The Era That Never Was

John Lawn

At a NAWGA industry conference back in 1987, I remember watching and then writing about what was reported as a major, ground-breaking event. It was an agreement between the International Foodservice Manufacturers Association and the International Foodservice Distributors Association to support and promote the use of UPC bar coding in foodservice.

At the announcement, Nabisco Vice President of Marketing Jack Mitchell (representing IFMA) and Tom Perloff, president of New Jersey-based Tartan Foods (representing IFDA) shook hands on stage and promised that the agreement would usher in a new, efficient and information-rich age for foodservice.

Jack Mitchell had been carrying a stack of prototype labeled shipping cartons to industry events all that year, prosyletizing about the advantages UPC codes and bar coding would bring in this new era.

Operators would be able to scan cases of foodservice product at the back door, reducing labor costs and eliminating receiving errors. Distributors would be able to digitally track product from their docks through the warehouse, in their picking systems and on to delivery. Manufacturers would finally be able to obtain category management data like that available to the retail side of the food industry.

The years have passed. For a long time, the talk about bar coding’s advantages continued, but progress was slow. All of the players in the original announcement moved on.

Jack Mitchell retired from Nabisco more than a decade ago, while Nabisco itself was bought by Kraft Foods. Tartan was absorbed by Sysco. NAWGA merged with retail association FMI last year, while its foodservice division, IFDA, went on to become an independent entity.

There was a resurgence in interest in bar coding’s promise in the mid 1990s, when the "EFR" movement (Efficient Foodservice Response) gained steam. Although some EFR efforts may be paying dividends at the manufacturer-distributor level, the practical implementation of bar coding for foodservice end user applications hasn’t moved forward in real terms since that announcement over15 years ago.

Although bar code systems are widely used in other industries, from UPS and Fedex deliveries to the med-surge supplies delivered at many hospitals, the technology used in receiving foodservice cases at most operators’ back doors hasn’t changed in decades. While UPC codes appear on many cases, their presence is no where near the 98-99 percent required to make necessary application systems viable.

Receiving product at your back door? Get out a pencil, your original order and your packing list. You’ll be manually reconciling both of them by hand, just the way you did in the 1960s. If you should want to improve the productivity of your inventory systems by having staff scan product bar codes in your stockrooms and on your shelves—Fuggeddaboudittt! The channel support systems to make this possible just don’t exist.

And if you want to know which foodservice brands or products are selling or being used most widely by other operators like yourself, you’ll have to take your distributor’s word (or guess) about it. That’s because aggregate industry data about product movement just doesn’t exist in foodservice; and a lack of bar code data collection at the user level is one of the main reasons why.

What inspired this column was an article I saw in Business Week magazine that reported how retail giant Wal-Mart has decided to adopt a new technology as the successor to UPC codes, which were first introduced in retail back in the 1960s. The retail giant has announced that its top 100 suppliers will be required to begin using Radio Frequency Identification (RFID) tag technology in January of 2005.

RFIDtags will automatically transmit case information to inventory, transport and other system computers, including such data as the temperature at which product should be stored, where it is located at any given time (key to reducing theft and managing rotation) and when and where the specific item was manufactured.

Clearly, the retail side of the industry is preparing to move into a 3rd generation era in terms of product identification systems. Meanwhile, foodservice is still stuck where where retail was back in the 1960s. And operators pay a significant operational price for that stagnation.

For all the talk in our industry about "partnering," focusing on the customer and providing value-added customer services, this is one area where supply chain partners have simply let their operator customers down.

I’d be interested in feedback on this issue from all interested parties. Write, e-mail or give me a call. Your comments will help us explore the issue further in future columns.

JOHN LAWN
Editor-in-Chief