IET Sector Insights

Information in
food supply
chains

Overview
The organisation and regulation of the supply of safe
and nutritious foods is one of the key responsibilities
of a society in order to ensure political stability and
a thriving economy. The responsibilities are shared
among a large number of players and in the UK, the
systems occasionally break down into a food scandal.
Salmonella in eggs and horse meat and campylobacter
in poultry are just 3 examples where the system has
fallen over and consumers have lost faith in the food
they are eating. It is estimated that the horse meat issue
wiped 300m (Guardian newspaper) off of Tescos share
price, there are many more examples.

The role of information is vital in meeting the objective

of feeding the population at the same time as increasing
levels of efficiency, reducing waste, improving
traceability and still giving consumers choice over what
they eat.

www.theiet.org/design-production

Information in food supply chains 1


Key challenges and issues
1. Traceability
The ability to have complete visibility over the food
supply chains when they are becoming increasingly
complex and international in nature.
2. Availability
Maintaining the high level of food availability on retailer
shelves at the same time as making the supply chains
optimal in getting the food there efficiently and at a low
cost.
3. Waste
The need for a reduction in food waste at all points in
the supply chain to maximise the proportion of food that
ends up being eaten, as opposed to being wasted.
4. Consumer needs
The need to fulfil the consumer needs for information
about what they are eating and also their requirement
for reassurance of the product quality and safety.
Current technology
Information flows up and down the food supply chains
in many ways. Some information flow is automated and
moves quickly and other information is manual and
does not flow very far or very fast from the point where
the data was collected.
2 Information in food supply chains
IET Sector Insights
Example 1
EDI transmission of order quantity from Retailer to
Supplier
Orders are placed by retailers with their suppliers using
EDI (Electronic Data Interchange). The EDI transmission
often takes place as late as possible, to allow the
retailer to adjust their order and ensure that the stock
in their stores is at the correct level for the anticipated
consumer demand. This allows the retailer to minimise
in store waste and the same time as maximising their on
shelf availability.
Example 2
Traceability of raw materials in complex food products
A factory is required to maintain a system of traceability
on raw materials flowing through its process and
packing operations. So, a delivery of flour to a bakery
will be allocated a batch code and the progress of that
batch of material will be tracked through the factory, so
the final products produced from it will be known. In
the event of a problem being discovered with the flour,
it will be exactly known which products were made
from it, so that recall procedures can be efficiently
carried out. In most factories these systems are manual
and paper based, leaving them open to error and a
loss of traceability. Each part of the food supply chain
needs to carry out these systems, but it is only when
an incident occurs that they are fully tested and they
often fail, meaning that a larger recall has to be carried
out than if the systems were working automatically.
The operation of manual tracking systems in food
factories is becoming ever more complex, as the list
of allergens and other food safety concerns rise. So as
well as tracking the material, the factories now have to
track the hygiene routines of the machinery used on a
product. For example, to ensure that a filler used for a
meat product, is correctly cleaned before being used
on a non-meat product and documenting that cleaning
process so that it can be proven in the event of an issue.
The use of modern sensor systems can help food manufacturing
become more efficient. Monitoring of product quality to ensure
everything is correct and feeding information back up the production
line if adjustments are needed to the process. How can all the data
collected during the production and packaging of food products be
made available for analysis and process optimisation?

