Grzegorz Sokołowski

Management of traceability process in the food supply chain

Zarządzanie procesem traceability w łańcuchu dostaw produktów żywnościowych

Doctoral dissertation summary

Dissertation supervisor: prof. dr hab. Maciej Szymczak, prof. zw. UEP

Department of International Logistics

Poznań 2018

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1. Reasons for the choice of dissertation topic

Traceability is the ability to track and trace the flow of goods in supply chains and

networks, including the registration of parameters that identify these goods and all locations

relaed to this flow. Ensuring the safety of products delivered to the market involves registering

and collecting data on them at every stage of the supply chain, therefore at the level of each of

the enterprises participating in this chain. The most important legal requirements for supply

chains in the food and nutrition industry result from EU Regulation No. 178/2002. The essence

of traceability is the ability to tracking and tracing of the raw material or the product. In the

other words, the ability to identify or obtain all data about the raw material, processing steps it

has been subjected to until the finished product is obtained and vice versa, from the finished

product to the raw material.

One of the basic functions of traceability in the supply chain is to ensure effective

withdrawal of products from the market in the case of recall. The withdrawal of products from

markets has many causes, e.g.: inadequate product quality, bad labeling or a situation where the

product is dangerous to health and life. Consumers suffer from the withdrawal of products, but

it brings losses for companies. And it is not only about a one-off withdrawal campaign, but it

is related to the image and prestige of the company. In 2016. Poland has notified 27 notifications

within the RAPEX1 system and 135 notifications under the RASFF2 system. It is estimated that

the number of "silent withdrawals" from the market, without notifying RASFF, may concern

even several hundred products during the year. Withdrawing products in a timely manner also

reduces potential financial losses and preserves consumer confidence in the quality of their

favorite brands. Ensuring the safety of products delivered to the market involves registering and

collecting data on them at every stage of the supply chain, so at the level of each of the

companies involved in this chain.

Based on many years of research carried out by the author, and taking into consideration

the data on the growing number of notifications under the RASFF system, it can be concluded

that Polish producers and distributors of food products, accordance with the law have

1 The RAPEX system – the main and immediate purpose of the system is to ensure a rapid exchange of information

between Member States and the European Commission on hazardous products and measures taken in a given

country, to exclude or limit their introduction to the market, and possibly use. 2 The RASFF system – the European system of alerting about dangerous food products applicable in all European

Union countries.

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traceability systems that theoretically prevent crisis situations. However, while it can be stated

that they are operative, it is difficult to agree with the fact of their effectiveness.

When analyzing the effectiveness of traceability processes in enterprises, attention

should be paid to four basic areas and problems generated in this area:

data management

a problem with data link in IT systems,

the problem of the mixing of batches of raw materials or production components

in production and the lack of information about this in the flow of internal

information,

the problem of the lack of linking between the identification of the batch of the

raw material with the lot of the finished product,

identification

the problem of identification the content of heterogeneous logistic units,

the problem of using the bar code labels from suppliers of raw materials or

production components by producers,

automation

the problem of manual data collection,

the lack of the possibility of automatic control of inventory levels, which are

required in crisis situations,

sharing data

the problem of the lack of effective communication with business partners, e.g.

in a crisis situation,

the problem of inaccessibility of all attributes required in situations of

withdrawal of a given production lot from the market.

2. Dissertation objectives and research hypotheses

The above-mentioned issues directly refer to the main research problems identified by

the author of this dissertation, which are:

1) difficulty in determining what has an impact on the traceability efficiency in the

supply chain in the context of key enablers of the flow of information process

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2) the lack of a homogeneous reference model for enterprises in the supply chain

of food products taking into account the application of the same traceability

standards (throughout the supply chain).

Considering the traceability issues, it can be assumed that it is a part of the discipline of

management sciences, and more specifically in the area of supply chain management or

logistics. Regardless of the variety of approaches and interpretations (Rutkowski, 2004) of the

term, it is undeniable that key issue to supply chain management is always the management of

the flow of goods and information related to these goods. This is a key element from the

traceability point of view

The main goal of this work is to develop and study the effectiveness of reference models

for the traceability process in food supply chain enterprises. Whereas the following specific

objectives should be mentioned:

analysis and definition of critical traceability events and key data elements in food

supply chain enterprises,

development of reference models for traceability: lot - based and event - based

traceability for food supply chain enterprises,

estimating the effectiveness of traceability processes in enterprises in the supply

chain of food products based on index analysis.

