Benefits of traceability in fish supply chain – case studies

Abstract

Purpose
– The purpose of this paper is to investigate how the seafood industry perceives benefits of traceability implementation. Furthermore, ex ante cost‐benefit analyses (CBAs) of adopting new traceability systems are conducted for two firms, operating at different steps of the seafood supply chains, to obtain preliminary knowledge on the net benefits of the project and on how costs and benefits are distributed among the actors.

Design/methodology/approach
– This is a case‐based study.

Findings
– The surveyed companies perceive improving supply chain management as the most important benefit of traceability. Other benefits are increase of the ability to retain existing customers; product quality improvement; product differentiation; and reduction of customer complaints. However, the quantifiable benefits are perceived differently by the actors at different steps in the supply chains, e.g. implementing radio frequency identification (RFID) tags on pallets in the seafood trading company case study shows tangibly quantifiable benefits.

Originality/value
– The paper is useful for both practitioners and academics regarding perceived benefits of traceability in fish supply chains. The research provides initial insight into seafood companies' perspectives on the benefits of adopting RFID‐based traceability solutions. The paper suggests that the financial burden of implementing traceability may be borne by the processing firms, while gains are reaped by firms in the distribution business closer to the end consumer. This could provide a partial explanation as to why traceability has been slow to gain ground as a visible value‐adding marketing tool, and is mainly being driven by food safety regulations.

Full text

British Food Journal
Benefits of traceability in fish supply chains – case studies
Nga Mai Sigurdur Gretar Bogason Sigurjon Arason Sveinn Víkingur Árnason Thórólfur Geir Matthíasson
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To cite this document:
Nga Mai Sigurdur Gretar Bogason Sigurjon Arason Sveinn Víkingur Árnason Thórólfur Geir Matthíasson,
(2010),"Benefits of traceability in fish supply chains – case studies", British Food Journal, Vol. 112 Iss 9 pp.
976 - 1002
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Thomas Kelepouris, Katerina Pramatari, Georgios Doukidis, (2007),"RFID-enabled traceability in the
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dx.doi.org/10.1108/02635570710723804
Henrik Ringsberg, (2014),"Perspectives on food traceability: a systematic literature review", Supply
Chain Management: An International Journal, Vol. 19 Iss 5/6 pp. 558-576 http://dx.doi.org/10.1108/
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Dimitris Folinas, Ioannis Manikas, Basil Manos, (2006),"Traceability data management for food chains",
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Benefits of traceability
in fish supply
chains – case studies
Nga Mai
University of Iceland, Reykjavik, Iceland and
University of Nhatrang, Nhatrang, Vietnam
Sigurdur Gretar Bogason
University of Iceland, Reykjavik, Iceland and
MarkMar ehf, Reykjavik, Iceland
Sigurjon Arason
University of Iceland, Reykjavik, Iceland and
Matis ohf, Reykjavik, Iceland
Sveinn Vı
´kingur A
´rnason
University of Iceland, Reykjavik, Iceland and
MarkMar ehf, Reykjavik, Iceland, and
Tho
´ro
´lfur Geir Matthı
´asson
University of Iceland, Reykjavik, Iceland
Abstract
Purpose – The purpose of this paper is to investigate how the seafood industry perceives benefits of
traceability implementation. Furthermore, ex ante cost-benefit analyses (CBAs) of adopting new
traceability systems are conducted for two firms, operating at different steps of the seafood supply
chains, to obtain preliminary knowledge on the net benefits of the project and on how costs and
benefits are distributed among the actors.
Design/methodology/approach – This is a case-based study.
Findings – The surveyed companies perceive improving supply chain management as the most
important benefit of traceability. Other benefits are increase of the ability to retain existing customers;
product quality improvement; product differentiation; and reduction of customer complaints.
However, the quantifiable benefits are perceived differently by the actors at different steps in the
supply chains, e.g. implementing radio frequency identification (RFID) tags on pallets in the seafood
trading company case study shows tangibly quantifiable benefits.
Originality/value – The paper is useful for both practitioners and academics regarding perceived
benefits of traceability in fish supply chains. The research provides initial insight into seafood
companies’ perspectives on the benefits of adopting RFID-based traceability solutions. The paper
suggests that the financial burden of implementing traceability may be borne by the processing firms,
while gains are reaped by firms in the distribution business closer to the end consumer. This could
provide a partial explanation as to why traceability has been slow to gain ground as a visible
value-adding marketing tool, and is mainly being driven by food safety regulations.
Keywords Cost benefit analysis, Agricultural and fishing industries, Europe, Vietnam, Chile,
Supply chain management
Paper type Case study
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0007-070X.htm
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British Food Journal
Vol. 112 No. 9, 2010
pp. 976-1002
qEmerald Group Publishing Limited
0007-070X
DOI 10.1108/00070701011074354
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1. Introduction
Traceability has been applied in food supply chains for several years in compliance
with legislative and market requirements, such as EC Regulation No. 178/2002 (EU,
2002) and US Bioterrorism Act PL107-188 (2002).
Good traceability in food supply chains has the potential to reduce risks and costs
associated with food borne disease outbreaks (Hobbs, 2003), e.g. reduce their magnitude
and possible health impact; reduce or avoid medical costs; reduce labour productivity
losses; reduce safety costs arising from a widespread food borne illness (Can-Trace,
2007). Reduction of costs associated with product recalls, e.g. reduced recall scope and
time, is considered as another main economic incentive for implementing traceability
(Golan et al., 2004; Can-Trace, 2007). Traceability is also found beneficial in term of
reducing costs associated with maintaining consumer or market confidence in product
(Can-Trace, 2007). In addition, traceability, especially electronic-based, is the potential to
increase production efficiency, e.g. reduce cost of procurement, movement, and storage;
implement just-in-time management of manufacturing (Moschini, 2007); improve
planning, lower cost of distribution systems, expand sales of high-value products or of
products with credence attributes (Golan et al., 2004).
The provenance of the sustainable origin of the food products could more easily be
tracked and traced in the supply chain, which gives an added economic benefit due to
marketing possibilities otherwise not accessible at demanding clients. The more
environmentally concerned consumers are willing to pay a premium for, e.g. fish
products sourced from fisheries that are managed in a sustainable manner. Recently,
another important value concept in the market has increasingly gained importance that
is linked to the sustainability issues. This is the carbon footprint (food miles) associated
with a product (Intrafish, 2009), and a good traceability system is necessary to prove the
more positive “green nature” (Tyedmers et al., 2008) of the product in the marketplace,
which again is a decision element for consumers for selecting a product with a proven
more favourable green image (CarbonTrust, 2008), and usually willing to pay a premium
for the assurance of a product by a recognizable standard needing a reliable traceability
system for its verification. Furthermore, fair trade issues need tracking and traceability
for proving origin and provenance of the claims. By implementing traceability, actors of
supply chains are able to comply with laws and regulations of the markets and to meet
demand of customers, which in turn will help to remain as well as extend their markets
(Souza-Monteiro and Caswell, 2004).
Another economic reason for adopting traceability systems is to eliminate liability
risks associated with unsafe food problems (Hobbs, 2003) which may result in financial
damages such as penalties, loss of trade, damage to reputation, or loss of brand name
capital (Can-Trace, 2007). Good traceability systems decrease the probability of a
supplier being found wrongly liable for a certain food safety problem, and would give
the opportunity to improve the overall level of food safety. Firms may benefit from
traceability systems associating with quality and safety assurance mechanisms,
because they may have the possibility of proving with well-documented
manufacturing system and practices that they do not present a risk when safety
issues do arise. Those firms will be less vulnerable to liability than others who cannot
prove that they do not have a given public health problem (Souza-Monteiro and
Caswell, 2004).
