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Industry insight and commentary that addresses supply chain issues

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Chipotle’s Woes Highlight Need for Track and Trace Across Supply Chains

Posted by Katy Schamberger on Dec 22, 2015 2:34:21 PM

Supply chain visibility and traceability are key to improving operational efficiency and enabling communication among trading partners. Yet in the event of a crisis, visibility and traceability become imperative in order to quickly identify—and solve—the problem. Not only do you want to fix the problem as soon as possible so that the minimum amount of product is affected; you also want to reassure customers that you’re taking the necessary steps to protect their safety and earn the investment they’ve made into your goods.

Product recalls are an ever-present risk in a variety of industries, yet the food and beverage industry is especially susceptible to product contamination and recalls, given the perishable nature of their products and the often complex supply chains that span suppliers, manufacturing facilities, distribution, retail locations and, of course, customers. That’s a lot of moving parts to juggle. And when a problem emerges—such as E. coli outbreaks that have impacted several locations of fast casual restaurant Chipotle—it’s easy to see why complete track and trace is a supply chain imperative.

As part of Chipotle’s fast-moving response to the problem, the company has launched a comprehensive farm-to-fork assessment of each ingredient that will help Chipotle establish “the highest standards for safety,” steps that not only protect and ensure product quality but also safeguard consumer confidence in the brand.

“Through this review, we identified the risks associated with each ingredient and determined the optimal food safety practice for that ingredient,” according to Chipotle.

With that information as a quasi data-driven baseline, Chipotle is changing how ingredients are handled in the restaurant to help minimize cross-contamination from pathogens. The brand’s food safety plan continues from there, created with the help of IEH Laboratories and Consulting Group, led by Chief Executive Dr. Mansour Samadpour. Additional components of the plan include:

•    Initiating end-of-shelf-life testing, in which ingredient samples are tested to ensure quality specifications are maintained throughout an ingredient’s shelf life.

•    Pursuing continuous improvements throughout the supply chain using data from test results, improving Chipotle’s ability to measure performance of vendors and suppliers.

•    Enhancing internal training to ensure all employees understand the company’s high standards for food safety and food handling.

It’s not easy to make these types of sweeping changes, especially when a supply chain includes a complex network of suppliers and producers that might span a large geographic area. Yet this situation underscores the importance of full traceability from one end of the supply chain to the other, including suppliers, customers and trading partners. That way, in the event of a problem, businesses have the real-time information stream to isolate the problem down to the smallest possible unit, which could help prevent a larger, more expensive product recall while also helping to minimize damage to a brand’s reputation.

In our work with customers in a variety of industries, we’ve seen the growing importance of enabling track and trace from one end of the supply chain to the other. Whether enabled by detailed testing and periodic quality checks, as with Chipotle’s food safety program, or by capabilities such as serialization and lot tracing, collecting supply chain data isn’t a luxury; it’s an imperative.

Information is the key to track and trace—it’s with that data that you can track what’s happening throughout your supply chain, all the way back to the source. Yet aggregating that data across a supply chain, including across disparate systems of record, can be a significant impediment to enabling track and trace. To overcome these obstacles, you need supply chain solutions that can integrate with existing ERPs or other enterprise systems, as well as with other equipment that may be used throughout your operation—mobile, ruggedized and handheld devices, for example. Doing so enables you to create a continuous stream of information that spans your internal processes and can be shared with key trading partners, fostering transparency and communication that could, quite literally, be a life-saver in the event of a compromised product.

Situations like these often present learning opportunities and a chance to evaluate your company’s supply chain management practices. Take the time to sit down and examine your supply chain, as well as how you interact with your trading partners. Use these questions as a starting point to identify where you might have gaps, then you can take the necessary steps to fill them:

•    Do you have full traceability throughout your supply chain? If not, where are the information blockages and unknowns?

•    Have you enabled the connectivity and real-time information capture that documents the entire product manufacturing and fulfillment process: where it originated, where it was created, when it’s in transit and its final consumption?

By enabling full track and trace, you’ll not only be able to more easily pinpoint a product problem, but you’ll also have more confidence in the end product and where it came from, which translates to a higher degree of consumer confidence that can result in more sales, referrals and more widespread brand loyalty.

We’d love for you to join the discussion. Feel free to share your thoughts—and, if you’d like, your company’s approach to supply chain visibility and traceability—by tweeting us at @DSIMobile.

Topics: chipotle, chipotle e coli, chipotle supply chain, consumer confidence, product recalls, product safety, Supply Chain Management, supply chain traceability, supply chain track and trace, supply chain visibility, traceability

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