Challenges of a food traceability system implementation

Chicken food producer, Dong Nai

The harsh reality is that a lot of food traceability projects fail. Successful solutions are not made in board rooms, but in the reality of farms, slaughterhouses, and retail markets. Solution providers have to be prepared to face a lot of challenges:

How to convince supply chain participants to modify their well-polished working processes?

It’s idealistic to believe, that good technology or blockchain itself will convince supply chain companies to adopt traceability. Due to the low margins in food supply chains, farms, slaughterhouses, food producers, wholesalers are working with extremely optimized manual processes. Convincing them to embed new activities takes a lot of time, determination, and training. Although most of them support information transparency and credibility in general, but when they have to use it, you need a ready and efficient implementation methodology to show them how to do it efficiently.

How to train tens of thousands of workers?

Training in Ho Chi Minh City

Imagine you have to train the workers of 3,000 farms, when many of them are 100 kilometers away from each other in isolated areas. Or how hard it is to convince a truck driver to allow a sensor tool in the truck, when all he thinks is that he might lose his job if the sensors measure something unusual.

You need a good training team, excellent organization, and a training methodology to be efficient. In most cases you have to take the hard way, because online learning in distant village farms and slaughetrhouses is not feasible.

How to deal with the great deal of conflicting interests?

The reality is, that counterfeiting, dilution, contamination are food frauds from one side, but from the other, a huge income for those who commit them. In many cases, these people are participants of the supply chain, or even representatives of the authority. They will fight traceability implementation as hard as they can.

A traceability system with alerts against fraudulent activities is a real threat to those who inject sedatives to pigs during the transport for better meat color, or don’t turn on the refrigerator to save money while storing meat. You have to be aware, and fight your way to a fraudless industry.

How to solve the unbalanced costs and benefits of food traceability?

An important cause of failed traceability projects lies in the fact that most of the traceability costs are paid by participants which are in the beginning of the supply chain (typically the farms), while the companies at the end of the chain (retails) benefit the most from transparent traceability data.

To gain the support of companies which will provide the most traceability information to the system, you have to find a way how they can benefit from using it.

Slaughterhouse, Ho Chi Minh City

How to design a solution the supply chains accept?

To change how supply chains operate is a long and tedious task. These operational structures are existing for decades, and participants are used to its processes. Disruptive technology has to be presented along a carefully planned process and a lot of education.

How can you convince supply chain participants to accept a new type of cost, when their profit margin is minimal?

Food suppliers are very cost sensitive. You need excellent arguments, and creative reimbursement strategies to make them accept the additional cost of traceability.

How to design a business model to be accepted ?

Most companies in the livestock and fresh food supply chain are low on funds, and have low margins. To find the right business model is essencial to make a traceability project sustainable. In many cases the whole project fails due to lack ot this skill. In the emerging countries, there are many food safety related social aids supported by NGOs like FAO or World Bank, but the money isn’t always spent the best way. We believe that building a sustainable business on food safety is much more efficient to make difference on the long term.

How to consult authorities to create regulations to implement a traceability program?

To be successful, it’s essential to motivate national authorities and local goverments to actively participate in a traceability program. They have the possibilities to make regulations, sanctioning, and to communicate with the population.

You have to be expert on consulting local and national goverments to issue regulations in order to convince participants to follow the processes. In each region, you may face differences in the supply chain process. So the system has to be adaptable to special requirements.

Our implementation methodology 
proved that it’s possible to solve these problems.

TE-FOOD is going to implement blockchain, and tokenize its operation. Pre-sale is planned for November, 2017.

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