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Improving traceability at supply chain level can potentially reduce the costs to
downstream actors (e.g. retailers or processors) of monitoring the activities of upstream
steps (e.g. raw material supply) (Hobbs, 2003; Can-Trace, 2007).
Readily verifiable traceability information can lead to a reduction in information
costs aimed towards consumers associated with quality verification (Hobbs, 2003,
2004). For example, enhancing labelling by identifying credence attributes related to
food safety, environmentally friendly production practices, assurances about feed,
animal welfare, and product differentiation can result in reduced costs of acquiring
information for the consumer.
The benefits of implementing traceability for the companies can be grouped into the
following categories: market benefits; recall cost reduction, reduction of liability claims
and lawsuits; and process improvement (Can-Trace, 2004; Poghosyan et al., 2004;
Sparling et al., 2006; Chryssochoidis et al., 2009; Wang et al., 2009a). In addition, applying
electronic-based traceability systems can also save labour costs compared to
paper-based systems (Buhr, 2003; Alfaro and Ra
´bade, 2009; Chryssochoidis et al., 2009).
However, so far there have not been many scientific publications on the benefits
of traceability from the seafood companies’ views, and neither are any empirical
cost-benefit analyses (CBAs) in this area. The purpose of this study is to bridge the
above gaps by investigating the perceived benefits of traceability (both qualitatively
and quantitatively) from the seafood companies’ perspectives.
Implementing traceability at supply chain level is restricted by the uneven
distribution of costs and benefits among the actors of a chain (Can-Trace, 2004).
Therefore, this study also investigates the cost and benefit elements of traceability
solution(s) in different chain steps. Two separate ex ante CBAs of adopting new radio
frequency identification (RFID)-based traceability solutions have been conducted for
two firms at different steps of the fish supply chains. The aim is to obtain some
preliminary knowledge on the net benefits of the project and on how costs and benefits
are distributed among the actors; and to come up with some suggestion to improve the
cost/benefit distribution.
This paper is organised as follows. Section 2 is the literature review on attitude of food
companies towards traceability implementation and benefits, which is ended up with a
summary table (Table I) serving as a conceptual framework for the methodology of this
study. Section 3 provides the background information of the companies-participants in
the study. Section 4 presents the data collecting and analysing methods. Section 5
presents the findings of this research on the perceived benefits of traceability
implementation from the seafood companies’ perspectives, as well as detailed ex ante
CBA results of the two case studies. Finally, Section 6 summarised the main findings,
indicates the limitations of the study, and avenues for future work.
2. Literature review
From the firms’ perspectives, benefits of traceability can come from trade effects (higher
product price, extending current, and new markets); from reducing recall impact; from
reducing costs of liability (clams and lawsuits); from process improvement (reduction of
inventory, spoilage reduction, process improvement, quality improvement, others)
(Can-Trace, 2004; Moschini, 2007).
Pouliot and Sumner (2008) indicate that increased traceability is seen as a tool to
improve food safety, which in turn increases consumers’ willingness to pay (WTP) for
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a safer product. Downstream firms may use traceability to shift liability upstream and
reduce the chance of food safety incidents.
According to Olsson (2008), the driving forces to implement traceability in the entire
chain actors can be recall minimization, retaining market shares, protection of the
trademarks, and strengthening reputation. He also noted that in a food supply chain,
producers were the most often blamed when something upset consumers.
Hobbs (2004) indicated that the role of traceability is to trace food back to the source
in case of a food safety problem to identify and withdraw the affected products; to
locate the source of a problem and assign liability. Traceability also reduces quality
verification costs for consumers.
Frederiksen et al. (2002) stated that business reasons for traceability are efficiencies,
damage control, recall rate, brand name protection, and others. The authors also gave
Benefit categories
Quantitative (tangible)
Qualitative
(intangible) Market Recall Liability Process Labour
Market recovery improvement X
Market and revenue growth X
Product price-premium X
Less frequent recalls X
Less severe recalls X
Better management of recalls X
Less frequent claims and lawsuits X
Less severe claims and lawsuits X
Liability insurance cost reduction X
Inventory turnover improvement X
Spoilage/out of date cost reduction X
Yield improvements X
Labour cost savings
Regulatory and legislative
compliance XX
National security X
Enhanced customer confidence/trust X
Litigation risks mitigation or
elimination, e.g. ability to shift the
responsibility to other(s) X
Resolution of track trace data gaps X
Company reputation – customers X
Company reputation – consumers X
Company reputation – government
and public X
Improved customer service X
Company reputation – suppliers X
Being technological proficient and an
industry leader in new technologies
and processes X
Sources: Smyth and Phillips (2002); Buhr (2003); Karkkainen (2003); Can-Trace (2004); Poghosyan et al.
(2004); Sparling et al. (2006); Pouliot and Sumner (2008); Chryssochoidis et al. (2009); Wang et al. (2009a)
Table I.
Summary of traceability
benefits
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an example of loss of consumer confidence in the product of Perrier – bottlers of
mineral water, which led to a loss of its market share from 60 to 15 percent worldwide.
In a study by Poghosyan et al. (2004) on motivations of traceability implementation
and its benefits, focus interviews with the representatives of 17 international
agribusiness corporations from Argentina, Australia, Germany, The Netherlands,
South Africa, Switzerland, Zambia, the UK, and the USA were used. It was found that
the drivers for adopting traceability were: to improve supply chain management
efficiency, to meet food quality target, to reduce risk and liability by improving their
operations, to comply with regulatory requirement, to gain competitive advantages
and better market access, to ensure consumer confidence and protect their brand
reputation. Furthermore, the interviewees indicated that the main benefits of
traceability were product and process improvement; decrease of production costs,
diminishing risk of food recalls and incidents, protection of brand name.
Wang et al. (2009a) studied the incentives and benefits of Chinese fishery processing
company in adopting traceability system. The companies-respondents were asked
to use a five-point Likert scale, from “very unconsentient” to “very consentient”,
in answering the survey questions. It was found that product quality improvement,
need for healthy consumption, and management improvement were the most common
incentives for traceability implementation. Furthermore, for private and joint-venture
firms, to meet the customers’ requirements, to extent international and domestic
markets, and to differentiate products were also important drivers.
Sparling et al. (2006) studied the drivers behind the traceability implementation of
Canadian dairy-processing plants. The authors used in-depth, semi-structured interviews
with quality assurance managers in the first stage to form the input designed for the mail
survey in the second stage. In one part of the questionnaire, the companies were asked to
score 19 potential motivators of implementing traceability on a five-point Likert scalefrom
1¼“very unimportant” to 5 ¼“very important”. These authorsfound that three principle
factors related to product problems (e.g. to reduce the risk of a product problem accruing,
to reduce recall impact and risk of recalls); to market drivers (e.g. to meet customer
requirement, to reposition products and/or increase share of the current market, to access
new market, to obtain higher product price); and to legal/regulatory drivers (e.g. to reduce
product liability, to meet regulatory requirements) were the most important. It was also
found that 60 percent of 130 companies-respondents considered that benefits of
implementing traceability exceeded costs and 27.8 percent considered that the benefits
exceeded expectations. Interestingly, after implementation of traceability, these
companies-respondents perceived that improved perception by customers, regulators,
and consumers were the most important; while repositioning in current market, obtaining
higher prices, and gaining access to new markets were somewhat unimportant.