Guided by the problems and established goals of the dissertation, the author defined the

following research hypotheses:

[H1] the use of universal identification and communication standards in the

food supply chain influences the increase of traceability effectiveness in each

enterprise in this chain,

[H2] the use of automatic identification techniques and communication tools

(electronic messages or services registering events in the supply chain)

contributes to the increase of the effectiveness of traceability proces.

3. Research methods

In order to verify the hypotheses, the author's original research methodology was used,

mainly based on the processes analysis, as well as the estimation and simulation of changes in

the traceability process as a result of use reference models. This methodology is based on the

following steps:

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1) operational analysis including the following elements:

conducting an interview in the area of the process, which is examined with

the persons responsible for the given proces,

identification of the traceability and recall processes in 3 entities of the food

supply chain,

mapping of identified processes with the iGrafx® tool based on the BPMN

2.0 standard described in the ISO / IEC 19510 (International Organization for

Standardization [ISO] 2013).

2) parameterization – determination of Key Performance Indicators (KPIs) for

current and reference traceability models: lot - based and event - based

traceability,

3) defining places of potential process changes through the analysis of Critical

Traceability Events (CTE) and Key Data Elements (KDE) in the process area

and the use of identification and communication standards,

4) development of current operating models (AS IS analytical models: traceability

and recall) and target models TO BE – after implementing changes resulting

from the application of the reference models (lot - based and event - based

traceability) for:

each of the actors of the supply chain,

the whole supply chain,

5) verification of the model through a simulation experiment using the AS IS and

TO BE models: lot - based and event - based traceability for 3 surveyed entities,

using the iGrafx® tool based on the BPMN standard,

6) synthesis and preparation of research results.

The selection of indicators that served the parameterization of process models was

dictated by the need to obtain results that enable checking the hypothesis of this dissertation,

which concerns the impact of the application of identification and communication standards in

achieving greater efficiency of the traceability proces.

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4. Dissertation structure

The structure of the dissertation includes five chapters, however, it should be noted that

Chapter 5 summarizes the considerations contained in the preceding chapters by analytical and

synthetic presentation of the traceability research results.

The subject of the author's interest in the first chapter of this work is the supply chain,

and what is connected with managing this chain. In this area, there are a number of literature

items that quite accurately describe the rules, requirements, and explain the definition etc.

However, the problem arises when a particular area of management should be examined,

namely the traceability management or traceability. In the following subsections, the author

attempts to place traceability in the sciences about supply chain management. In addition, it

presents what are the legal and normative requirements regarding traceability in Poland for

enterprises involved in the production and disytibution of food. In the final part of this chapter,

key elements of the correct implementation of traceability in enterprises are indicated

The second chapter presents the basic functions related to traceability in the food

supply chain enterprise. It describes what functions should be performed internally and which

should be performed by external traceability in the company. In addition, traceability examples

are described in two supply chains: meat and fish. The last part of the chapter describes the

method of implementation of traceability supported by the use of global identification and

communication standards as well as tools facilitating communication throughout the supply

chain.

The third chapter is primarily the development of two reference models of traceability

processes: lot-based and event-based traceability. This chapter shows and describes the path to

the final model form:

problem identification,

modeling aim,

assumptions,

the model form,

tools for describing and parameterizing the model,

model verification.

Based on the developed models and using the assumptions related to the applied identification

and communication standards, conducted research reflected in Chapter 5.

In the fourth chapter, the author focused on characterizing the research methodology

used in the research, which results are described in the following chapter. The research method

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used in this doctoral dissertation represents a group of quantitative methods, that is, those that

provide answers to questions about how much, how often, in what proportion, what size, etc.,

the occurence or processes to be examined. The research method applied during the

implementation of the work is based on inductive reasoning, that is, acting in accordance with

the principle: from general to specific. The fourth chapter describes the research tools used in

the study, scope and method of testing

The last, fifth chapter of the dissertation is presenting the results of research based on

process analysis, carried out by the author in three food supply chain companies in 2014-2016.

According to the methodology described in Chapter 4, research results focus on showing

differences resulting from changes in analyzed processes. These changes result from the use of

lot-based and event-based traceability models. The research results are primarily the values of

Key Performance Indicators (KPIs) and Critical Traceability Events (CTE) and Key Data

Elements (KDE) analysis separated within each of the analyzed processes.

