Healthy returns

In an article published in May, I stated the case for Fresh Item Management (FIM) by emphasizing its positive potential and growing impact on food safety in the wake of lowered consumer confidence. It is easy to find statistics to support the importance of focusing on fresh food safety, such as the U.S. Food and Drug Administration’s estimates that foodborne diseases kill 5,000 people and cause illness in 76 million Americans every year.

While the bulk of foodborne diseases are the result of poor product handling by consumers, grocers must continue to focus on restoring the confidence of savvier shoppers keen on improving the wellness of their families by purchasing high-quality foods in trusted neighborhood grocery stores.

Although we all have a stake in ensuring food safety, there is a real danger that consumers’ food costs could rise disproportionally if there is overreaction to food safety without concern for the overall value to shoppers. Supporting consumer interest in food safety can be diametrically opposed to their need to lower grocery bills in a tough economy.

A further dilemma facing many retailers is the concern that current IT infrastructures cannot support advanced food safety initiatives without significant system upgrades or complete replacements—something they are reticent to invest in right now. Retailers are strongly opposed to overwhelming staff with new processes to better manage item inventory, particularly if this results in a net increase in labor costs. Their belief is that to increase control of in-store production they will have to scan every product or ingredient at every stage in the process as it goes from the manufacturer to the warehouse, store receiving and in-store preparation and ultimately to the point-of-sale.

This would not be practical nor help the grocer recover consumer confidence in the overall product offering. Any change that involves greater focus on operational details must not encumber the workflows that the grocers counts on to deliver products to consumers.

Therefore, it is a given that new approaches and new technologies are keys to circumventing the various challenges to implementing fresh item management.

One issue in the growing need for grocery increased food safety centers on traceability. Traceability is like running a relay or baton race. As long as you know each person handling the baton and you know to whom it was last handed, you know where it is at any given point in the race.  As the product is handed off from one production stage to the next, the change must be recorded and the net result of all the changes are then reflected in the actual inventory.

With respect to fresh food production in the store, FIM systems record the race from start to finish. Through accurate inventory management, FIM systems ensure a sensible balance between more precise and granular fresh item traceability, but at a price the grocer can afford and without requiring disruptive, wholesale replacement of the current systems infrastructure.

Tracing specific manufacturer lot numbers through the intervening systems touch points can provide a base traceability without having to install costly new perpetual inventory systems. This not only increases fresh food traceability but it provides incremental value in knowing what inventory is impacted during a recall. Instead of wholesale withdrawals of suspect products, intervention can now be focused on specific batches of products at specific stores.  This helps to avoid widespread fear and publicity and ensures that the costs of interception are specifically targeted at the real culprits.

Many grocers are already taking action. Supervalu has implemented some major improvements in its food safety efforts, including a wide-ranging food safety training program and investments in FIM technologies.  Similarly, Schnuck Markets has reviewed all of its food safety policies to determine if there are any other ways to prevent additional risk. As Dianna Pasley, director of food safety for Schnuck Markets and chair of the Food Marketing Institute’s Food Protection Committee, recently said: “We’ve increased our prevention focus tremendously,” adding that “traceability will continue to be challenging, but we’re ahead of the game in produce, thanks to the Produce Traceability Initiative.”

In my May article, I stated that retailers need to take a leadership position by supporting legislative improvements, while adopting systems that have been proven to deliver effective results and minimize liability risks.

I see these changes taking shape as retailers see the benefits of leveraging technologies to address the pressures for greater food safety, but without incurring the costs that they have traditionally associated with adoption. It’s time to get started. 
 
Desmond A. Martin is managing partner of The Actionable Intelligence Group, which was founded to help bridge the gap between user-oriented business intelligence tools, data warehousing and the management of business process change in the retail industry.