A survey on economic implications of voluntary traceability was conducted within
the meat processing, fruit and vegetable, dairy, wine, olive oil, baking, and feed sectors in
Italy (Banterle and Stranieri, 2008). A multiple choice, rating scale format was used. The
results show that the firms benefit from traceability through product differentiation,
reduction of product recalls, precision identification of liability among the actors of the
supply chain, and supply chain improvement.
A review on traceability from a US perspective in the livestock, poultry, and meat
industries by Smith et al. (2005) has shown that traceability is used to assure the food
origin, to control and eradicate foreign animal diseases, to protect their national livestock
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population, to comply with international customer requirements and country-of-origin
labelling requirements, to improve supply chain management, to facilitate value-based
and value-added marketing, to effectively locate and correct the source of food problems,
and to minimize product recalls and improve crisis management.
Ward et al. (2005) show that traceability has made Canadian beef more acceptable
than if it is non-traceable after the American bovine spongiform encephalopathy (BSE)
Crisis in December 2003.
According to Leat et al. (1998), traceability in the Scottish agri-food industry was
seen as a competitive advantage. The reasons for adopting traceability system were
consumer assurance about the food origin and safety; ability to identify the source of
infected or substandard product; disease control and residue monitoring; supporting
measure verification; compliance with the labelling regulations; and for the beef
market, lifting of the export ban on British beef and beef products.
Alfaro and Ra
´bade (2009) investigated the traceability benefits of a Spanish
vegetable firm where computerised traceability system was used. In-depth interviews
with multiple employees of the firm were conducted using semi-structured
questionnaire. In the production, warehousing, and distribution areas, it was found
that the traceability system helped to increase production twice with the same number
of employees; reduce the disruption in productive process, 90 percent; reduce indirect
costs, 20 percent; increase warehousing capacity, 10-15 percent; reduce safety stock,
20-30 percent; and reduce devolution of lots (i.e. less compensation fees), 80 percent.
In addition, several qualitative benefits also listed, such as improve in operational
procedure, increase the customers trust, etc. The company saw their traceability
system as a tool for continuing improvement.
Chryssochoidis et al. (2009) have developed a cost-benefit evaluation framework of an
electronic-based traceability system, using WaterCo natural mineral water company as
a case study. Questionnaire to the company’s executives composed of questions with
1-7 value scale to choose/answer. Benefits of the electronic-based traceability system can
be seen as labour cost savings; asset and operating cost savings; inventory
improvement; savings from better recall and risk management; supply-side
management improvement; and compliance with regulations.
Buhr (2003) studied the role of electronic supply chain traceability in European meat
and poultry processing firms. The study included site-visits and interviews of key
personnel at each stage of the process, from feed manufacturing through retail. He found
that the likely reason for adopting electronic traceability was to reduce information
asymmetry within the supply chain. Several incentivesfor traceability were reported, such
as reducing labour, improving accuracy, and avoiding error of human input. In addition,
electronic traceability helped to reduce food safety and recall costs, for example, Navobi
calf-milk replacer manufacturer through their traceability information systems was able
to save over $100,000 in recalls and recovery costs from a Salmonella outbreak. The
electronic traceability system also helped toimprove the processing process, for instance,
a Norwegian slaughtering plant called Gilde Norge using traceability incorporating with
a visual grading system made them able to add 5-7 percent to the final meat yields.
The total benefits for Sainsbury’s (retailer store) with a full-scale implementation of
RFID tagging on chilled products (without supplier participation) were estimated to be
£8.5 million a year, of which savings from depot inventory control was £130,000; from
store receiving was £294,000; from stock/code check was £2,556,000; from
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replenishment productivity was £1,425,000 (primarily in store); and from stock loss
was £4,117,000 (primarily in store) (Karkkainen, 2003).
It was shown that implementing RFID logistics system(s) could reduce the loss rate
of products from 0.05 percent (as in conventional logistics systems) to 0.01 percent;
reduce misrecognition rate of products from 0.1 to 0.01 percent; and improve logistics
processing rate from 0 to 10-30 percent (Kim and Sohn, 2009).
The benefits of traceability can also be reflected through the WTP for traceable food
products.
Experimental auction method was used to determine Chicago and Denver
consumers’ preferences for steaks (Umberger et al., 2003). The consumers were asked
for visually evaluating and bidding on two steaks, which differed only in package
labels. Most of the respondents were willing to pay average premiums of about
19 percent for the US-labelled steak. One of the reasons that caused the studied
consumers to prefer US-guaranteed beef over imported beef was a fear of meat from
specific countries that had BSE outbreaks.
Premiums for “US Certified” label obtained from the regional Colorado study
(Loureiro and Umberger, 2003) were 38 percent for steak and 58 percent for hamburger,
which is much higher than those above studies.
It was also reported that US consumers were willing to pay a premium $1.899/lb of
steak more for traceability information in the label (traceable to the farm where the
animal was produced) (Loureiro and Umberger, 2007).
Results from a laboratory auction market study at the Utah State University
(Dickinson and Bailey, 2002) show that US consumers may be willing to pay for meat
traceability, transparency (e.g. assurances on animal treatment), and extra safety
assurances (e.g. extra tests conducted for Escherichia coli or Salmonella for beef or pork,
respectively). Average premium for the roast beef sandwich with basic meat traceability
is $0.23, with assurances on animal treatment is $0.50, with extra assurances of food
safety is $0.63, and with all those three attributes is $1. For pork (ham sandwich), the
WTP was $0.50 for basic meat traceability, $0.53 for assurances on animal treatment,
$0.59 for extra food safety assurances, and $1.14 for all three attributes.
Experimental auction study in Saskatchewan and Ontario showed that Canadians
would will to pay a premium of less than 10 percent for traceability on a Cnd$2.50 beef
sandwich (Hobbs, 2003). Another study in Canada using experimental auctions (Hobbs
et al., 2005) showed that customers were willing to pay Cnd$0.27 on average for
traceable ham/pork sandwich, accounting for 4.9 percent premium over the base
sandwich value of Cnd$2.85. Both of the studies pointed out that traceability alone
(without quality verification) has limited value to individual consumers. Combining
traceability with quality assurances is proved to have potentially higher value.
Interviews were conducted on 169 Italian consumers after their purchase of extra-virgin
olive oil in a supermarket and they suggested that the lack of traceability produced a welfare
loss approximately e1perlitreofItalianoilpurchased(Ciciaet al.,2005).
An on-site questionnaire survey conducted in Beijing, China regarding consumers’
attitude toward traceability (Wang et al., 2009b) shows that 60.1 percent of the
consumers are willing to pay a positive amount (up to 10 percent) for traceable fish
products to increase safety. In average, the price-premium is about 6 percent.
Diverse consumers’ WTP for traceable products in different European countries
(Germany, France, Italy, and Spain) (van Rijswijk et al., 2008) may indicate that
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traceability contributes to improving consumer confidence, but primarily in an indirect
manner through the general benefits perceived such as quality labels.
From the literature review, the benefits of traceability from the companies’
perspectives can be summed up and considered as qualitative (intangible) or
quantitative (tangible). Qualitative (intangible) benefits here are those that are infeasible
or difficult to be quantified and assigned monetary values; qualitative (tangible) ones, in
the other hand, can be monetised (Boardman et al., 2006). Quantitative (tangible) benefits
in turn can be classified into five categories: market benefits (market), savings from
recall costs (recall), savings from liability costs (liability), savings from process
improvement (process), and labour cost savings (labour) (Table I).