Final conclusions that synthetically summarize the results of the research presented in

the fifth chapter are presented in the Ending

The literature used in this work is a collection of items in the field of science on

management, in particular, supply chain management and process management. In addition, the

author used a number of articles and reports relating to the food industry and issues related to

the safety of products on the market. The last group of sources used in this dissertation are legal

acts, specifications of global and industry standards used in the supply chain of food products.

5. Research results, final conclusions and directions for further research

Considering all the results of the process research for both individual companies and the

entire supply chain, the most important applications from the point of view of the present study

are as follows:

in the area of CTE and KDE:

a unified data collection in the lot-based and event-based traceability models

is as follows:

SSCC of logistics unit

GTIN of product/grouping package

lot numer of product/raw material

GLN of receiver/supplier

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standard messages required for the implementation of the lot-based

traceability model are the following:

DESADV

RECADV

PRN

PRC

event registration in the event-based traceability model takes place taking into

account the following events:

object event

transformation event

aggregation event.

in the area of KPI:

producer – the highest efficiency will be obtained in lot-based and event-

based traceability models in relation to the receipt and delivery activities in

the traceability process:

percentage commitment of process resources – reduction by

36.62% in relation to the AS IS model

distributor – the highest efficiency will be obtained in lot-based and event-

based traceability models in relation to the receipt and delivery processes

average process execution time – a reduction by 78.90%

compared to the AS IS model

percentage commitment of process resources – reduction by

93,68% in relation to the AS IS model (it concerns the business

role – office)

retailer – the highest efficiency will be obtained in lot-based and event-based

traceability models in relation to the receipt proces:

average total work time in the process - reduction by 48.44%

this applies to all entities in the supply chain:

KPI values for lot-based and event-based traceability models are

identical; however, in the context of the flow of information with

many business partners, the greater potential for optimization is

demonstrated by the event-based traceability model, which

results from the nature of the operation of this type of data

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exchange, the relation: one to many / many to one; registration of

events and changes in the status of tracked production batches

can be available immediately, and there is no need to create

dedicated messages in one-to-one relationships, as in the case of

EDI. In addition, EPCIS used in the event-based traceability

model can be used to record internal process events without

sharing these data with business partners.

in the area of recall:

by applying unified identification and communication standards, it is possible

to more effectively handle with recall proces,

lot-based and event-based traceability models allow very fast control of the

traceability of the product history (eg. what, when and from whom were

receipted, and what, when and to whom was delivered in the context of a

tracked product / production batch); this can be useful additionally, for

example for reporting, controlling and marketing purposes.

The results obtained during the survey and after simulation of process models of

traceability confirm the first hypothesis [H1] that the application of universal identification

and communication standards in the food supply chain influences the increase of

traceability in the enterprises of this chain. The consequence of implementing reference

models confirming the validity of this hypothesis will be:

increasing the transparency and safety of the supply chain of food products by

applying uniform standards by all participants in the supply chain,

increasing the level of credibility and correctness of data through the use of universal

and uniform standards in activities related to the protection against the distribution

of products withdrawn in the producer's warehouse, distributor and the back of the

retail store.

Another hypothesis [H2], presenting the view that the use of automatic identification

techniques and communication tools (electronic messages or service registering events in

the supply chain) contributes to increasing the efficiency of the traceability process has

also been proven as part of analytical and research work in this dissertation. In this case, the

consequence of implementing reference models confirming the validity of the hypothesis will

be:

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reduction of labor consumption in the traceability process, in particular in areas:

reduction of the time of some activities (mainly: receipt, completion for

delivery)

eliminating duplicate activities

standardization of the form of generated electronic documents.

Developed and verified simulated models can be support for food supply chain

companies that aim to implement or modernize traceability processes. The entire traceability

area in enterprises, often is treated as an element of the quality assurance system or product

safety system. This dissertation proves that traceability should always be considered from the

perspective of many processes that are implemented in the company. It results from the essence

of traceability – it is an immanent feature of process management in the company and whenever

the processes concern goods and the flow of information about tchem – companies should

remember about this traceability feature. In the other words, when the issues of identifying

goods in the supply chain of food products and information flows or sharing information about

these goods are taken into consideration, it is necessary to have an appropriate traceability

model in the company.

