The key to success in any line of business? Collaboration. This holds true in the private label industry where retailers, manufacturers and suppliers are dealing with global food supply chains that are becoming more and more complex. The quality and safety of food has always been at the forefront for food companies, but last year’s high profile food safety scares put food safety at the forefront of consumers’ minds as well. Supply chain collaboration is crucial in the event of a food safety crisis. When a contaminant such as Listeria or E. coli is detected, the amount of time it takes to pinpoint the cause and notify those affected could mean the difference between a low-level scare and the potential loss of millions of dollars, and most severely, lives.
Each year, Trace One conducts research in the food private label industry to gauge how supply chain partners are communicating and the efficiency of their processes. Participants are asked about the tools they use to communicate and share information, as well as how collaboration and transparency impacts respondents’ businesses and what they consider to be major collaboration challenges in today’s private label industry.
The biggest takeaway from last year’s survey was that, though participants can see the value of collaboration, their ability to communicate effectively and in real-time remains a challenge. Surprisingly, a large number of respondents said they cannot identify or collaborate with their direct supplier network. Nearly one in four rated their collaboration as “fair” or “poor,” and 43 percent say they still use offline tools such as spreadsheets and the telephone as their primary form of communication with their suppliers and manufacturers. The issue with using offline tools is that it often impedes on collaboration efforts because offline tools cannot be updated in real-time globally. Paperwork also tends to be less reliable than online tools, as it is easily misplaced and often difficult to quickly share across long distances.
Effective collaboration throughout the supply chain is critical to preventing and managing food contaminant outbreaks. The recent recall of Starbucks breakfast sandwiches is a good example of how effective collaboration prevented what could have turned into a national crisis. When traces of Listeria were found in a Starbucks production facility, the company was able to pinpoint the affected products and limited stores that sold the product and issue a recall in a fast manner. As a result, no illnesses have been reported to date.
Unfortunately, there are instances where identifying the source of contamination becomes a lengthy process, and as a result, the outbreak becomes more severe. The recent Dole Listeria outbreak began in September 2015, but the source of Listeria was not linked to Dole until late January 2016, after 15 hospitalizations over six states and one death. In other cases, such as the Chipotle E. coli outbreak in 2015, the source of the outbreak was never discovered and 55 people became ill, and consumer trust remains damaged.
Trace One’s survey also identified several barriers to collaboration that retailers, manufacturers and suppliers face. Forty-four percent identified dealing with multiple technologies as their biggest collaboration challenge, and nearly half of respondents said a lack of communication also posed a significant risk to handling food safety concerns. Trace One continues to monitor these barriers with its annual surveys, including the third private label collaboration benchmark survey, currently underway. This survey will continue to provide insight into supply chain communication, collaboration, visibility and the top challenges facing private label companies.
We’d greatly appreciate your opinion on private label practices again this year! Click here to take Trace One’s anonymous, global benchmark survey and contribute to further the industry’s Private Brand market knowledge.