3. Background
A survey on the qualitative benefits of traceability was carried out with different
fisheries companies in the European Economic Area (EEA), Vietnam, and Chile. They
are operating at one or more different steps of supply chains, namely raw material
supply, processing, transportation, trading, and wholesalers.
Interviews on the quantitative benefits of changing to new traceability solution(s)
(e.g. RFID based) were conducted with eight fisheries companies. Two of them are
processing companies (one Icelandic and another Chilean); the third one is an Icelandic
trading company; and the other five are Spanish wholesalers, four of which have
business only in domestic markets, and the fifth one has 80 percent domestic business
versus 20 percent in the EU markets.
Two CBAs were performed with seafood processing and seafood trading companies.
The processing company is a small enterprise with two branches, one in Iceland and
another in France. Its yearly turnover is about e10,000,000; number of employees is 50.
It produces finished seafood delicatessen in fresh, frozen, smoked, and/or salted form.
This company has been practicing paper-based traceability for many years, and is
interested in implementing the radio frequency-time temperature indicator (Rf-TTI)
label, which is a coupled TTI and RF technology, on each master bo x. The box size varies
from 1 to 17.7 kg. Annual trade volume of products intended for the new traceability
solution is 450 ton in average. In the CBA, box size of 1 kg is used for the calculation.
Regarding the trading company, its headquarter is located in Iceland; other
branches are in several EU countries (such as Germany, France, Spain, Greece), in the
USA, and also in Asia. It deals with sales and marketing of seafood products (frozen,
fresh, salted, dried, etc.) from producers to worldwide customers (for value-added
processing, wholesalers, distributors, retail chains, restaurants, etc.). This company
has a yearly turnover of about e400,000,000; and 70 employees. Its current traceability
is paper-based, electronically stored, and also using bar code for some products. The
company is willing to apply a RFID tag on each pallet. As the production volume, box,
and pallet size vary, the CBA was assumedly calculated for an average annual trade
volume of 10,000 product ton; box size of 3 kg; and pallet of 100 boxes.
4. Methodology
4.1 Surveys
Three different types of questionnaires were used during the study. First, a short
questionnaire (Appendix) was sent out in December 2008 to seven technology
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developing partners to get the costs of traceability systems/solutions, two answers
were received.
Second, another questionnaire with seven sections and 21 questions (Appendix) were
used to interview at one seafood processing and one seafood trading companies in Iceland
to get the quantitative benefits of implementing traceability systems/solutions. The first
section of the questionnaire asks for general information about the companies and their
attitude toward a new traceability system/solution. From the second to the sixth sections,
the interviewees were asked to quantitatively estimate their perceived benefits of the new
traceability system/solution by five above-listed quantitative benefit categories (Table I).
In the last section, some more sensitive questions were asked, such as the company size
and yearly turnover. The same questionnaire was sent to Chile and Spain for interviewing
the fisheriescompanies there, one response from Chile and five from Spain were obtained.
The interviewees were either chairmen, or managerial staff of the companies who know
their production and business well. The interviews took place in December2008, January
and February 2009. The questionnaire was e-mailed about one month in advance to the
companies for preparation. Each interview took about 45-60 minutes.
Information gathered from the first and second survey was to be used in the CBA
analysis.
Finally, to investigate a broader range of companies on their attitude toward traceability
implementation and benefits, an on-line questionnaire was launched in January and
February 2009 using a five-point Likert scale (from 1 ¼“very unlikely” to 5 ¼“very
likely”, Appendix). The questionnaire is adopted and modified from the one used in our
project for Chinese seafood industry (Wang et al.,2009a,b).Inonepartofthequestionnaire,
the companies were asked how they qualitatively perceived benefits of the implementation
of traceability systems/solutions by rating their answers. Therefore, it is worthy to notice
that “qualitatively” here is the way the companies perceived the benefits. It does not mean
that all the benefits listed in the questionnaire cannot be monetised. The studied group was
seafood companies (trading, processing, suppliers, importers, and exporters). One hundred
and twenty invitations to the on-line survey weresentout,and24answerswerereceived(12
from EEA located companies, one from Chile, and 11 from Vietnam).
All the questionnaires were developed or adopted based on the results from the
literature review, expert suggestions, and tested with some volunteer companies for
incorporating improvement modifications before the actual survey dispatch.
4.2 Case studies of the selected actors
Ex ante CBAs of implementing traceability systems were conducted for the two
previously mentioned companies (one is seafood processing and another is trading).
The costs of the system were based on analysis of the short questionnaire results from
the technology developers, whereas the benefits were obtained from the interviews
with the selected companies.
4.3 Methods of CBA
Net present value (NPV), which is used as a main criterion in the CBAs of the two case
studies, is calculated by the following formula (Boardman et al., 2006):
NPV ¼X
n
t¼0
NBt
ð1þrÞt
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where tis the time of the cash flow; n, the lifetime of the project; r, the discount rate
(the rate of return that could be earned on an investment in the financial markets with
similar risk); NB
t
, the net benefits at time t,NB
t
¼B
t
–C
t
,B
t
, the benefits arise at time t;
and C
t
– the costs arise at time t.
Costs associated with permanent structure are not included in the calculation.
Furthermore, before-tax real Euro and real discount rate are used, as the analysis is
assumed to reflect the gross benefits accruing to the processor and trader. In addition,
it is assumed that implementation of the project will not affect the market price of
inputs used due to its small size (Bell and Devarajan, 1983; Dreze and Stern, 2001).
The following assumptions are used in the calculations of the two case studies:
.A real discount rate of 4.5 percent is used for base-case scenario; sensitivity
analysis is performed with the discount rates between 2.4 and 7 percent (those
are currently used in EU countries) (Evans and Sezer, 2005).
.Time frame of the system is five years (based on the survey responses of the
technology developers).
.The first cash flow occurs at the end of each year (from the first year).
.As the system is composed of relatively short lifetime items, depreciation is
assumedly ignored in the calculation.
.The scrap values of the system items equal zero (meaning that costs are
overestimated).
In both the case studies, three scenarios are considered: base-case, worst-case, and
best-case. In the base-case scenario, discount rate is 4.5 percent; costs are the average
estimated; benefits are assigned with two values: “low” means lower bound of
estimated benefits, and “high” means upper bound of estimated benefits. In the
worst-case scenario, discount rate is 7.0 percent; costs are the maximum estimated;
benefits are the lower-bound estimated. For the best-case scenario, discount rate is
2.4 percent; costs are the minimum estimated; and benefits are the upper-bound
estimated.
4.4 Data analysis
Wilcoxon W test for two independent samples at significant level 0.05 is performed,
using statistical software SPSS version 16, to see if there is any difference between the
score means of perceived benefits between the Vietnamese and EEA companies’ groups.
Microsoft Excel 2007 is used to calculate mean of scores, present values (PVs) of
costs and benefits, NPV, to do the sensitivity analysis, and to build the graphs.
5. Results and discussions
5.1 Qualitatively perceived benefits of traceability
The results from the survey on qualitatively perceived benefits of traceability are
shown in Figure 1. The mean scores across the companies of the same region
are given for 11 Vietnamese (VN) and 12 EEA firms, while single values of scores are
shown for the Chilean company. The average score (grand mean) across 24 companies
is also shown.
