The Global Food Supply Chain

New market opportunities mean big business, and big risk.


According to Kam Quarles, director for legislative affairs at McDermott Will & Emery LLP (and a member of Food Logistics’ editorial advisory board), says that while the World Trade Organization (WTO) and various free trade agreements (FTAs) have addressed tariff barriers, “a lot of the future impediments (to global trade) may transition to phytosanitary barriers.” He remarks, “We spend a great deal of time working on pest and disease issues.”

And, while the U.S. “vigorously adheres to international protocols surrounding sanitary and phytosanitary measures,” which must be based in sound science, “there is a lot of variation from country to country,” says Quarles. “One country’s definition of ‘sound science,’ especially if they have a very active political constituency, may differ widely from the U.S.”

For the moment, Quarles is keeping a close watch on “a new raft of rules” that will be released shortly by the U.S. Food and Drug Administration, which promise to affect foreign suppliers seeking access to the U.S. market, as well as the U.S producers themselves.

He also is hearing a lot of concern from food clients over the recent announcement by the White House to consolidate several trade agencies under one entity.

“For agriculture exporters, in particular, it caused some concern simply because we’ve got some very good people at the USTR (U.S. Trade Representative’s Office) who know agriculture inside and out. The USTR is also a very nimble agency. Along with their counterparts at the U.S. Department of Agriculture and the Foreign Agriculture Service, they work very efficiently to deal with trade related issues. Some of them are large scale issues like the implementation of a free trade agreement or the WTO’s Doha Round, and some of them are smaller, like a shipper who has 10 containers of agricultural products that have gotten hung up in a port somewhere and needs help getting them released.”

 

Transparency as a competitive weapon

It’s been said many times that every business threat is an opportunity. When it comes to the proliferation of rules and regulations pertaining to the food supply chain, this truism is spot on.

Of course, while technology tools that boost visibility and transparency are the first step in “keeping regulators off your back,” acknowledges Sean Robinson, global industry manager, food and beverage, for GE Intelligent Platforms, the more evolved companies also view transparency as a “competitive weapon.”

Although a host of Chinese companies have been implicated in recent years for infractions that have hurt the credibility of their products in foreign markets, the mindset of that country’s government and food companies has begun to change, Robinson says.

Simply put, “They’re trying to be a better trading partner,” he explains. It makes more sense to “offer a clearer path to ingredients, packaging, and other critical information of interest to foreign buyers, while at the same time avoiding inspectors tromping through their factories on a regular basis.”

Robinson describes GE Intelligent Platforms’ solutions as the “backbone for data in the factory.”

The solutions “make it possible to tie in lots of different categories of information,” he says, “all of which contribute to very robust traceability, capability, and risk management. But, it also delivers the kinds of analytics that allow companies to look for process inefficiencies, equipment inefficiencies, or other breakdowns that are causing excessive losses of materials.”

For example, “A quality manager can quickly see the ingredients that went into a product and immediately see whether a critical process like cooking temperatures or mix rates were where they should have been. Whereas a continuous improvement manager, using the same backbone, is going to be provided with the data surrounding what happened inside that oven, that are going to be what he needs to know in order to tune the oven so that the right amount of natural gas is getting burned and the oven is operating more efficiently.”

Robinson adds, “We’ve also got very particular pieces that make it possible to integrate both inbound data from a supplier, as well as push data up to an enterprise system or to an external system. That way, a major candy manufacturer can take inbound supplier data from its chocolate or peanut providers, for instance, and tweak the way they run their own factories so that they know the best way to re-melt that chocolate to get a properly tempered coat or the best way to re-blanch or roast peanuts to ensure they’re not carrying any salmonella further down the supply network.”

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