Melbourne-based supplier of innovative equipment and materials, Result Group, has joined GS1 Australia as a Strategic Alliance Partner to help drive its growth in the Australian market.
Consumers’ daily lives revolve around trust. Every day, when peeling an orange, opening a can of baked beans or dining in a favourite restaurant, consumers put their trust in Australia’s food supply chain.
Behind every food and beverage product on the shelf is a supply chain journey that starts with ingredients. The Australian food manufacturing industry is an intricate maze of ingredient and packaging suppliers, most with different supply chain management solutions.
Today, sourcing ingredients without a traceability and food safety protocol invites counterfeit products onto the food chain and an increased risk of contamination. News of unsafe or spoilt food can impact business owner’s livelihoods and the industry’s broader reputation, along with disruption to consumer’s lives.
“To manage ingredient safety and increase the visibility of food ingredients and raw materials in these complex supply chains, a new initiative, the Supply Chain Improvement project, is being implemented using GS1 standards,” said GS1 Australian account director Andrew Steele. “The project’s objective is strengthening integration between the thousands of upstream supply chains in the Australian food manufacturing industry.”
An industry working group has been set up to drive the project using the GS1 global standards for product identification, data capture and data sharing. GS1’s Global Traceability Standard (GTS) is the foremost traceability framework, allowing businesses to track their products in real-time and have end-to-end visibility of the supply chain.
“The group will work to achieve consensus across the industry to improve food safety, deliver efficiencies and reduce costs,” said Steele.
Representatives from Nestlé, Ingham’s, SPC, Lion Dairy and Drinks, Sanitarium, CHR Hansen, Newly Weds Foods, FPC Food Plastics, Labelmakers, Matthews Australasia and Visy Industries make up the group.
The ability for companies to capture material movements from ‘paddock-to-plate’ provides data integrity and timeliness from receipt to delivery, with traceability back to the source. Through automation, many of the manual processes are eliminated and businesses can be proactive with inventory management and handling systems.
“As a food and beverage business it’s critical for us from a food safety perspective to be able to track ingredients all the way back to the origin,” said SPC’s national logistics manager, Christian Lecompte.
Also critical to business is the capability to support information and production flow within existing systems for integrated supply chains. The project has the capacity to eliminate waste within an organisation’s value stream, reduce non-value-added tasks and ensure cost-effective solutions for customers, leading to a ‘right-first-time’ approach for all deliveries.
“One of the things we found we could do to be more efficient was to look at opportunities to be able to electronically track all the product ingredients throughout the production cycle – how we identify a product coming into the warehouses, how we receipt goods, how we put our goods away, how we manage our inventory and how we deal with our suppliers,” said Lecompte.
The adoption of GS1 standards as the common language for the identification, data capture and data sharing will enable automation of key ingredient sourcing, and traceability between ingredient suppliers and food manufacturers. Using GS1 standards for upstream integration goes well beyond minimum standards and allows businesses to translate their internal processes and approaches into the one common language that all trading partners can use and understand, without having to translate data formats across different supply chain management systems. This is the key as Steele believes interoperability is essential to the future of data sharing.
“Establishing international standards to ensure transparency across the supply chain can help lower existing barriers to the exchange of data between suppliers, trading partners and consumers,” he said.
The Supply Chain Improvement Project has the potential to deliver many benefits to industry, including increased visibility of food ingredients and raw materials, unique identification and traceability to improve food safety, and reduced costs with automated business transactions.
Nestle Australia’s head of digital supply chain, Mandeep Sodhi pointed out the key to the project’s success. “By having consensus across the industry on how to interconnect electronically and exchange critical operational data, we can realise cost-effective solutions across the end-to-end – from manufacturers, to suppliers, to customers – everyone benefits from this improvement in standardisation,” he said.
Looking ahead, the industry working group is encouraging all upstream businesses to adopt the food safety and traceability protocol using GS1 standards.
“With an industry-wide solution in place, your trading partners will have more visibility of your products across the supply chain,” said Steele.
Over the past few years, with the Internet of Things (IoT) and Industry 4.0, data has been at the forefront of a lot of thought processes when it comes to smart factories and new products. If there is one thing GS1 knows about, it’s data. That is the raison d’etre of the standards bearer. After all, it was at the forefront of the barcode revolution. So what of the future?
