Helping the seafood industry assess the financial impact of implementing traceability
The Institute of Food Technologists (IFT) is an international, non-profit professional organization for the advancement of food science and technology. It is the largest food science organization in the world, with almost 18,000 members from more than 100 countries. The Global Food Traceability Center (GFTC) is a public-private partnership program within IFT that was created for the express purpose of being the global resource and authoritative voice on food traceability.
Food traceability offers tangible financial benefits for food companies across the supply chain. It’s a proven business tool that can drive new market opportunities, lower costs, increase margins and reduce business risk. However, many still have the misperception that food traceability is just a method to verify the source of products. Others appreciate that there is more to traceability but struggle to quantify the benefits. Enter Brian Sterling and the GFTC. Mr. Sterling is the Managing Director for the GFTC, which helps educate food organizations on the full business benefits of traceability. Finding a way for these organizations to easily quantify the benefits of traceability led to the creation of the Seafood Traceability Financial Tool.
The GFTC selected Intelliware as the technical partner to help develop the tool. Based on input from seafood business leaders and owners, Intelliware built a tool that helps organizations in the seafood industry – Harvesters, Processors, Distributors, and Retailers – understand the financial impact (costs and benefits) of implementing traceability.
In designing the tool, ease of use was paramount. As Sterling explained, “The tool needed to be easy-to-use because many business owners we talked to did not want to spend a lot of time or resources calculating the return on investment.” Consequently, the tool helps businesses identify the payback from traceability by asking basic questions about the organization, and their reasons for investing in traceability. The user is guided through an assessment of how traceability may impact their business, including items such as:
- New market access and customer growth
- Lawsuits and liability insurance costs
- Recall management costs
- Information management
- Scrap/waste/shrink costs
- Quality management
The tool delivers the Net Present Value of investment over the user-selected time horizon and displays a confidential results page with a forecast of return on investment.
The tool is now used by those in the seafood industry as a way to make the case for traceability. As Sterling summarizes, “The presentation of the final results is clear and concise, and the ability to share them is very helpful. Several people have remarked that they could use the results directly with their management or even with banks as a guide to the return on investment in traceability.” Going forward, the tool could be adapted to other food sectors, such as dairy, meat, bakery, and produce.
The GFTC is offering this tool as part of its service to the seafood industry, and have made it freely accessible online at: http://www.seafoodtraceability.org
Figure 1 – Cost-Benefit Summary: Net Present Value of Traceability Investment
What was it like working with Intelliware?
“Intelliware was easy to work with. They were able to quickly and effectively take the direction and requirements from our user test groups and turn them into a working tool… Intelliware worked closely with users and GFTC researchers to develop a tool that delivered both flexibility and robust, rigorous financial calculations for the ROI of traceability.” –
Brian Sterling, Managing Director, the Global Food Traceability Center (GFTC)