Current innovation areas
The pace of change in the food supply systems in
operation is accelerating. From food retailing right back
to the farms, there are changes where innovative ideas
are being implemented.
1. Changes in retail behaviours
The major retailers in the UK have realised that their
customers needs have changed. This has shown up in
several ways.
n The move to online shopping. The Institute of
Grocery Distribution are predicting that 12% of
all grocery shopping will be done online by 2019.
That is doubling the level of 6% in 2014. This has
great implications for the retailers but also great
opportunities for the whole supply chain.
n The move to smaller, more local, stores and more
regular top-up shopping. The massive variety of
foods that are possible to display and sell in a large
store becomes much more difficult in a smaller outlet.
All of the major retailers have a program of opening
more and more local stores. This means that the huge
variety of foods on offer in the out of town super stores
is being seen by fewer and fewer people. Shopping
in convenience stores is set to rise by 30% over the
next 5 years from its current level of 35bn per year.
Currently 18% of all food is supplied by smaller retail
outlets.
n The move to discounters from the traditional retailers.
Restricted choice and low prices, at the same time as
high quality, appears to be an attractive proposition to
consumers in a time of austerity in the UK economy.
These changes in the retail end of the supply chain
are having large impacts back up through the supply
chains. The move to discount retailers has prompted
a price war among the major retailers in an attempt to
protect their market share.
Information in food supply chains
IET Sector Insights
2. Big data
Research is progressing in the use of social media data
to spot trends in society. The possibility of spotting a
food poisoning outbreak by noticing a rise in google
searches or activity on Twitter, could feed back valuable
information to supply chains. Is an increased number
of Facebook invitations to bbq parties able to help the
supply chains for burgers and sausages?
3. Information flows in food factories
Increasingly, factories are buying equipment that
contains shop floor data acquisition and these sensors
are feeding into SCADA and other systems to help
monitor and control the process. Currently innovative
ways are being developed to interpret this data more
broadly and as a result, generate more knowledge of the
processing parameters and the root causes of issues.
Increasingly, there is a need for wider and deeper
automatic analysis of data from production and storage
processes within the supply chain to be able to have full
control.
Areas of opportunity
The use of information to improve a process is not a new
thing, but the use of new and linked information in the
food supply chains could lead to great improvements
in the optimisation of the whole chain, rather than
optimisation of the individual components of the chain.
1. Online shopping
The growth in online shopping is a great place to start
with supply chain optimisation techniques. Currently,
the first time that the supply chain has an opportunity
to know if a product has been sold, is when a product
is picked up by a consumer and taken through the
checkout. With online shopping consumers give us
notice of their need for a product. 24 or 48 hours
before the product reaches the consumer, they tell us
what they want. Currently this information sits in the
retailer systems and is not used to inform the supply
chain of the sale. Imagine a system where the farmer
and a packer know on Wednesday that a consumer
wants a pack of baby spinach delivering to them on
Friday evening. That gives 48 hours to respond to that
demand, rather than the current 4 or 5 hours. Currently,
orders from retailers arrive just a few hours before
despatch is required, so the farmer has to harvest based
on a forecast and the packer needs to guess how many
3

packs are needed. If the order has been over estimated,
then too much spinach will have been harvested
and packed. If too little has been estimated, then the
farmer has to rush spinach to the packer with special
vehicles and the packer has to change over production
lines. The industry has learned to cope with this kind
of situation by almost always over estimating, as the
implications of being late delivering or under delivering
to a major retailer are horrible to contemplate. The
over estimation causes waste and less fresh produce
reaching the consumer than would be the case if the
order was transmitted with 48 or 24 hours notice.
The optimisation of the whole supply chain would
be possible if there was sufficient time between the
consumer placing an order and the delivery being
required. The retailers could pass this optimisation
on to the consumer in the form of a discount if more
notice was given. This would encourage consumers to
plan ahead for a proportion of their shopping and could
have a great deal of impact on the supply chain, which
could reduce cost on the back of the efficiency savings
they are able to make. The online orders could be used
to measure the shape of the demand curve and so an
estimate for the total order of a product could be more
accurately predicted. With statistical analysis, it would
be possible to extrapolate from the online orders, the
total orders for a product. So if 1.5 % of the online
shopping orders for a Thursday contain 200g creamy
coleslaw, what does that mean for the total shopping
population on the day?
Keeping the supermarket shelves full of a wide choice of foods is a
major challenge to information systems. Will this shopper choose the
lasagne or the pizza for dinner tonight? How can that be accurately
forecast so there is a choice available to each shopper but not waste
when everyone wants Pizza.
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IET Sector Insights
2. The intelligent factory
Here is an opportunity to develop and implement linked
up data and information systems to create a factory that
is intelligent. Examples can be found below.
n Currently, when there is a problem in a food process
(say a loaf of bread is too dark in colour when it exits
the oven) the process is adjusted , either manually
or automatically, to compensate for the issue.
This feedback control is the way that most food
processes are controlled to keep the products within
specification. Over a period of weeks the process
drifts, with all of the compensating adjustments to
process that are taking place. Gradually, the process
becomes less stable, as all of the adjustments are
made to the minimum level to just bring the product
back into specification. Even quite small changes
in the raw materials or process can then cause the
product to fall out of specification very quickly. This
situation could be solved if there was more analysis
of process and raw material data from more sensors.
The true root cause of a dark colour bread exiting
the oven could be found and that cause could be
tackled and corrected leaving the process with all of
its inbuilt buffers for normal variation. By working with
imbedded statistical process control, the processes
would be more stable and able to deliver high quality
products with optimal efficiency.
n The use of networks of sensors within the process
could monitor and control the process and the
condition of the machinery. There is a reluctance
to load too many sensors into current processes
because the vast quantity of data that would
be generated would not be easy to analyse and
would hide what was going on inside a forest of
data. As a result of this thinking, data collection is
usually limited to certain critical control points and
some others necessary for operator safety. With
an intelligent factory, the data would be collected
and analysed automatically and with self-learning
algorithms the factory would know what good
looked like, in terms of the process and materials.
www.theiet.org/design-production