A keynote speaker at the company’s Nexus 2019 Conference, was the not-for-profit organisation’s global chief solutions and innovation officer, Robert Beideman, who spoke about the importance of new technologies and where the likes of barcodes and their future iterations stand.
GS1 standards are the link between technology and business. Beideman believes that at the core of every consumer interaction is data. He also believes that a lot of companies are struggling to know what to do with all this information. As the video shown before his speech stated – “anything that can be connected will be connected” and “the identification of everything, makes anything possible”. Unique identification – something becoming more critical when it comes to food and beverage traceability, especially in emerging lucrative markets – is at the forefront of the latest moves towards digitisation and how it affects the consumer experience.
Technology, disruption and the supply chain were the main themes Beideman wanted to talk about.
“This conference is about what we can do to solve the problems that we all have together. Whatever those problems might be,” he said.
“Part of what we do with GS1 globally is take a look and scan the horizon. We work with GS1 Australia, with 113 GS1 member organisations around the world. These are country organisations that represent industry all around the world.”
He said, that what GS1 was concentrating on at the moment was looking at the major business problems that were facing everyone and prioritising them. Only then, said Beideman, is it possible to look at the technologies that might come to the fore and help solve the most pressing issues. He said the first thing people have to look at is data security and privacy.
“It is a $200 billion industry already,” he said. “This means we have the opportunity to do better when it comes to the amount of data we consume, that we share across enterprise, or we share with our trading partners. It is a huge trend – data security and privacy. Who owns what data?”
He said a side-effect of this, especially in the food and beverage industry, is issues around traceability. Standards for traceability have been around for more than a decade. He said that every so often there was a push for supply chains to do better with traceability, but it has never really taken hold – it has never become true end-to-end traceability.
“Until now,” said Beideman. “Regulatory drivers. Consumer drivers. People want to know where the stuff they buy is coming from. Where it has been? What it is made of? These business drivers are on the rise. There are things we have to do as an industry to address them.”
Beideman sees this as a huge opportunity for businesses, especially if the visibility, history and movement of goods is improved.
He added that there are a couple more pieces to the supply chain puzzle. Sustainability and the two-worded latest buzzword phrase “circular economy” as it relates to recycling. It also includes, he said, fair trade initiatives.
“With all these business challenges and issues arising every day, how do you prioritise?” he said. “What do you spend money on? But there are massive opportunities to serve customers more efficiently. And the list goes on. What about on-demand logistics services? I recently saw a video of an airship where drones were flying out of it and dropping off packages to people.”
He reiterated that the work needed was both Business to Consumer (B2C) and Business to Business (B2B). Streamlining processes, reducing transit times and warehousing and carrying costs – these are all business challenges that companies are being faced with every day.
“Then, there is the trend of automation and everything getting smarter,” he said. “You have smart cities, smart factories, smart homes and you have smart health. I’m not sure everything is getting smarter, but there is absolutely more data being generated.” And the challenge, said Beideman, is; how do companies adapt to these changes?
“I mean, when refrigerators know how to place an order for food, how do we react?” he said. “It doesn’t matter if you are a retailer, a brand or a transport company, you need to consider how this future impacts on your business.”
He said that another trend that was starting to gain traction, was bespoke products and services – drugs, food, vitamins.
“How do we react as an industry?” said Biedeman. “This is up to individual companies to solve, but they are things that we need to talk about.” GS1 Australia can provide some insights into the technologies that are available. This is also true of the value chain that it considers as it builds up standards with industry to remove costs and create better experiences to help companies sell more products.
“The value chain goes further upstream these days, to include growers and farmers, and it goes further downstream past the point of sale to the use of products and to the end of their life,” he said. “The value chains of today are far more complex than the traditional supply chains of yesterday.”
After GS1 looked at business trends, it looked at how technology could help. Put simply, IoT-enabled products create data and that enables the development of applications across industry, according to Beideman.
“Whether it is machine optimisation, smart industrial applications, or warehousing or logistics applications, sensors are becoming cheaper and more abundant and the data they are generating has the opportunity to help users address the aforementioned business challenges,” said Beideman. “But harnessing that data and making it useful for you is the challenge. Most of it is unstructured and not defined, and most of it is not standard.”
