Setting the table for a smarter food system

We need to make food affordable and its production more sustainable and efficient
Lim Teck Chang, Business Times 13 May 09;

HOW do we put food on our tables? Once, people simply relied on their local farmers. Today, we depend on a global web of growers, fisheries, packers, shippers, manufacturers, retailers as well as government and industry bodies.

As the world becomes smaller and 'flatter', countries that at one time seemed distant are now primary sources of our food supply. Many of those countries do not have consistent standards for quality, process and accountability. Additionally, this complex system impacts and is impacted by other global systems - from energy to climate to health care to trade.

The result is a whole host of inefficiencies arising from issues of scarcity, safety, sustainability and cost. And an opportunity for our food system to get a lot smarter.

We need to make sure our food system is safe. In the United States alone, 76 million cases of food-borne illnesses occur each year. Imports account for nearly 60 per cent of the fruit and vegetables we consume and 75 per cent of the seafood. Yet only one per cent of those foods are inspected before they cross our shores.

In China, too, more are scrutinising what they consume. A new IBM study reveals erosion of trust and confidence in food retailers and manufacturers grows internationally; with 84 per cent of Chinese consumers more concerned with food quality issues than they were two years ago and two-thirds wanting more information about food source/content.

This is not surprising since product contaminations and food recalls have become more commonplace across the globe. Melamine - a toxic chemical widely used to make plastics and glue - was recently found in Chinese infant formula and sickened more than 294,000 people, according to reports from China's Ministry of Health. The scope of the problem quickly multiplied to include a wide range of products containing milk sourced from China. As a result, sales of staple products, such as milk, chocolate, ice cream, candy and more have plunged worldwide.

Cold chain supply

For those living and working in Singapore, we are in the good hands of the local government. The Agri-Food & Veterinary Authority of Singapore (AVA) works hard to ensure a resilient supply of safe food, safeguard the health of animals and plants and facilitate agri-trade for the well-being of the nation. The AVA website is a treasure chest of useful information. From food safety education, product recall alerts, food facts, food safety resources, treatment of frozen meat to cold chain systems, the AVA keeps us abreast of the latest in food safety.

In the early 2000s, IBM Singapore assisted with Singapore's development of a cold chain study, together with Singapore Polytechnic and the Singapore Manufacturers' Federation (SMa), formerly known as the Singapore Manufacturers' Association. We examined the cold chain supply for milk products, ensuring the milk products from distributors all the way to the supermarket shelves stayed below 4° Celsius. This was a project driven by Tan Jin Soon, the current executive director of SMa's GS1 Singapore Council. The Singapore Cold Chain Centre was set up by the SMa and intended to be a resource centre for Singapore and the Asian region with the mission to provide technical expertise in the cold chain management within the manufacturing process as well as in the cold chain management for logistics.

To contribute to the development of Singapore as a cold chain hub of the region, the Singapore Cold Chain Centre runs training programmes to train a pool of skilled workforce with good knowledge of cold chain management to ensure the quality of the products including milk and dairy products and chilled pork throughout the entire supply chain.

Pet food, lettuce, peanut butter, baby food and milk - these are just some of the high-profile recalls we've seen of late causing consumers worldwide to be worried.

Is their food safe? And where did it come from? One solution is track and trace technology, including 2D and 3D barcode and radio frequency identification (RFID) which allows us to track food from 'farm to fork'. And now government regulations and industry requirements for quality and traceability are driving food producers worldwide to provide more detail on products.

With an increasingly global supply chain, that detail must be comprehensive and reliable. And with that detail, companies can realise added value as well, such as a streamlined distribution chain and lower spoilage rates. In fact, consumer product and retail industries lose about US$40 billion annually, or 3.5 per cent of their sales, due to supply chain inefficiencies.

The average meal has been through a complex supply chain by the time it reaches the dinner table. Dozens of companies are involved in the production of just a single rib eye steak.

In the Canadian province of Manitoba, IBM helped develop full traceability solution, providing business consulting and project management services, working more than 16 supply chain partners, including beef and pork producers, animal feed ingredient producers, feed manufacturers, farmers, processing plants, truckers and a retail grocery chain.

Using Global Traceability Network (GTNet) software from IBM Business Partner TraceTracker, Manitoba's project shows it is possible to securely and accurately gather and crunch data about a piece of meat from a variety of sources and share that information, at any step in the process.

Butchers at Germany's METRO Future Store do more than dress roasts. They also apply RFID smart labels in a solution designed with IBM. Each package is identified and recorded when it is placed into the refrigerated display case, which is fully equipped with readers and antennas to scan the label of each product as it goes in, as it sits on the shelf and as it goes back out with a consumer. The information helps the store maintain fresh products, control the environment in which they are stored and manage inventory levels with real-time sales data.

Avoiding losses

We need food to be affordable. As mentioned above, consumer product firms and retailers lose US$40 billion annually, or 3.5 per cent of their sales, due to supply chain inefficiencies. And the true cost of food production can't always be captured in dollars. Sixty years ago, we could create a calorie of food with less than half a calorie of fossil fuel. Today, a single calorie of modern supermarket food requires 10 calories of fossil fuel to produce. And we need to make food more sustainable and efficient. Rising fuel costs are making it increasingly difficult to get enough food to the populations that have come to depend on distant producers. At the same time, 30 per cent of the food purchased in developed nations ends up going to waste.

Trying to manage these problems in isolation is no longer an option. Fortunately, a smarter global food system - one that is more connected, instrumented and intelligent - is at hand. In addition to the above-mentioned RFID technology to trace food from the farm through the supply chain to the store shelf, IBM is also collaborating with some of the world's leading retailers and manufacturers to create software solutions that can more efficiently integrate product demand with supply replacements, and help dramatically cut time, cost, waste and out-of-stock conditions.

And in response to the global hunger crisis, IBM scientists are helping to develop stronger strains of rice that could produce crops with much larger, more nutritious yields.

A smarter food system means end-to-end visibility across the entire global supply chain. So scarce resources can be more thoughtfully managed. So people can have more confidence in the quality of their food. So the whole world can put healthy meals on the table.

The writer is an associate partner of IBM Global Business Services in Singapore