Thought for food: How digital is changing the food supply chain
Jeff Van Pelt is Principal, Global Food & Beverage Industry at OSIsoft. In this role, Mr. Van Pelt is responsible for industry strategy, segment development, thought leadership and ensuring customers drive value from their technology investments. Van Pelt is a 30-year veteran in the consumer products industry in a variety of roles. Prior to joining OSIsoft, he held industry executive positions at IBM and SAP.
New government regulation.
Those three words can often strike fear into manufacturers and other businesses. But sometimes regulation is necessary to ensure the quality and safety of certain products. Every year, 48 million Americans get sick, 128,000 are hospitalized and 3,000 die as a result of foodborne illnesses, and there has been no significant decline in food-related illnesses since 2006. In an effort to reduce these numbers, in January of 2011, then-President Barack Obama signed the Food Safety Modernization Act (FSMA) into law, tightening regulations around the United States food supply.
FSMA is changing the food industry, but not in a way that one might think. Tighter regulations have typically meant more work, but FSMA regulations are pushing the food industry toward broader digital transformation. Now, to ensure compliance while still optimizing production, organizations have turned to operational data, and the data have the potential to change the food industry.
Farmhouses for condos: The industrialization of the American food supply
To understand where the food industry is going, it’s important to understand the history. In the past 100 years, many Americans have traded rural towns for urban or suburban living. The agriculture industry industrialized between 1900 and 2000, and the number of workers involved in agriculture dropped from 41% to 2%.
Now, fewer farmers are using machines and automation to work larger fields, and farms have begun to use selective breeding to grow single crops or raise animals on a mass scale. But it wasn’t just field capacity that increased. Antibiotics and pesticides have become more prominent and fertilizer more synthetic, all in an effort to produce the most amount of food for the least cost.
These large-scale operations have more variables: more crops, larger processing facilities, wider transportation systems and prepackaged foods — all at unprecedented scale. There is more room for error and more opportunities for bad actors to poison the food supply. Not only that, but organic food is more expensive to produce, which has turned the food industry into a battle of “haves” versus “have nots.” To eat healthy in this market, a low-income family would have to spend 70% of the grocery budget just on fruits and vegetables, and recent studies strongly suggest that low-income children are at greater risk for contracting foodborne illnesses.
The $55.5-billion food safety problem
The risks within the current food supply are high for both food producers and consumers. As of 2014, foodborne illness cost the industry $55.5 billion a year, and a single outbreak can cost upward of $100 million per incident, not including reputation damage. It can also cost people their lives. In 2006, 53 people were sickened from E. coli after eating contaminated lettuce from Taco Bell, and another eight went into kidney failure. In 2009, 714 people became ill and nine died from eating PCA peanut butter infected with salmonella. The company is now bankrupt.
Typically, responses to these outbreaks are reactive, and more time is spent mitigating the incident — and tracing the source — rather than preventing them from happening in the first place. In response, Congress enacted FSMA, which added legislation around food growing and processing, subjecting the industry to additional documentation and stricter processes that should prevent future outbreaks. Initially, compliance is difficult for growers and suppliers, but these organizations are finding hope in digital transformation.
Digital transformation and the preventive approach
With the help of automation and sensor technology, food suppliers are not only meeting regulatory requirements, but these suppliers are laying the groundwork for diagnostic and root cause analysis. Using a data infrastructure system that collects, analyzes and visualizes data in real time from a network of sensors located on operational equipment, food production companies are finally gaining a complete view of the production process. Not only does this real-time information allow companies to efficiently tackle new FSMA compliance reporting, this increased visibility into food growing and production equips organizations with the right insights to quickly course-correct before it’s too late.
With automation solutions, notifications indicate when equipment is operating outside of normal parameters and can help growers and processors detect quality or contamination issues during production, allowing companies to make proper adjustments before contaminated food shows up in a local grocery store. For Tyson Foods, ovens are constantly cooking breakfast sausage inside of its Jimmy Dean sausage facility. With the help of sensor technology that monitors all four temperature zones within those ovens, Tyson can ensure that sausage is being properly cooked at the right temperature to keep its customers happy and illness-free.
In the event of contamination, automation solutions allow issues to be traced back to a specific batch or process, quickly identifying root cause and reducing the scope of recalls. For Hershey, tracking cocoa bean paste as it transfers from the conches to its tank farm is critical to its risk management strategies, and, with the help of software that is visualizing tank IDs, valve positions and pump run states, the company’s Malaysian plant can see the transfer of each batch through the system. Now, in the event of an issue, rather than simply pulling everything from the shelves, only affected batches are removed —significantly reducing food waste.
The future of food: Data-driven equality
While these brands are successfully using operational data on the plant production floor, the application of data goes far beyond a food processing facility. As the FSMA standards continue to set the bar higher for food safety, automation will move further up and down the food supply chain, giving increased visibility all the way from grower to consumer.
Farmers can use sensor technologies and analyze crop data right within their farms, allowing them to produce higher quality crops, prevent foodborne illness outbreaks and comply with non-GMO and organic standards. Data will show the source of origin, making genealogy track and trace possible, so consumers can make informed decisions about what they eat while increasing safety. On the logistical side, outbound delivery and cold storage facilities will be able to guarantee transport at certain temperatures from production all the way to delivery.
As the food industry further integrates data into everyday process to meet FSMA requirements, it will fundamentally change the American food supply. When the food industry can quickly identify issues to ensure that safety standards are met while optimizing production, the result is better quality food at a lower cost. As growers, processors, storage facilities and transporters use these data to make real changes, consumers will see real results. With visibility comes accountability, and that visibility will drive change to make food better, safer and more affordable for people everywhere.