Ready Or Not, Here It Comes - New Anti-Terrorism Legislation Has A Direct Effect On U.S. Warehouses And Distribution Centers

Traceability. It has been a hot issue for a while, and it's only getting hotter. In December of 2004, the U.S. Food and Drug Administration issued final regulations (specifically Section 306 of the Bioterrorism Act) requiring every warehouse or distribution center – regardless of size – that transports, distributes, receives, holds or imports any kind of food to maintain records to show where that product came from and where it's going to. Failure to comply can mean hefty fines or even imprisonment.

Section 306 mandates the "establishment and maintenance of records to protect the U.S. human food and animal feed supply in the event of credible threats of serious adverse health consequences or death to humans or animals." Article after article has been written on how traceability systems provide supply chain visibility down to the SKU level, improve worker productivity, increase inventory accuracy and turns, the list goes on. For the most part, it's been the larger, international companies that are making news on the traceability front. According to acting FDA commissioner Lester M. Crawford, "These records will be crucial for FDA to deal effectively with food-related emergencies, such as deliberate contamination of food by terrorists. The ability to trace back will enable us to get to the source of contamination. The records also enable the FDA to trace forward to remove adulterated food that poses a significant health threat in the food supply."

Depending on the shelf-life of the food, the record retention period for human foods ranges from six months to two years. Records for animal food, including pet food, must be retained for one year at the location where the activities occurred (or at a reasonable accessible location). To minimize the burden on food companies affected by the final rule, companies may keep the required information in a paper or electronic format. All businesses covered by this rule must comply by December 5, 2006.

The Tip of the Iceberg?

• Today, this traceability legislation relates only to the food industry. However, there are rumblings that this legislation could very possibly be just the first in a number of mandates that pertain to traceability – regardless of the product. If a product is used by a consumer, chances are it will need to be traced from origin to final destination.

Even with the required legislative mandate, many food businesses have not deployed a traceability system. Therefore, many businesses, large and small, are scrambling to meet the requirements of the new Bioterrorism mandate. Even though businesses realize that product traceability is critical for survival and can in fact improve their own ROI, study after study shows that few manufacturers, producers and suppliers (the so called "supply chain") can afford the high-tech, leading-edge traceability systems like the big box retailers who are creating their own traceability mandates. Small, mid-sized and even large companies are looking for an economical way to comply in this new legislative landscape.

It's no surprise that printer and scanner equipment manufacturers, 3 rd party systems integrators and consultants to the trade are anxious to get involved with this promising opportunity. However, complete "out of the box" solutions can be extremely expensive, if not overwhelming. Further, it is rare when vendors take a "holistic" approach to the problem. Many companies are now asking "is it possible to incorporate a traceability system that's both functional and economical?" The answer is a resounding "yes."

Taking Standard Technology to the Next Level
The simplest solution is to "slap and ship" or simply affix passive or active RFID tags on the product at the time of shipment. In the short term, many businesses adapt this approach in order to meet supplier mandates by their customers. Rarely do supplier mandates require visibility at the individual product level. Currently, most of the concentration has been directed to the case lot or pallet level. However, many companies would still like to incorporate their bar code scheme into the mix. Sometimes this is a viable solution, particularly when the item costs less than the current cost of a RFID tag ($0.60 to $1.00 per tag range, depending on volume).

• Datamax, a leading international bar code solutions company, states, "Bar code labeling is globally recognized as a fundamental technology that, when put into practice by all participants in the supply chain, is a highly efficient traceability system that can pinpoint the origin of the problem to a specific region, logistical provider, processing or packing facility." With all the press RFID systems have been getting lately, it's easy to forget that bar coding is still a vital part of any successful warehouse or distribution center. Contrary to popular belief, bar coding is not a dying technology. Bar codes will be used for years to come.

In conjunction with bar coding technology, Datamax has also created a printer with "smart labels" embedded with RF tags that enable instant identification of contents. Most consultants point to a hybrid approach and recommend that manufacturers bar code items with acquisition costs of less than $0.50 and provide a smart label (embedded antennae in label stock) at the case lot or pallet level.

Another important component in a successful warehouse system is a cubing and dimensioning system. Utah-based Quantronix is an innovative, problem-solving organization committed to the further development and cost-effective application of sensing technology in industry today. Quantronix manufactures a cubing and dimensioning system known as CubiScan. According to Quantronix, "The idea for the development of an automated, integrated cubing (dimension scanning) and weighing system first began with a need at U.S. Department of Defense supply depots. Their receipt of goods from vendors and inter-organization shipments required that military shipment labels disclose parcel dimensions and weight." When inventory arrives for storage, the CubiScan can be a huge asset in determining the optimal location to store the inventory, based on the remaining space in the warehouse. With a CubiScan system in place, any warehouse or DC will experience improved inventory management, thus leading to improved product traceability.

Much More to Come
Expect more traceability legislation to be written and enforced. In order to meet these new demands, technologies are being deployed in pursuit of the universal remedy – an integrated, real-time information network that will improve the business practices of every link in the supply chain.

SOURCE: Rice Lake Weighing Systems