Perishables Traceability: Critical for Today's Supply Chains

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3 Perishables Traceability: Critical for Today's Supply Chains Himanshu Bhatt IBM Global Solutions Executive & Program Director for Growth Markets Lars Sandtrov IBM Norway Sales Leader Geir Vevle Matiq Chief Architect

4 Agenda Need for Food Traceability IBM s Smarter Food Initiative Food Traceability In Norway Matiq s Drive to Provide Fresher and Safer Food Supply Chain

5 US Import Statistics for 2007 Source: Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce. U.S. consumers are purchasing approximately $3 trillion worth of products that are imported by over 800,000 importers through over 300 ports of entry 5

6 2009 IBM Global Supply Chain Study Global Chief Supply Chain Study U.S. consumeras are purchasing approximately $3 trillion worth of products that are imported by over 800,000 importers through over 300 ports of entry Approximately 60 percent of fresh fruits and vegetables and 75 percent of seafood consumed in the U.S. is imported. Only one percent of imported foods is inspected in global developed countries. Consumer product firms and retailers lose $50+ billion annually, or 3.5% of their sales, due to supply chain inefficiencies, including out-ofstocks. 30% of the food purchased in developed nations ends up going to waste. Public Safety - Each year, millions of people are sickened, 325,000 are hospitalized and 5,000 die from food poisoning

7 The Need for Better Food Traceability is Clear 70% 300 million The percentage of the world s fresh water supply used by agriculture. Pounds of meat and poultry recalled in the U.S. in the past fifteen years miles How far a typical carrot travels before it is purchased by the consumer

8 Food Safety is of Paramount Concern for the Nation E. coli in bagged spinach sickened 204 people and killed three Salmonella found in tomatoes sickened 183 people Peter Pan peanut butter contaminated with Salmonella sickened 425 people Veggie Booty snacks contaminated with Salmonella caused 65 illnesses frozen pot pies carrying Salmonella were recalled after illnesses were reported in 31 States nearly 22 million pounds of beef were recalled af ter E. coli contamination was f ound Aug, Sep 2006 Dec 2006 Feb 2007 March 2007 June 2007 July 2007 Aug 2007 Sep 2007 Jan Jan 2009 lettuce contaminated with E. coli at Taco Bell and Taco John restaurants sickened 152 people 100 brands of tainted pet food were recalled after sickening and killing thousands of pets 90 canned food products with botulism contamination were recalled after sickening eight people Peanut Butter contaminated with salmonella sickens over 1000, kills 20 Another nationwide recall of fresh spinach occurred following discovery of Salmonella in a test batch

9 Effect of Temperature Variation on Spoilage 34% of harvested crops are damaged through the processes of storage, packaging, and transport. 17% of crop lost in this manner is completely un-sellable. Source: Green Leafy Vegetable Supply Chain Storage, Packaging, and Transport, Prepared by International Development Enterprises

10 Spoilage and Damage for Fresh Vegetables at Each Stage in the Supply Chain Source: Green Leafy Vegetable Supply Chain Storage, Packaging, and Transport, Prepared by International Development Enterprises

11 Agenda Need for Food Traceability IBM s Smarter Food Initiative Food Traceability In Norway Matiq s Drive to Provide Fresher and Safer Food Supply Chain

12 IBM Solution Addresses Visibility Across the Total Supply Chain Producer Processing/ Packaging Manufacturer Distribution Center Retailer

13 What Is Smarter Food Supply Chain? INSTRUMENTED We now have the ability to measure, sense and see the exact disposition of everything in the supply chain. INTERCONNECTED The next challenge is to share information across regions, industries and governments INTELLIGENT Then, ultimately our business can manipulate this information and focus on value, exploit opportunities and act with speed.

14 Firewall The Future of the Connected Global Supply Chain Fertilizers Antibiotics Ingredients Packaging Ingredients Logistics Logistics Logistics Logistics Raw Materials Suppliers Ingredients Suppliers Ingredients Processors CP Manufacturer Distribution Centers Retailers / Wholesalers Logistics Logistics Logistics Logistics Logistics Data Data Data Data Data Data Transaction & Historical Data Firewall Firewall Firewall Firewall Global Virtual Traceability System Firewall Firewall Rapid communication of essential data facilitated through open-standard software and adoption of industry ID standards Insurers Non-Profits and NGOs IT Service Providers Media Creditors Regulatory Agencies Logistics Service Providers (LSP) Co-Packers Auditors Trade Associations Advertising Agency Food Brokers Equity Analysts Local Communities Packaging Suppliers Government