3. Consumer reassurance
Increasing demands from consumers to know more
about the food that they are eating, is one of the key
challenges for an increasingly complex and international
food supply system. Opportunities and commercial
advantage await food supply companies that are able
to be transparent in their food sourcing, processing
and packaging system, with the eyes of the consumers
looking at every step of the process. This will need to be
done at low cost, as consumers are unlikely to want to
pay for this transparency; but if information systems that
help control and regulate the supply chain are designed
with consumer transparency in mind, it should not
add additional cost to the system. The efficiencies and
reduced waste that will accrue from an integrated supply
chain working at optimal levels will be the real business
benefit.
n For a consumer to be reassured about their food,
there will be data and information required in all
aspects of the product. For example:
i. Freshness when was my cake baked?
ii. Ethics where was the coco sourced? How about
the eggs were they free range?
iii. Food Safety did the cake reach the correct core have been no out of stock situations - so the additional
temperature when it was baked? How about the
flour was it free of pesticide residues?
iv. Critical Control Points were all the CCPs met supplying companies and their suppliers would know the
during packaging?
Information in food supply chains
IET Sector Insights
Potential cross sectorial collaboration areas
The technology for innovation largely exists and the task
required here is to recognise the changes needed, so
that the food industry can easily apply it. One reason
the food industry is naturally cautious, is that it does not
possess the knowledge and skill to commission, install
and maintain systems of this nature. There is a real need
to ensure that the improved information systems add
opportunities for the companies using them and not just
add data that is never used. The use of whole supply
chain optimisation can only come about if the current
adversarial system is greatly diminished. In this way, it
is thought that lessons of supply chain optimisation can
be learned from the automotive sector, but lessons can
also be learned from some sectors of the food supply
industry. The current systems for managing supply
chains are sub-optimal, with each part of the chain trying
to improve their position with little regard to the position
of their customer or supplier in the chain. For example,
a supplier has a break down on a vital machine in their
factory. The order is nearly complete, so the decision is
taken to send the logistics vehicle a few products short of
the full order. The machine is repaired and the company
decides to make the missing product and send it on a
separate vehicle. It turns out that the retailer could have
survived without that additional product there would
cost was unnecessary. A move towards Vendor Managed
Inventory (VMI) with enhanced supply chain information
flows and transparency would have avoided that. The
sales position in the retailers stores and would be able
to judge if it was necessary to produce. This VMI system
is in use in automotive industries but would have to be
refined and very much improved, to be successful in food
supply chains.
Waste comes from many sources in a complex food production factory.
The need for reliable and robust machinery capable of high speed, high
quality manufacturing is important. The cost of technology to carry out
this role can be diluted over many millions of packs, so investment to
improve performance in the food manufacturing industry is required to
ensure the cost per pack is low. Does a factory manager want to invest
in a system to improve performance or pay for the waste generated in
the current system? The need for information is vital to make sure that
the correct decision is made.
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 IET Sector Insights

Recommendations
1. Involve all parts of the food supply chain in examining
what they would need from information systems to be
able to optimise the whole supply chain.

2. Carry out some feasibility studies into the use of online

shopping orders to predict the total demand for a
product with 24 or 48 hours notice.

3. As UK food supply systems are dominated by

The IET is in a unique position to bring together people
with the required skill, knowledge and experience to address
the long standing issues and explore the opportunities
retailers, they would be in a unique position to posed by the Food Supply system in the UK. Innovation in the
influence the supply chain. They are best placed to area of information management would lead to improved
take up the agenda of information flow and how it
communications and so a transformational change to some
can best be used to drive improved performance and
of the most complex supply chains in the world. Supply chain
traceability in the food manufacturing industry.
efficiency and waste are major issues to be solved and this
can only be achieved by bringing new ideas to the dinner
4. The UK currently has the best food supply system
in the world in terms of the complexity, variety and
availability of processed foods, but the advantages
of integrated information have yet to be developed to
table and the supermarket shelf.
Mike Dudbridge National Centre for Food Manufacturing
take the UK industry onto the next step of enhanced
efficiency and safety. Once this position is realised,
this knowledge can be shared across food supply
systems around the world. This insight has been written by Mike Dudbridge,
National Centre for Food Manufacturing.
Images courtesy of Mike Dudbridge.

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6 Information in food supply chains