The supply chain management, in accordance with the definitions cited in this paper

(Griffin, 1996), is primarily the integration of business processes inside and outside of the

enterprises on which the quality of delivered products depends. In the context of process

management, usually we deal with many processes. One of them is the traceability process

permeating the internal and external processes of the supply chain entities. Process management

is an indispensable mechanism that enables optimal and efficient process execution within

a given company as well as the entire supply chain (Jarzębowski, 2012). The influence of the

developed reference models on the analysed processes proves how important it is within the

framework of process management of the company to take into account the conditions related

to the collection and processing of data regarding traceability.

Keeping in mind the results of the research and the information collected during the

analytical work, it can be stated that the key issue for traceability are data, namely their

collection, processing and sharing in the supply chain. The traceability system can of course be

operate manually without IT support. However, the efficiency of such a system will be low.

Therefore, big companies decided to implement or expand existing IT systems in their

organizations in the direction of support or modernization traceability processes. The list of key

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requirements for IT systems supporting the traceability functionality in the presented

reference models is mainly:

identification and correct interpretation of GS1 identifiers,

implementation of automated receipt, completion and delivery of goods,

generating labels that comply with GS1 standards,

generating EDI messages that comply with GS1 standards (GS1XML or EANCOM),

record of relations in the system: GTIN number, lot of raw material and ID of internal

location ID,

record of relations in the system: GTIN number, lot of product and ID of internal

location ID,

record of relations in the system: SSCC numer and other attributes of logistics unit

(lot number, expiration date, etc.),

record of relations in the system: receipt id, supplier and supply content,

record of relations in the system: delivery id, recipient and delivery content,

the ability to generate traceability reports in different variants of the data relationship,

in the case of event-based traceability: record of process events in the EPCIS

database,

in the case when IT system operates in an environment that requires data exchange

between other IT systems – the need for interoperability in data sharing between

systems,

backup data in the database.

In addition to the conclusions and system requirements, the following is a summary of

several problem areas that may be the direction of further research conducted to achieve even

better results relating to the effectiveness of traceability processes:

1) The problem of determining the size level of a production batch - a sufficient record

of relationships in traceability systems is the identification to the batch level of the

product / raw material; however, the problem and area for further research is what

the size of the party should be determined. There are many methods for determining

the size of a production batch, e.g. static, periodic, optimal procedures, however

none of them takes into account the ratio of the cost of withdrawal to the size of the

production batch, i.e. determining the optimal batch size of traceability.

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2) The problem of determining the area of data relativity – what data should be linked

within the traceability system is known to companies in the supply chain of food

products and results from legal requirements and standards; however, what data will

be finally included in the traceability data collection depends primarily on the of the

processes flow within the enterprise and its business role in the supply chain (raw

material supplier, manufacturer, distributor, retailer, logistics operator). While for

most companies performing the same role in the supply chain, the traceability data

collection is similar, but the efficiency of exchanging these data depends on the

diversity of the processes in these companies.

3) Simulation study of recall in the supply chain – testing the traceability process in

enterprises indicated potential improvement points and showed measurable benefits

from the implementation of lot-based and event-based traceability models; however,

there is still an area that, due to the sensitivity of the company's data, do not share

and are probably not aware of what such research could bring to them. The

parameterization of the recall area and research this process in the context of the

application of the developed models could provide important data for the estimation

of crisis situations.

4) Simulation study of benefits along the entire supply chain – same as in point 3,

enterprises in the entire supply chain of food products could use reference models

to examine process efficiency in the context of the whole chain; unfortunately, this

is complicated from the business point of view, because showing, for example, the

marginal benefits of the implementation of the lot-based traceability model at the

manufacturer and significant benefits from the implementation of the same model

at the distributor is not tantamount to making a decision on sharing costs between

these two partners. However, in closed supply chains such as: a retailer with a

defined number of suppliers, it is worth conducting such a study, although probably

the decision will be made on the side of the entity having a stronger market position.

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Bibliography

Griffin, R.W. (1996). Podstawy zarządzania organizacjami. Warszawa: Wydawnictwo

Naukowe PWN.

International Organization for Standardization. (2013). Information technology – Object

Management Group Business Process Model and Notation (ISO/IEC 19510:2013). Pobrane

z https://www.iso.org/standard/62652.html

Jarzębowski, S. (2012). Zarządzanie procesami w łańcuchu dostaw. Logistyka, (2), 81-87.

Rutkowski, K. (2004). Zarządzanie łańcuchem dostaw – próba sprecyzowania terminu

i określenia związków z logistyką. Gospodarka Materiałowa i Logistyka, (12), 2-8.