15 Smart Work Creating new business value using a palette of new and existing capabilities Sensor Event Services Rules & Patterns Analytics & Reports KPIs & Dashboards Process & Adapter Modules Device Interfaces Asset & Service Management Process Models

16 New Business Visibility is Delivered by a Platform for Event Management and Process Innovation WebSphere Business Process Management (WPS, WBM, WBE) Maximo (Enterprise Asset Management) Business Partner and Other 3 rd Party Applications WebSphere ESB SOA Foundation Location Awareness Process Integration Data Capture Applications EPCIS Use Cases Alerts Sensor Event Platform Reusable Components & Reference Apps Services for faster time to value & reduced risk WebSphere Business Events Event correlation across sensors and over time Data Capture & Device Control Normalized data collection with f iltering and aggregation Cognos Powered Analytics and Dashboards Increasing visibility through real-world awareness Event Capture / Query Services Standardized event capture, storage and exchange Serial Number Mgmt Service Serialization at production line speeds WebSphere Premises Server InfoSphere Traceability Server

17 Agenda Need for Food Traceability IBM s Smarter Food Initiative Food Traceability In Norway Matiq s Drive to Provide Fresher and Safer Food Supply Chain

18 Facts about Norway Kingdom Population Sheeps Main exports: Oil & Gas $100 Billion Fish (red/white) $6,5 Billion Clean electrisity, almost 100% from renewable sources One of the riches Country s in the world

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20 So What do we do?

21 National E-traceability project for food Background Outbreak of e-coli in 2006 Discussion between the industry and the Food Safety Authorities (FSA) on how to trace food in a efficient way The food-industry asks the Ministry of Agriculture and Food to take a leading and coordination role in the work for better traceability A pre-project is started in 2006, and concludes in January 2007 that an etraceability project should be started Aim of the project Establish a national, electronic infrastructure for efficient exchange of information in the food-chain Norway should be a leading country in Europe Take also a closer look to Geir Kuvås presentation from Monday

22 Sheep tracking benefits Keywords Prototype created processes logistics products strategic Using the information not to be mainstream Customer s will also benefit from the technology

23 Agenda Need for Food Traceability IBM s Smarter Food Initiative Food Traceability In Norway Matiq s Drive to Provide Fresher and Safer Food Supply Chain

24 Nortura/Matiq in Norway Nortura About 2 billion Euro in annual turnover Launching annually new products to Norwegian consumers Annual output at over tons of slaughter and tons of eggs Industrial operations in 41 locations across Norway employees HQ in Trondheim Owned by approx farmers organised in a co-operative Matiq 20 mill. turnover -> competence in food production 100 employees 100% owned by Nortura 24

25 Make RFID technology as simple and easy to use as a cellular phone. Provide both simple and advanced services based on real-time quality information based on RFID Provide an open concept for partners to use the information for value added services. Using open and widely accepted industry standards. Idea/Concept

26 LOCAL Sentral RFID as a Service Services EPCIS KNOWLEDGE OUT When/Why/What/Where/++ Various Data Aquisition (barcode, weight etc.) RFID Infrastruktur DATA IN

27 Services Track& Trace Dashboard Asset mngmt KPI s EPCIS Integration ERP Quality surveillance Supply chain mngmt

28 The SMART supply chain Track& Trace Dashboard Asset management KPI s Quality surveillance EPCIS Integration ERP Supply chain mngmt KNOWLEDGE Supplier Processing Plant Supplier Processing Plant Shipping Location Customer DC Receiving Facility Customer DC Shipping Location Customer Supermarket Receiving Facility DATA 28

29 INNOVATIONS and INSIGHTS Life cycle management Asset management Temperature monitoring (Shelf life calculation) Traceability (Food navigator, food authentication) Logisctics, Supply chain management Traceability information/epcis INFORMATION (ID/Sensor/business) Flow of obects Flow of objects 29 onsdag, 29. april 2009

30 Business Approach 1. A small fee for the infrastructure 2. A small fee for the transactions 3. A small fee for each functionality

31 Questions?

32 Thank You Himanshu V Bhatt, hvbhatt@us.ibm.com, Lars Sandtorv, lars.sandtorv@no.ibm.com, Geir Vevle, Geir.vevle@matiq.no

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