It can be seen from Figure 1 that the companies consider improving supply chain
management as the most important benefit of traceability. Other perceived benefits are
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increase of the ability to retain existing customers; product quality improvement;product
differentiation; and reduction of customer complaints. Overall, the Vietnamese and EEA
companies have perceived that traceability can reduce liability claims and lawsuits, while
the Chilean firm has not had the same perception. The EEA companies’ group and the
Chilean firm also see traceability benefits from reduction of product spoilage. These
benefits have also been considered and/or reported in other food sectors, e.g. improving
supply management (Golan et al., 2004); increase product quality (Poghosyan et al.,2004;
Chryssochoidis et al., 2009); retaining existing beef markets in those countries who require
traceability (Souza-Monteiro and Caswell, 2004); product differentiation in fresh fruit and
vegetable industry (Golan et al., 2004), or dairy-processing sector (Sparling et al., 2006).
Surprisingly, other literature-based benefits of traceability, such as reduction of
inventory costs (Can-Trace, 2004), reduction of production costs, increase of product
price (e.g. positive consumer WTP) (Hobbs, 2003; Hobbs et al., 2005), and saving of
labour costs (Chryssochoidis et al., 2009), are considered of minor importance by the
companies-respondents. No significant difference of perceived benefits was found
between the Vietnamese and EEA companies’ groups.
5.2 Quantitatively perceived benefits of traceability
Survey results from the 24 seafood companies show that they are currently practicing
paper-based traceability with or without typed-in (electronically stored) data. Many of
them (14 out of 24 cases) also use bar code. Interestingly, 75 percent of the companies
(18 cases) have expressed their willingness to change to a more advanced traceability
system.
Quantitative benefits of adopting new traceability solution(s) (e.g. RFID, coupled
Rf-TTI, etc.) were obtained from the interviews with eight seafood companies.
A summary of perceived benefits is shown in Table II. Regarding the market benefits’
category, the companies have expressed that they cannot “sell traceability” twice (i.e. not
Figure 1.
Qualitatively perceived
benefits of traceability
5
4
3
2
1
0
Improve product
quality
Improve supply
chain management
Improve access to
overseas markets
Attract new
domestic
customers
Differentiate
products
Increase product
price
VN EEA Chile Grand mean
Increase the ability
to retain existing
customers
Reduce production
costs
Reduce spoilage of
products
Reduce inventory
Reduce customer
complaints
Reduce liability
claims and lawsuits
Reduce labour
costs
Score
Notes: Score1, “veryunlikely”; 2, “somewhat unlikely”; 3, “neither unlikely norlikely”; 4, “somewhat
likely”; 5, “verylikely”
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Benefits expected by the companies (number of companies shown in parentheses)
Benefit category Processing (2) Trading (1) Wholesalers (5)
1. Market growth (percent increase of the current turnover) From 0 to #10 #10 From #10 to (20
2a. Recall reducing (number of case per year)
a
From 0.1-0.25
a
with
current system 0 From 0-0.25
a
with current system
to 0-0.1
a
with new
system
to 0 with new system
2b. Reducing the impact of recall (percent of the yearly
turnover)
From #2.5% with
current system
From #5% with
current system
From 0-2.5% with current system
to 0% with new system
to 0% with new
system
to #2.5% with
new system
3a. Reducing impact of claims (percent of the yearly turnover) 0 0 From 0-5% with current system
to 0% with new system
3b. Reducing impact of lawsuits (percent of the yearly turnover) 0 0 From 0-1% with current system
to 0% with new system
4. Savings from labour costs (percent of the yearly turnover) From #2to#5#15 From #10 to 20
5a. Reduction of inventory (percent of the yearly turnover) 0-0.2 0 From 5 to 10
5b. Spoilage reduction (percent of the yearly turnover) 0-10 0 From 5 to 10
5c. Process improvements (percent of the yearly turnover) 0.3-10 0 From 5 to 20
5d. Quality improvement
b
(percent of the yearly turnover) 0-10 0 0
5e. Others 10,000 e/year; 0 0
10% of the yearly
turnover
Notes:
a
0.1 means “very unlikely”; 0.25 ¼“unlikely”;
b
fish with a higher quality reflects on a higher price of the product (comment from one interviewee)
Table II.
Expected benefits of
implementing new
traceability solution(s),
companies’ perspectives
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both with current and new traceability), therefore they do not expect to gain higher price
just with simple marketing as “traceable products”. Sparling et al. (2006) also found that
the dairy-processing companies perceived obtaining higher prices as an unimportant
benefit from traceability. However, most of the seafood companies in our study have
expected to be able to get their markets to grow with new traceability solutions. It may be
because new solutions can bring opportunities to market those credence values such as
organic(s), sustainability, reduced food miles, etc. (TESCO, 2007, 2008).
Regarding the benefits from recall reduction, the companies have expected to reduce
the recall frequency as well as recall scope which result in the savings of the new
system compared to the current one. This is in a very good accordance with the recall
model described by Resende-Filho and Buhr (2007), where the recall costs are
proportional to the quantity of products recalled. This is also in line with the finding of
Sparling et al. (2006) that factor related to these product problems are considered
between important and very important level (i.e. qualitatively scored above 4).
The companies perceive the savings from reduction of liability claims and lawsuits
very differently. Those who have not expected any liability savings explained that it
is because they have never experienced that kind of problem with their current
traceability system. Others are more conservative in the issue, although they have not
got any liability claims or lawsuits recently; they still expect the new solutions can
save them if any problems arise. For example, time-temperature records from using
RFID tags coupled with temperature sensor can be used as evidence about the
compliance or incompliance of product handling conditions.
RFID-based traceability systems are considered as fast systems compared to the
paper-based ones. Therefore, all the companies expect to gain from labour savings. It
has been shown that an electronic-based traceability system can avoid doubled time for
both paper and electronic data recording procedures (Chryssochoidis et al., 2009).
Regarding the benefits from the process improvement, it is expected to save from
inventory tied-up and operation costs, product spoilage reduction, yield improvement,
and quality improvement. The results are in good agreement with the findings of
Chryssochoidis et al. (2009) and Kim and Sohn (2009) that electronic-based traceability
solution can improve inventory in term of reducing misplacements and mistaken
shipments, reduce the loss rate of products, reduce misrecognition, improving tracking
of product movement, and increasing visibility of assets. Chryssochoidis et al. (2009)
also noticed the revenues from the product quality improvement. Some interviewees in
our study also expect to save costs of routine analytical (e.g. microbiological) tests if
they couple their traceability system with fast testing methods such as quantitative
polymerase chain reaction.
It is worth to note from Table II that companies operating at different steps of the supply
chains perceive potential benefits of new traceability solution(s) differently. For example,
the trading company and the wholesalers expect to save more on labour costs compared to
the processing firms. The trading company does not expect to have any benefits from the
process improvement (such as reduction of inventory, spoilage reduction, and yield
improvement) because it does neither produce nor store the products itself.
5.3 CBA of implementing new traceability solutions – case studies
The costs of traceability systems can be divided into start-up phase (initial investment)
costs and operational phase (on-going) costs (Chryssochoidis et al., 2009). In general,
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RFID-based traceability system costs can be listed by spending categories, namely, RFID
tags, data accumulator (laptop/desktop), software, RFID readers (including antennas),
training and change management, outside consultants, tag loss replacement,
implementation service costs (internet and power), labours and administration costs
(Can-Trace, 2007; Montanari, 2008; Chryssochoidis et al.,2009).