He feels that the better the standards can be mashed together, the better everybody will be. He said that Artificial Intelligence (AI)and the IoT create sets of data and knowledge and allow people and companies to take information from it – useful insights into whatever a company has to do. However, he said for AI to be something that helps solve business challenges, massive sets of data are required.
“Data that you understand the meaning of,” he said, “is essential. There is a massive trend out there in every industry in the world for data to become more readily available and easier to comprehend by machines. Everybody’s websites can be better than they are by using standards. It is the simplest thing in the world, but not something we have properly thought about. Not even if you are the representative of the IT team in your organisation. The more data we can put out there for consumption by machines, the easier it will be to solve those big business issues.”
He also said to be careful using blockchain as a blockchain is only as good as the data and information that is contained within it.
“If the information you have in it isn’t accurate or of good quality, all you have in your blockchain ledger is the ability to share bad data really well,” he said. “That is not helpful. Get the foundation right, and layer the technology on top of it, and solve your business problems.”
What GS1 has ended up doing is taking all of these technology enablers, and mapped them against business trends.
“We have released a report that is unique, in that I have never seen this done before,” said Beideman. “Truly mapping technology enablers to business trends as it relates to supply chains. So anyone – whether you are in the logistics space, part of the supply chain, or a manufacturer, the contents of this report can be helpful for you prioritising the technology investigations that you choose to do, or how to map them into the business challenges you are faced with solving.”
He said that GS1 sees a future where every retailer can verify every product that every brand makes, automatically. Where every retailer can connect to brand-authorised data about every product automatically and globally. Where every consumer can engage with every product in a way that generates added value back to the trading partner’s supply chain. Or every product that is made, can be a source of data back into a manufacturer’s enterprise.
“You can learn about what happens as it leaves your production line,” said Beideman. “But every product can also be a source of data back into every retailer on which that product sits on shelf. And imagine all that can happen while lowering costs and removing friction across supply chains.”
Beideman said it sounds like an impossible task, but he said GS1 is trying to do four things to bring that future closer to life.
The first, he said, is that they are developing a registry platform – a global, thin, neutral registry – of all the things that have identification based on GS1 standards. This means that anything that has a GTIN (Global Trade Item Number) on it, anything that has a barcode on it, will have the opportunity to be registered in this global, neutral, not-for-profit platform with some basic, simple attribution that raise the visibility of the smallest of the small business products.
“Number two, is making things into sources of data,” said Beideman. “There’s a standard out there that now bridges the physical and digital world of commerce that allows you to put a single barcode on a package that works and goes beep at the checkout, but also works on two billion mobile phones. There is work going on in Australia called data-embedded barcodes where we are investigating what is the right way to take the next steps are in terms of volume-pack barcoding. But one thing is essential – if we want two billion consumers out there to scan and read the stuff we make or sell, you have to bridge the physical and digital worlds much more effectively than we have.” Then there are the web pages. Beideman believes companies are really good at making web pages that enable people to add items to carts and checkout and have things delivered. But he believes that companies are bad at making websites that are easily consumed by Google, Yahoo, Yandex and Bing – the largest search engines of the world.
“It turns out the keys to the castle when it comes to data on the web,” he said, “is to know there are standards for that. How to define and describe products online in a way that has no impact on how your consumer sees your web page, but have a massive positive impact on the visibility and availability of your products. It’s called the GS1 Web Vocabulary. It’s really a little-known secret. Being able to supply accurate, structured data about products on your web pages changes the game. And there are standards for it.”
The final point Beideman wanted to make, is only a suggestion, he said.
“Think about how devices that talk to you – like Alexa, Google Assistant or Siri – are changing the game when it comes to things like buying decisions,” he said. “It’s starting now with a conversation with an electronic device. How are you going to adapt to that in your business? How are you going to ensure that your company is going to have a voice? That’s something to think about. Because right now, there is a world filling up with companies that own the microphones in your home and in your pocket via your mobile phone. And if you are a retailer, a brand, a transport organisation – how do you connect into those ecosystems. Or better yet, how do we figure out a way to make it open and balanced and neutral?