Traceability Concerns in Warehousing and Processing

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Tyrone Peters
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1 24th Partnership Meeting & Cocoa Sustainability Trade Fair Tuesday, October 15, Wednesday, October 16, 2013 Traceability Concerns in Warehousing and Processing Jeffrey L. Wheeler COO

2 ARRIVAL AT WAREHOUSE

3 STORAGE AT WAREHOUSE

4 BAG IDENTIFICATION AT WAREHOUSE

5 NOTIFICATION OF WAREHOUSE

6 RECEIPT INTO INVENTORY

7 DELIVERY TO PROCESSOR

8 END USER

9 Traceability Considerations in Warehousing and Processing 24 th Partnership Meeting Santo Domingo, Dominican Republic October 16, 2013 Page 9

10 Agenda Traceability Is Importance to Warehousers and Processors Importance to others in Cocoa Supply Chain Drivers, Benefits and Incentives Traceability in the Future Technologies Final Thoughts and Recommended Actions Page 10

Cocoa Traceability Is A methodology that provides the ability to identify the path and the history of a cocoa product and monitor the processes it is subjected to throughout the supply chain.

11 Cocoa Traceability Is A methodology that provides the ability to identify the path and the history of a cocoa product and monitor the processes it is subjected to throughout the supply chain. An enabler of improved Food Safety Crisis Management, Food Supply Management, Food Quality Management, Social Standards and Customer Satisfaction. Becoming more necessary as legislation and regulation impact the food supply chain. Intertwined with (and is foundational to) achieving and maintaining certifications. Page 11

12 Traceability is important to Warehousers and Processors to establish confidence that the products they receive, process and ship are safe and that their chain of custody is never broken. Example of Areas of Concern: Pest Control Foreign Material protections- Glass, Hard Plastics Allergens - cross contact segregation & spill clean up Safe Storage of Chemicals Sick Employee Product Protections Maintaining Certification Page 12

And Also Important to Farmers so that they can benefit economically by producing certified cocoa at a premium creating cocoa production sustainability Exporters so that they can know with certainty

13 And Also Important to Farmers so that they can benefit economically by producing certified cocoa at a premium creating cocoa production sustainability Exporters so that they can know with certainty the origin of their products and communicate that information accurately to downstream supply chain stakeholders Transformers so they are sure that the ingredients they use meets their standards and will produce quality products for consumers Retailers so they know that the food on their shelves has come from reliable, certified sources and is safe to sell Consumers to create consumer confidence that food is safe and meets expectations (organic, fair trade, vegetarian, kosher, halal, etc.) Page 13

14 Drivers Regulatory Safety / Quality Social Economic Technological Page 14

15 Benefits Customer Satisfaction Cocoa Supply Chain Management Competitive Stance Better understanding of internal logistics / issues, better quality Continual evolution of cocoa traceability technologies Cocoa Sustainability Page 15

16 Incentives Avoid risks / costs of product recalls Global competition / access to markets Cost savings / business process efficiencies Compliance with regulations Consumer Confidence Page 16

17 Technologies Document Based Systems Data Base Systems ERP Systems Barcoding Radio Frequency ID solutions Nano Technologies Homogeneous Systems Integration Mobile / Cloud-based / Software as a Service (SaaS) Page 17

18 Future Challenges US: The 2001 Bioterrorism Act: As of Dec. 11, 2006, food processors are required be able to identify the origin of all food received by lot, code or other identifier and provide the same information when releasing products. The Act applies to both foreign and domestic food, including all ingredients. Civil and criminal actions can be taken if information is not provided upon request to FDA within 24 hours. EU: Food Law - Regulation No. 178/2002 has come into force since the first of January This legislation requires all Food Business Operators (FBO's) in the Food, Drinks and Animal Feed sector to be able to provide "one step forward" and "one step backwards" traceability. US: The 2011 Food Safety Modernization Act: FSMA Empowers FDA to order mandatory recalls and establish a food product tracing system. The Act requires FDA to use pilot studies and stakeholder recommendations to develop the food product tracing system. Page 18

