The Benefits of Early Rule 204 Compliance for Grocery Retailers

When FDA announced that they were proposing a new rule to FSMA to advance farm-to-fork traceability across the fresh food supply chain, it was the first significant step they had taken to achieve the goals set forth by their New Era of Smarter Food Safety initiative. In the months following the announcement of Rule 204, FDA encouraged companies, associations, and individuals to submit comments with ideas to improve or clarify provisions within the proposed rule. These comments, alongside conversations iFoodDS has had with companies throughout the supply chain, have revealed that many grocery retailers are concerned about the challenges they’ll face on the path to compliance. iFoodDS acknowledges that becoming Rule 204 compliant is not an easy task for grocery retailers, but it doesn’t have to be a daunting one. Existing technology solutions like iFoodDS can help grocery retailers meet Rule 204 compliance more easily. What’s more, we believe that grocery retailers will see considerable benefits if they work towards compliance now, even though the rule won’t go into effect for a few years. They will also join a collaborative effort to increase transparency and visibility across the food supply chain, ultimately making food safer for consumers.

Key Concerns for Grocery Retailers

Overwhelmingly, the cost of implementing a traceability system is the biggest concern grocery retailers have around Rule 204 compliance. At iFoodDS, we understand that not every retailer has access to the same set of resources so total costs may differ greatly. However, we believe that the benefits of becoming compliant in the early stages of Rule 204 development will outweigh the costs. First, what types of costs are retailers looking at? As of today, many independent grocery retailers lack the technology to implement traceability throughout their organization, including scanning hardware, as well as lack support for implementing Voice Pick Codes in their warehouse management system.

Another key concern for grocery retailers is that they don’t have enough IT resources to update their current Enterprise Resource Planning (ERP) system or Warehouse Management System (WMS) to accommodate traceforward. Even with an updated WMS/ERP system, if a retailer is allocating too much time to scanning outgoing product, concerns around reduced efficiency in distribution centers arise. Some retailers are questioning whether lot level tracking at the store level will drastically slow down key processes or slow down receipt at the store.

However, current technology solutions like iFoodDS exist to ease these concerns. Our cloud-based platform enables retailers to accept ASNs directly from suppliers to then be monitored in an accessible online dashboard while preparing the warehouse to receive delivery. This can also be combined with existing EDI protocols. For the retailers who are concerned about their WMS/ERP system and lack of IT resources, turning to a cloud-based platform for lot level tracking from the supplier to the DC can help maintain levels of efficiency without putting too much stress on IT employees. Finally, the harmonized PTI case label includes a Voice Pick Code which can help facilitate tracking from the DC to the store. The Voice Pick Code was invented and included in the PTI label in order to enable efficient traceability to stores without scanning, and can be used with a voice picking system, displayed on a forklift, or printed on a pick sheet. Using Voice Pick Codes also has the added benefit of improving picking accuracy. All these solutions can work together to drastically minimize the impact tracking outgoing product can have on a retailer’s IT department and QC resources.

The Benefits of Early Compliance

Knowing that Rule 204 compliance is attainable for grocery retailers, what are the benefits of early compliance? Walmart, alongside some major grocery retailers utilizing the iFoodDS platform, can help answer this question. In 2018, Walmart launched the Walmart Food Traceability Initiative with the goal of achieving end-to-end traceability throughout their supply chain using blockchain technology. When asked why they were launching the initiative, former VP of Food Safety for Walmart and current Deputy FDA Commissioner Frank Yiannas said, “Our customers deserve a more transparent supply chain. We felt the one-step-up and one-step-back model of food traceability was outdated for the 21st century. This is a smart, technology-supported move that will greatly benefit our customers and transform the food system, benefitting all stakeholders.” iFoodDS has partnered with other major retailers who also had similar goals for themselves and the fresh food industry. One of the biggest benefits these retailers have experienced is that in the event of a recall, less product needs to be recalled since the retailer can pinpoint exactly where the problematic produce came from as well as the stores it was shipped to. Clearing DCs and stores of just the affected produce – instead of all product – results in significant cost savings. Another benefit is that at the store level, retailers who are Rule 204 compliant will also gain better shelf life management and better inventory management. They can do this by using the pack date or harvest date on the PTI label to ship the oldest product to stores first.

Today, several retailers are leading the charge in Rule 204 compliance, implementing Advance Ship Notice (ASN) requirements and establishing transparency and traceability processes from the grower to the retailer’s store. These retailers have not only demonstrated to the industry that compliance is attainable, but that there are considerable benefits to becoming compliant early.

Joining a Collaborative Industry Effort

By actively working towards Rule 204 compliance, grocery retailers will also join a collaborative industry effort to achieve end-to-end traceability. Many companies throughout the fresh food supply chain, including large grower-packer-shippers and processors, have already taken steps towards implementation. iFoodDS believes that FDA should recognize companies who are in early compliance with the rule and incentivize others to follow suit. One example of an incentive might be a collaborative recall investigation process, which “would provide an opportunity to identify sources and subsequent root cause analysis during and after an investigation without triggering legal recriminations, absent any malfeasance.” For industry members who are not yet in compliance with the rule but want to act now, implementing PTI is the first step. Ed Treacy, VP of Supply Chain and Sustainability for the Produce Marketing Association, says industry members should:

1. Label their cases with a PTI compliant case label at the time of packing or request that suppliers label theirs.
2. Develop the ability to send or receive electronic Advance Shipment Notifications (ASNs).
3. Plan on tracking the lot number on each shipment. Receive and send an ASN and/or Bill of Landing.

Compliance Means Putting the Consumer First

Many grocery retailers are worried they simply don’t have enough time to get everything in place to become Rule 204 compliant by implementation. However, iFoodDS believes that if retailers are proactive, they can successfully implement traceability throughout their company, no matter their size or starting point. They should look towards other retailers in the industry as role models who have demonstrated that traceability can be implemented effectively and smoothly. By working towards compliance now, retailers will also continue the work that many grower-shipper-packers and processors are also doing, making this effort a collaborative and supportive one. At the end of the day, consumers want a more transparent supply chain; they want to know their food is safe and high-quality. Taking steps to becoming Rule 204 compliant now means you’re committed to making the food supply chain safer and more transparent for everyone.

If these steps seem challenging, iFoodDS can help. Contact sales@ifoodds.com or request a demo to learn how our traceability solution can help you become Rule 204 compliant and provide you with transparency throughout your supply chain.

This material is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.