that can be abetted by the proper application of CAO. Sources tell me that U.S. retailers are finally starting to pay more attention to this technology.
Another area where Europe has outpaced the U.S. is product traceability. The main reason cited for this is the serious outbreak of mad cow disease that hit England several years ago, forcing the European food industry to step up its traceability efforts. But again, the U.S. has hardly been immune to mad cow scares, as well as other food contamination incidents. Yet some experts believe, as reported last week in SN, that U.S. retailers are not sufficiently prepared to track down the source of tainted products.
The high degree of sophistication of European traceability methods was underscored last week when IdentiGEN, a Dublin, Ireland-based company that uses DNA technology to trace the source of beef back to the original cow, announced that Tesco will use this method in Ireland.
At a minimum, U.S. retailers are now required by the Bioterrorism Act of 2002 to be able to maintain records of a food's immediate previous source and immediate subsequent recipient, and produce them within 24 hours. But there remains some question as to the level of compliance among retailers to this basic requirement, and some experts believe it doesn't go far enough.
For example, the Bioterrorism Act does not require retailers to capture lot numbers, although this data, much more than UPC numbers, enable companies to focus on where and when a product was produced and who produced it.
Food retailers interested in bringing their traceability systems up to global standards can avail themselves of much free information on the Internet. For example, GS1 US, Lawrenceville, N.J., recently made available “Fulfilling Bioterrorism Requirements for Your Supply Chain,” and a second document on meeting the record-keeping requirements “Using Electronic Data Interchange Transactions.” The documents can be found at http://barcodes.gs1us.org/Solutions/BioterrorismTraceability/tabid/87/Default.aspx.
There is no reason for U.S. retailers to lag behind retailers in other countries when it comes to tracing products, or ordering them.