The costs of the new traceability solutions obtained from the technology developers
in the current study are presented in Table III. The cost components for the processing
company case are items numbered 1-2 and 5-14, while for the trading case are numbers
3-14. It is assumed that computer is used 50 percent for traceability purpose and the
rest 50 percent for others. Therefore, when calculating the costs of computer, just half
of the price is used. The same assumption is applied for internet connecting devices
and office software. It is also assumed that the outside consultant cost is evenly
distributed over the five years of the system lifetime.
It can be noticed from Table III that the computer costs will occur at the start-up phase
as well as after three years of the system operation; the same occurrence points are applied
for the costs ofinternet connecting devicesand office software. The costs for RFID passive
tags Rf-TTI occur assumingly at the beginning of each year, as they are non-reusable. It is
reported by the technology developers that the price of active tags strongly depends on the
volume purchased; buying 100 units at a time can save 20 percent. Active tag costs,
therefore, are reduced by 20 percent in the base-case and the best-case scenarios’
calculation, assuming that the processing company purchases more than 100 tags each
time. No extra labour is reported with the new RFID-based traceability solutionscompared
to the currentpaper-based ones, even labour cost savings are expected (Table IV). This is
in good agreement with the results of Chryssochoidis et al. (2009) that electronic-based
Costs per unit (e) Lifetime Quantity
No. Item Average Min Max (years) (units)
1. RFID passive tags Rf-TTI 0.40 0.10 3 One-time
2. RFID readers for passive tags Rf-TTI 3,000 200 5,000 7 15
3. RFID tags active 20 10 70 5
4. RFID readers active portal 1,500 700 4,000 7 15
5. Computer (laptop/desktop) 1,000 700 1,500 3 50%
6. Internet connecting devices 30 20 100 50%
7. Software (MS Office, SQL server,etc.) 1,000 400 10,000 50%
8. Software RFID 10,000 2,000 40,000
9. Training and change management 5,000 1,000 20,000
10,000
a
10. Policy development, compliance, and
audit 00 0
11. Labour 00 0
12. Outside consultants per hour 100 N/A
b
N/A
b
60
13. Implementation services per year (internet
and power) 300 250 2,000
14. Tag loss replacement (only for active tags)
(percent of the tag quantity) 3.0 2.0 10.0
Notes:
a
The maximum costs for item No. 9 are e20,000 in the processing company case, and e10,000
in the trading company case;
b
N/A means that input data are not available
Table III.
Costs of implementing
new traceability
solution(s)
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traceability solutions can save labour from double data recording processes. Generally,
Table III shows that there is a largevariability in the rangeof the items’ costs, contributing
to the wide range of overall costs of adopting new traceability solutions between worst,
base-case, and best scenarios (Table IV).
Regarding the benefits of the new systems, the seafood processing company expects
that they can benefit 0-2.5 percent of the annual turnover from recall reduction,
1-2 percent from labour cost savings, and 0-0.5 percent from process improvement.
The trading firm expects to gain 5-10 percent yearly turnover from market growth and
10-15 percent from labour cost savings. The minimum values of those ranges are
regarded as lower-bound estimated, and their maximum values are as upper-bound
estimated for further calculations.
PVs of costs and benefits of five-year lifetime of the traceability systems were
calculated and presented in Tables IV and V, respectively. The three scenarios included
the effects of uncertainty related to the discount rate (2.4, 4.5, and 7.0 percent), estimated
costs (average, min, max), and future benefits (lower bound and upper bound).
Table IV shows that the PVs of costs for outside consultants were found the highest
for the best-case scenarios and the lowest for the worst cases. It is because the same
hourly consultant costs (e100) were assumed for all the scenarios due to unavailability
of the input data (Table III) while discount rate of 2.4, 4.5, and 7.0 percent were used for
the best, base-case, and worst scenarios, respectively. However, these PVs do not affect
much of the total costs’ PVs which are mainly influenced by the costs of RFID tags.
Furthermore, the cost of external consultant accounts only for a small proportion
(0.1-2.6 percent) of the total costs; this is in a good accordance with the study of
Sparling et al. (2006) where outside consultant cost is considered unimportant.
Overall, Table IV indicates that the main expense goes for the investment of RFID
tags, accounting for 91.8-97.7 percent of the total cost in the seafood processing
Processing company
case Trading company case
Costs components Worst Best Base Worst Best Base
RFID tags
a
6,885.3 203.7 776.2 2,333.4 333.3 666.7
RFID readers
b
75.0 3.0 45.0 60.0 10.5 22.5
Computer (laptop/desktop) 1.4 0.7 0.9 1.4 0.7 0.9
Internet connecting devices 0.1 0.0 0.0 0.1 0.0 0.0
Software (MS. Office) 9.1 0.4 0.9 9.1 0.4 0.9
Software RFID 40.0 2.0 10.0 40.0 2.0 10.0
Training and change management 20.0 1.0 5.0 10.0 1.0 5.0
Policy development, compliance and audit 0.0 0.0 0.0 0.0 0.0 0.0
Labour 0.0 0.0 0.0 0.0 0.0 0.0
Outside consultants 5.1 5.7 5.4 5.1 5.7 5.4
Implementation services (internet and power) 10.2 1.4 1.6 10.2 1.4 1.6
Tag loss replacement 0.0 0.0 0.0 956.7 31.1 87.8
Total costs 7,046.1 217.9 845.1 3,425.9 386.1 800.9
Notes:
a
RFID tags are passive Rf-TTI for the processing company case, and RFID tags active for the
trading company case;
b
RFID readers are readers for passive tags Rf-TTI in the processing company
case, and RFID readers active portal in the trading company case; ethousand
Table IV.
Present values of costs
of implementing new
traceability solution
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company’ case, and 94.2-96.0 percent (including tag loss replacement) in the seafood
trading company’ case.
From Table V, it can be seen that in the seafood processing company case, the NPV
of the lower-bound base-case scenario, where the benefits of recall reduction has not
been perceived, is negative. Contrastingly, when the recall is expected to be reduced
from 0.25 (“unlikely”) level with the current traceability to 0.1 (“very unlikely”) with the
new system, the NPV becomes positive. The NPV in the trading company case is
always positive; and the benefits by far outweigh the costs (16-252 times).
To test the uncertainty of the discount rate, a sensitivity analysis of the rate range 2.4-7.0
percent was performed for the base-case scenario of the processing company. For the lower
bound, the NPV is negative (minus e786,591) even at the discount rate of 2.4 percent. The
result for the upper bound is shown in Figure 2. It can be seen that this upper-bound
base-case scenario has passed the discount rate test as the NPV is always positive.
It is unnecessary to do the sensitivity analysis on the discount rate for the trading
company case because its worst scenario NPV is already positive. Overall, it can be
Processing company case Trading company case
Base Base
Benefit components Worst Best Low High Worst Best Low High
Market growth benefits
a
0.0 0.0 0.0 0.0 18,691.6 39,062.5 19,138.8 38,277.5
Recall reduction
b
0.0 1,164.8 0.0 1,097.5 0.0 0.0 0.0 0.0
Savings from clams
and lawsuits 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Labour cost savings
a
93.5 195.3 95.7 191.4 37,383.2 58,593.8 38,277.5 57,416.3
Savings from process
improvement
a
0.0 48.8 0.0 47.8 0.0 0.0 0.0 0.0
Total benefits 93.5 1,408.9 95.7 1,336.7 56,074.8 97,656.3 57,416.3 95,693.8
NPV 26,952.6 1,191.1 2749.4 491.7 52,648.8 97,270.2 56,615.4 94,892.9
Notes:
a
Assume that benefits occur once at the end of the first year;
b
assuming yearly benefits, from
the end of the first year; ethousand
Table V.