19 Final Thoughts and Recommended Actions Traceability must be defined in terms of a common language and goals to overcome breaking the chain of custody when product moves from one stakeholder to the next. Bulk products must be shipped and stored in uniquely identifiable containers. To be effective, the cocoa industry needs a standardized way to implement and operate traceability that is accepted by regulatory authorities, adopted by the various certification entities, meets traceability needs of the cocoa supply chain stakeholders and is endorsed by WCF. Page 19

Final Thoughts and Recommended Actions Each stakeholder in the cocoa supply chain should be uniquely identified so that their interaction and the processes they apply can be recorded as the product

20 Final Thoughts and Recommended Actions Each stakeholder in the cocoa supply chain should be uniquely identified so that their interaction and the processes they apply can be recorded as the product moves through the chain. Technology systems are essential for immediate response to a food safety crisis. Traceability is only effective when done from end to end. Traceability and Certification go hand in hand. Page 20

21 Call for Action WCF should consider creating a workgroup of cocoa supply chain stakeholders (farmers to retailers) to study traceability scenarios in the cocoa supply chain and propose common standards and a roadmap for developing and implementing a universal traceability information system. Page 21

22 Thank You Page 22

23 Connecting World Trade European Presentation Connecting World Trade

WHO WE ARE: CWT GROUP OVERVIEW Integrated

Global logistics infrastructure & Global

Commodity Logistics Commodity SCM Contract

Services - Founded in 1970 - Singapore HQ

24 WHO WE ARE: CWT GROUP OVERVIEW Integrated logistics and SCM solutions provider Global logistics infrastructure & Global network connectivity enable supply chain synergies and distribution capabilities CORE BUSINESS PILLARS COMPANY SNAPSHOT Commodity Logistics Commodity SCM Contract Logistics Freight Logistics Engineering Services - Founded in Singapore HQ - Listed on SGX in April Stock ticker: CWT - Issued share capital: 600,304,650 - Market capitalisation: SGD 723 M Connecting World Trade

25 Connecting World Trade HISTORY WITH BULK COCOA

26 HISTORY WITH BULK COCOA Internal shunt 20ft/40ft containers Automatic discharge & filling station: weighing, sampling and dust extraction Storage in 1.6MT boxes Transport to factory: conveyor belt trailers max. 30Mt Connecting World Trade

ROAD TO WORLD CLASS SUPPLY CHAIN TRACEABILITY DELIVERED COST SUSTAINABLE PEOPLE Origin Competitive Safe Ongoing Training Product type Innovative Co2 & waste Reduction Product Expertise Transport,

27 ROAD TO WORLD CLASS SUPPLY CHAIN TRACEABILITY DELIVERED COST SUSTAINABLE PEOPLE Origin Competitive Safe Ongoing Training Product type Innovative Co2 & waste Reduction Product Expertise Transport, handling & storage mode Efficient, flexible & reliable Environment Zero Harm State of the art end to end SMS Investment Quality & Pest Control Communication, teamwork & KPI Connecting World Trade

28 COMMITMENT WORK AND ALIGN TOGETHER: WE ALL HAVE A ROLE TO PLAY TOTAL JOINT SUPPLY CHAIN MANAGEMENT: END-TO-END TOGETHER REDUCE TOTAL DELIVERED COST Connecting World Trade

FDA FSMA Timeline. July 29, 2009 House version passed. Nov. 30, 2010 Senate version passed. Dec. 19, 2010 Senate revised version passed

FDA FSMA Timeline. July 29, 2009 House version passed. Nov. 30, 2010 Senate version passed. Dec. 19, 2010 Senate revised version passed Food Safety Modernization Act (FSMA) FDA FSMA Timeline July 29, 2009 House version passed Votes 283-142 Nov. 30, 2010 Senate version passed Votes 73-25 Dec. 19, 2010 Senate revised version passed Unanimous