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Technological advances have influenced the restaurant industry in obvious ways, including through virtual reservations, online reviews, and increased customer interaction through social media. But in the back of the house, new tracking software and standards are revolutionizing supply systems, allowing restaurant operators to have a better understanding of where their food comes from.
Brands report that the traceability changes have increased efficiency and food safety, while also boosting the bottom line.
“We always hoped that there would be a financial benefit,” says Andy Kennedy, president of the software company FoodLogiQ, which specializes in traceability. “What we’re seeing is the actual ROI is much greater than we initially anticipated.”
GS1 US, the domestic member of the greater international GS1 standards organization, sets unique item numbers for various products across the supply chain. These identifiers, known as Global Trade Item Numbers (GTIN), allow manufacturers, distributors, and retailers to track shipments. Each number also includes information like whether the product is GMO-free or sustainably produced.
“You can ask any of those questions once you are standardized in how you identify products, and once you standardize the information exchange,” says Angela Fernandez, vice president of retail grocery and foodservice at GS1 US. In the last eight years, tracking products has improved as digital, cloud-based tools steadily supplant the traditional paper methodology, she says.
Chipotle is one brand that partnered with FoodLogiQ to streamline its traceability system and can view a specific product batch as it moves through the supply line almost in real time.
“We have always had the ability to track and trace our food throughout our supply chain,” says Heidi Wederquist, director of quality assurance and food safety for Chipotle, in an email. “However, as anyone familiar with conducting traceability exercises can attest, the industry’s current ‘one-up, one-back’ traceability approach takes time.” That one-up, one-back approach refers to the requirement that supply chain items be identified by the previous stop and subsequent destination.
Before new technological solutions were developed, tracking a particular item could be both time-consuming and costly, Kennedy says. Now manufacturers can work directly with suppliers to upgrade internal systems to track supply, and that’s lowering the cost of communication, he adds.
For example, manufacturers can see consumption information quicker and in greater detail. This information allows them to plan accordingly with shipment quantities and timelines. Such details are particularly beneficial for perishable commodities like food.
“With most of the food items, unfortunately, after a week—or whatever is the shelf-life—I need to discard them,” says Philip Schram, executive vice president of franchise development for Cincinnati, Ohio–based Buffalo Wings & Rings.
The supply chain division at Buffalo Wings & Rings already labels its pallets and boxes with detailed information, including the item name, weight, nutrition, allergen, and kosher or halal information. The final implementation phase will transfer that information to a consolidated barcode.
“It seems simple on paper, but now more companies are using computer software, so that means that you have to integrate each batch into your computer system,” Schram says.
Similarly, Chipotle is making the data crossover one tier at a time, and the brand is relying on its suppliers to lead the industry by adopting the GS1 standards, Wederquist says.
Companies are slowly realizing that it is possible to improve traceability measures, and that can translate to increased “visibility into the rest of your business,” Fernandez says.
However, not all quick-service restaurants are eager to integrate cloud-based software into their supply chains.
“In essence, if there is a product issue, we have to understand within two hours which distribution center has that impacted lot code,” says Scott Berkman, chief purchasing officer at Le Duff America, parent company to Bruegger’s Bagels and La Madeleine.
Le Duff America does not use cloud-based traceability software, but does follow GS1 standards in its own supplier quality program.
The Food and Drug Administration has been slow to set its own mandates, but that has not stopped manufacturers, distributors, and operators from making upgrades.
Even more than the involved implementation process, the greatest obstacle to improving traceability may be a shift in mentality.
“People don’t like change,” Schram says. “At the end, the system can run leaner and [with] better-quality operation. It’s more the change in the mentality—that’s the biggest challenge.”
Greater visibility leads not only to a better understanding of the supply chain as a whole, but it also encourages accountability, Kennedy says. It shows proof of delivery, accelerates the invoicing process, and helps eliminate quality issues and returns, he adds. These factors contribute to a stronger bottom line.
“By communicating specifically what you want and getting that product quicker, you’re taking a lot of slack out of the rope,” Kennedy says. “It’s kind of like spring cleaning for the industry.”