Present values of benefits
and net benefits of
implementing new
traceability solution
Figure 2.
Sensitivity analysis of the
upper-bound base-case
scenario in the seafood
processing company case
450,000
460,000
2.0 3.0 4.0
Discount rate (%)
5.0 6.0 7.0
470,000
480,000
490,000
500,000
510,000
520,000
530,000
Net present value ( )
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recommended that the trading company should implement RFID tags on pallets for
traceability purpose.
Although not all the scenarios of the seafood processing company case appear to be
beneficial in monetary term, it is worth to note that the new traceability solution in this
case is aimed at a more detail level (i.e. master boxes) than in the trading company case
(i.e. pallets).
6. Conclusions and avenues of future research
This paper illustrates the qualitatively perceived benefits of traceability from the
companies’ perspectives. Improvement of supply chain management is expected as the
most important benefit of traceability. Other benefits are increase of the ability to retain
existing customers, product quality improvement, product differentiation, and reduction
of customer complaints. The findings offer practical evidence in support of the traceability
drivers mentioned in previous studies, such as in Smyth and Phillips (2002), Buhr
(2003), Karkkainen (2003), Golan et al. (2004), Poghosyan et al. (2004), Sparling et al.
(2006), Can-Trace (2007), Pouliot and Sumner (2008), Chryssochoidis et al. (2009),
Wang et al. (2009a), etc. However, due to a small sample size of the study (24 companies),
the results cannot be generalised. Further research with larger number of samples is
desirable.
The paper also describes the quantitatively estimated benefits of adopting new
traceability solution(s) in response to the willingness of the industry to change for a
more advanced traceability system. The companies at different steps of the fish supply
chains have perceived benefits differently. Overall, benefits are expected to come from
market growth; recall reduction; liability claim and lawsuits reduction; labour savings;
and process improvement. The findings support the benefit templates developed by
Can-Trace (2004) and Chryssochoidis et al. (2009).
The ex ante CBA for the seafood processing case shows that implementing Rf-TTI
tags on master boxes can bring monetary benefits if there are recall reductions and
labour cost savings. The NPV is negative when the savings from recall reduction are
not perceived. The CBA for the seafood trading company case proves tangibly
quantifiable benefits of applying RFID active tags on pallets. Once again, the findings
provide additional empirical support of traceability benefits from implementing
RFID-based traceability solutions, which have been stated elsewhere (Karkkainen,
2003; Vasvik, 2006; Chryssochoidis et al., 2009).
However, the CBA case studies are just ex ante analyses with estimated costs and
expected benefits from the companies’ perspectives; therefore, the results are limited to
the specified cases and conditions. Extended ex ante and/or more extensive ex poste
CBA may need to be conducted to re-evaluate the net benefits (Boardman et al., 2006) of
implementing new traceability solution(s).
Because the two case studies are not of the same supply chain and aimed at different
traceability solutions (Rf-TTI versus active RFID tags) and precisions (boxes versus
pallets), the CBA results are not comparable. However, they have strengthened the
argument on costs shifting among the stakeholders in a supply chain. It was shown
that the seafood processing company pays much for what is needed, resulting in some
negative NPVs, while the trading company can expect steady benefits. In order to
implement new traceability solution(s), e.g. RFID based, at the supply chain level, it is
suggested that the price of intermediate products would go up, which is a way that
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trading companies could entice or persuade food producers to put new traceability
system(s) in place. The findings support the need for open discussion between different
actors in a food supply chain on the distribution/redistribution of costs and benefits of
implementing traceability (Can-Trace, 2004).
Acknowledgements
The majority of the research described in this paper is part of a sixth framework
EC-funded project named “Developing and integrating novel technologies to improve
safety, transparency and quality assurance of the chilled/frozen food supply chain –
test case fish and poultry” acronym CHILL-ON (Project No. FP6016333-2). The
CHILL-ON subtask 1.4.2 partners are greatly thanked for their data collection and/or
data contribution. Special thanks to Dr Weisong Mu from the China Agricultural
University for providing the backbone of the qualitatively perceived benefit
questionnaire. The information contained in this paper reflects the authors’ view;
the European Commission and the CHILL-ON partners are not liable for any use of the
information contained therein.
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Appendix
(A) Questionnaire regarding the qualitatively perceived benefits
(Adopted and modified from a questionnaire of Dr Weisong Mu from the China Agricultural University)
1. Please give the scores for the potential benefits of implementing traceability system/solution at your company
Somewhat
unlikely
2
Neither unlikely
nor likely
3
Somewhat
likely
4
Very
likely
5
Improve product quality
Attract new domestic customers
Increase product price
Reduce production costs
Reduce spoil age of products
Reduce inventory
Reduce customer complaints
Reduce labour costs
2. Please rate also other benefits and specify (if any). Please choose option N/A if you think there is no other benefit
from those listed in the question 1 above.
N/A Very unlikely
1
Somewhat
unlikely
2
Neither unlikely
nor likely
3
Somewhat
likely
4
Very
likely
5
Other benefits (Please specify)
3. Please give the scores for the facing difficulties in implementing traceability system/solution at your company.
Very unlikely
1
Somewhat
unlikely
2
Neither
unlikely nor
likely
3
Somewhat
likely
4
(continued)
Very
likely
5
Lack of technical staff
High costs of application
of the trace ability system
Less flexibility to introduce
new products
Improve supply chain
management
Increase access to overseas
markets
Differentiate your products from
others
Increase the ability to retain
existing customers
Reduce liability claims and
lawsuits
Very
unlikely
1
Lack of managerial staff
Less staff time availability
for other tasks
Uncertainty about the
future benefits
No unified standards in the
markets
Lack of support from
government
Less flexibility of
production process
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4. Please rate also other difficulties and specify (if any). Please choose option N/A if you think there is no other
difficulty from those listed in the question 3 above.
N/A Somewhat
likely
4
Very
likely
5
Other difficulties (please specify)
5. Please specify your current traceability status. More than one answer is possible.
No traceability
Paper based
Typed-in data
Use bar code
E-exchange
6. Are there any changes you would like to make to the existing traceability system/solution?
Yes No
7. Would you like to change your current traceability status to a more advanced system/solution in the near future?
Yes No
8. In which step of the supply chain does your company work? More than one answer is possible.
Very unlikely
1
Somewhat
unlikely
2
Neither unlikely
nor likely
3
Raw material supply
Processing
Transportation
Distribution
Import
Export
9. Please provide an approximation of your company yearly turnover.
Below 10,000,000
10,000,000 - 100,000,000
100,000,000 - 200,000,000
200,000,000 - 400,000,000
Above 400,000,000
10. How many employees are there in your company? ................................................
11. Please provide an approximation of your total production (tons/year). This is an
optional question/answer; you do not need to answer it if you are not willing to.
Fish supply
chains
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(B) Questionnaire for company interviews
Name of your company: .............................................................................................
We would like to know about the positive impacts of traceability on your business. Please
take sometimes to go through 7 sections with 21 questions in total.
