China's tainted-milk scandal has led to bans or recalls in 16 countries, including candy maker Cadbury, which announced a recall earlier this week after findings melamine in its Chinese-made chocolates.
Cadbury recalled 11 types of chocolate bars made at its factory in Beijing and sold in China, Taiwan, Hong Kong and Australia. Kraft Foods and Mars jumped on the list of recalls vowing to stop sales of Chinese-made Oreo cookies, M&Ms and Snickers bars.
Add H.J. Heinz Co. to the list, too. The company says it will stop using milk from China to reassure consumers its products are safe. Last week the company recalled 270 cases of baby cereal in Hong Kong. The company found 1.6 mg/kg of melamine in the batch of Heinz Intelligence Many Many Vegetable Cereal.
Tainted milk products from well-known Asian brands have killed four babies, sickening 54,000 children in China.
"This is an example of the need for companies to track and trace products from production to stores," says Ashley Stephenson, Reva Systems chairman. "It's no longer acceptable for a company to tell consumers and retail stores it doesn't know the lot number that the ingredients came from."
Many food and beverage companies experienced at least one product recall last year and more than 50% resulted in losses of at least $10 million, according to a recent study by AMR Research. The study, Traceability in the Food and Beverage Supply Chain, reveals that on average it takes 14 days to determine the need for a recall and 34 days to take action. Companies typically collect less than 40 percent of affected products -- most products have been consumed by the time this all takes place.
Stephenson says Reva works with a European chocolate maker and vegetable farmers that use RFID to trace and track supplies. The veggie farmer embeds UHF RFID tags on crates used to transport crops. Handheld scanners equipped with GPS technology read the tags.
The information feeding into the vegetable farmer's ERP system not only identifies the location of the lettuce and carrots in real time, as bundles travel through to processing plants, but provides data on the time, date, and even the field in which the crop had been picked. The tags also monitor temperatures of the produce on refrigeration trucks bound for retail stores.
One product recall and the CIO could potentially see an "enormous" return on investment (ROI), Stephenson says. Contaminated product found in a dry goods mill, for example, would require the company to dump an entire crop, losing tens of million of dollars in discarded products. But the liability from consumers becoming ill or dying could have even harsher, longer-lasting effects.
So, why haven't more companies bought into RFID deployments? While the industry is seeing more tests turn into deployments, the technology isn't cheap to install. Some systems cost upward of $1 million, though closed-loop supply chain systems have been known to run much less. "If you prevent one crop recall than you've paid for your investment many times over," Stephenson says.
The Associated Press reports that it's a worldwide scramble to figure out how far the contaminated milk spread and where it may end up next.