A. General information: Questions 1-3
1. Please specify your current traceability status by crossing the most appropriate
answer(s)?
a. No traceability
b. Paper based ×
c. Typed-in data
d. Use barcode
e. E-exchange
2. How would you like to change your traceability status in the near future? Cross the
most appropriate answer(s)
a. No change
b. Use barcode ×
c. Use RFID*
d. Use Rf-TTI** ×
e. Other (please specify)
* RFID is the abbreviation of radio frequency identification
** Rf-TTI is coupled time temperature indicators (TTI) and radio frequency technology
3. How would you like to use RFID or Rf-TTI? Please cross the most likely option and give additional
information on the right columns of this row when needed.
Number of packs per box Number of boxes per palletNumber
of
tags/unit
Min Max Average Min Max Average
a. For retail packs 1
b. For boxes ×1 - - - 108 -
c. For pallets - - - - - -
d. For containers - - - - - -
- Please specify the size of retail packs (grams):
Min: 100……………..........; Max: 1,500………………..; Average: ………………………
(e.g. 35 units of 50g → 1,750; 10 units of 100 g → 1,000 g).
- Please specify the size of boxes (kg):
Min: 1……………..........; Max: 17.5…………..; Average: ……………………….
(e.g. 35 units of 50g → 1750; 10 units of 100 g → 1000 g)
- Additional information (optional): Annual trade in volume of product(s) intended for
NEW* traceability system/solution (tons/year) (based on your recent trade figures):
* NEW traceability system/solution here means the one you would like to use in the future
instead of your current traceability system/solution.
Use of RFID
or Rf-TTI
Cross
(x)
35
Min: ………..........; Max: ……………..; Average: 450……………….
(continued)
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4. How would you like to use traceability to market your products? Cross appropriate option(s)
Nothing
×
Sustainable products ×
Products from specified origin ×
Organic products
Reducing carbon foot print products ×
Others
B. Market benefits: Questions 5-7
5. Please answer question (5a) if your company has already been using traceability for more than five years before
2005; otherwise please answer question (5b), i.e. if your company just implemented traceability not long/right
before or after the 2005 regulation
5a. How did the 2005 EU traceability regulation change/affect your traceability system and business?
Traceability system Business
No change × ×
Adjusted to make it compliant with the regulation -
Better off -
Worse off -
Other comments
5b. How have you experienced the benefits of your CURRENT traceability versus NON-traceability from having been
able to sell products with higher price? (% estimated contribution of the TRACEABLE products to your yearly turnover)
0% ≤2% ≤5% ≤10% ≤15% ≤20% >20%
6. How do you expect NEW traceability system to make your market(s) GROW? (% increase of the current turnover).
Cross the most likely option.
0% ≤2% ≤5% ≤10% ≤15% ≤20% >20%
7. Do you expect NEW traceability system to DEFEND your CURRENT MARKET share?
Yes No Don't know
Products with "visible traceability" (provided a code that customers can use to consult the full
traceability, e.g. via interenet)
(continued)
C. Benefits from recall reduction: Questions 8-11
8. How many recalls did you experience per year before implementing traceability?
0.1
(very
unlikely)
0.25
(unlikely)
0.5
(even)
0.75
(likely)
0.9
(very
likely)
1 2 3 4 5
×
0
(nil)
9. How did the recall(s) affect your yearly turnover?
0% ≤2% ≤5% ≤10% ≤15% ≤20% >20%
(Not significant)
Fish supply
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10. How many recalls per year do you expectin the future?
0
(nil)
0.1
(very
unlikely)
0.25
(unlikely)
0.5
(even)
0.75
(likely)
0.9
(very
likely)
1 2 3 4 ≥5
With current
ability ×
With NEW
traceability ×
11. Please provide an estimate of the total financial impact of recall(s) on your FUTURE yearly turnover?
(% of yearly turnover) (It may include: Lost/recalled material costs; Lost time - employee time, plant time,
production time, etc.; Customer reaction/lost sales margin; Additional marketing/public relations expense;
Charge backs per recall; ...)
0
(not significant) ≤2.5% ≤5% ≤7.5% ≤10% >10%
With current ability ×
With NEW traceability ×
D. Savings from liability clams or lawsuits: Questions 12-16
12 .How often have you experienced liability claims or lawsuits in the last three years?
Regular clam
None 1 2 3 4
Clams ×
Lawsuits
×
(continued)
13. How do CLAM(s) affect your yearly turnover? (% of yearly turnover)
None 1 2 ≤5 ≤10 >10
×
With current ability ×
With NEW traceability
(expected) ×
14. How do LAWSUIT(s) affect your yearly turnover? (% of yearly turnover)
None 1 2 ≤5 ≤10 ≤20 >20
Before implementing
traceability ×
With current ability ×
With NEW traceability
(expected) ×
Before implementing
traceability
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15. How much do you CURRENTLY pay for liability insurance per year? (% of yearly turnover)
Insurance for food safety 0.003%
Insurance for food damage during shipping Not applicable
16 .What do you expect to pay for liability insurance per year in the FUTURE? (% of yearly turnover)
Insurance for food safety Insurance for food damage during shipping
With current ability Same
With NEW traceability Same
E. Savings from labor costs: Questions 17
17. Pleaseestimate the average expected benefits from labor cost savings of NEW traceability system compared to
the current one (% of yearly turnover)
0% ≤2% ≤5% ≤10% ≤15% ≤20% >20%
(Not significant)
(continued)
F. Benefits from process improvement: Questions 18
18. Please estimate the average expected benefits of traceability from process improvement
(% of yearly turnover)
With current ability With NEW traceability Comment
a Reduction of inventory 0% 0.2%
b Spoilage reduction 0% 0%
c Process improvements (yield improvement) 0% 0.3%
Quality improvements
One-time benefit with traceability
d
Annual benefit with traceability Difficult/subjective
Other benefits
One-time benefit with traceability
e
Annual benefit with traceability
G. Business size: Questions 19-21
19. Please provide an approximation of your market share in the main market(s)
Domestic EU US Japan Others
0%
< 2% ×
2-5%
5-10%
> 10%
Fish supply
chains
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Corresponding author
Nga Mai can be contacted at: mtt2@hi.is
20. Please provide an approximation of your company yearly turnover
≤ 10,000,000
≤ 100,000,000
≤ 200,000,000
≤ 400,000,000
> 400,000,000
or specify your yearly turnover 10,000,000
21. How many employees are there in your company? 50............................................
Other comments:
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.................................................................................................................................................
Thank you very much for your contribution!
C. Questionnaire to technology developing partners
Your name (optional):Name of your organization:
We would like to know about the costs of traceability system(s) using the technology such as RFID or smart labels. Please take some time to
fill in the information needed.
Please put before-tax costs, indicating the currency of your system (e.g. in US$ or ) and keep it consistently throughout the survey
Initial cost per unit ( ) Annual cost per unit ( )
Min Max Aver age Min Max Average
1. Paper system
2. RFID tags passive HF
3. RFID tags passive UHF
4. RFID tags active
5. RFID tags passive + temperature sensor
6. RFID readers HF Portal
7. RFID readers HF PDA
8. RFID readers active Portal
9. Computers
10. Internet connecting devices
11. Software (MS. Office, SQL server,…)
12. Software RFID
13. Changes to current processes
14. Training and change management
15. Outside consultants
16. Policy development, compliance and audit
17. Labour for RFID reading HF
18. Labour for RFID reading UHF
19. Implementation services (Internet; power)
20. Tag loss replacement (%) RFID Labels UHF
Cost category (Note: below are just suggested
categories, please change as needed to more suitable ones)
Life cycle
(years)
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