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COOL Compliance Making You Sweat?
Collaborative workflow solutions enable compliance
by John Abkes
While debate and expectation regarding country of origin labeling (COOL) legislation have been around for many years, the recent veto override of the 2008 Farm Bill has created a renewed sense of urgency among food retailers, operators, and distributors who need to become compliant. That’s because the bill included a provision reinstating the mandatory September 30 COOL deadline for fresh produce and meat products.
COOL legislation mandates that operators and retailers must “inform consumers of the country of origin for muscle cuts of beef, lamb, and pork; ground beef, ground lamb, and ground pork; farm-raised fish and shellfish; wild fish and shellfish; fruits, vegetables, and peanuts via a label, stamp, mark, placard, or other clear and visible sign on the covered commodity, or on the package, display, holding unit, or bin containing the commodity at the final point of consumption.”
From the beginning, this legislation has created controversy among industry groups. But the results of several studies indicate that consumers like the idea. In 2002, the Colorado State University Department of Agriculture surveyed consumers in Denver and Chicago and found that 75% prefer to buy beef with country of origin labeling and that 73% would be willing to pay more for beef with such labeling. The survey was conducted before the recent inflation of food costs, which may affect this response. The 2002 Fresh Trends survey published by The Packer newspaper found that 86% of consumers favor COOL over no labeling, and 78% prefer mandatory labeling.
Although the concept of quality is subjective, COOL legislation makes it possible for consumers to make quality decisions armed with more information about where their food comes from. That makes COOL compliance a food quality issue for consumers who want to know where their food originated.
So what does this mean for you? Well, depending on where you are in your COOL compliance efforts, you will learn—if you don’t already know—that compliance includes three basic components.
- Accurate origin codes at the product item level.
- Accurate and timely data exchange, tracking, and documentation.
- Signage at the point of sale.
For the first two components, a collaborative workflow and integrated document exchange can be a significant resource for companies trying to meet the compliance deadline. Let’s take a look at the requirements more closely, examining specifically how technology can help resolve the two main compliance hurdles.
Accurate Origin Codes
Each manufacturer, item, and country of origin must have its own unique code. There are several questions to ask regarding this component.
- How many codes can my database handle?
- Does my database even have room for a COOL code for an item?
- How many slots—including produce—are in my warehouse?
- How long will it take to get all my codes standardized and mapped correctly to all my trading partners?
- How will I retain the required history if I need to change a code?
- How do I handle vendors or customers who simply don’t have the resources or technology required to make it happen?
- How am I going to pull all this off?
These challenges can be met with a collaborative workflow coupled with data exchange. Intelligent data synchronization allows companies to maintain one set of codes while mapping that code to each respective trading partner. It can also help to map and standardize codes internally among divisions, banners, business units, and so on, to speed the process and avoid losing important history.
Data Exchange, Tracking, Documentation
Each unique code must be mapped, updated, and exchanged effectively among all trading partners throughout the transaction process in near real time. There are several questions that you need to ask here.
- What document will contain COOL data: purchase order (PO), advance ship notice (ASN), invoice, all three?
- What happens if I can’t support that document?
- How many companies can really support a complex 856 ASN?
- How many really want to staff up to handle a unique complex integration with each of their customers?
- While efforts to create standards are ongoing, what do I do in the meantime?
- What happens if an item is substituted? Won’t my electronic data interchange map break because it’s a new item?
- I used to aggregate my demand for apples and chuck rolls with one code. How can I manage that workflow when my one code just became dozens of codes?
- How can I maintain the history to provide for accurate forecasting when one code has now become dozens of codes?
- If I am inspected and don’t have the right sign, how can I quickly tie the case in the back of the store to the pallet in the warehouse, to the lot that pallet came from, to the vendor who shipped that pallet?
- Even if I can do all of the above, how do I know the data is accurate?
Once again, collaborative workflow coupled with data exchange solves these challenges. All documents exchanged can contain the appropriate COOL code. One integration with this type of solution provides the workflow and integration required for all other customers within the solution. Collaborative workflow integrates the product item, PO, ASN, and invoice together, eliminating keystrokes and assuring accuracy. Workflow allows demand aggregation and forecasting to occur at the original item level without losing history. Collaborative technology lays the foundation to help the entire food industry—retailers, restaurant operators, distributors, and suppliers—meet the COOL requirement.
Conversely, many companies are considering assigning a separate item code to each unique item and country of origin combination. While this approach may appear at first to be the most expedient, companies are learning that the task is costly, time consuming, and unmanageable for both buyer and supplier due to the sheer volume of item codes required. And, assuming this item code explosion can be completed by the deadline, there must now be an electronic relationship set up between partners.
A more expedient, effective, and economical response involves seeking out existing workflow technology solutions that, in addition to their primary purpose, enable a retailer to be COOL compliant. The following describes what you should be looking for in a workable solution.
- Buyers and sellers map and synchronize their current item master files via a combination of workflow, file exchange, or integration, a process that can be accomplished quickly and efficiently. Vendors can create a separate code for each unique item and origin that will work for all buy-side customers. Buyers can use the current catalog, which has been mapped and synchronized with each vendor. Neither buyer nor seller has to drastically increase their item master file.
- Buyers and sellers exchange documents electronically using existing electronic workflow processes to send and receive documents from their current systems. One integration enables this COOL workflow with all customers in the system.
- Accurate COOL codes are included in the normal exchange of documents in the following ways.
- COOL codes are connected to the appropriate item and shipping location combination, thus assuring accurate documentation in each order, advance ship notice, and invoice.
- COOL codes are captured at the item and pallet level. A workflow solution can provide the additional integration needed to update the buyer system that links the inbound vendor order to the outbound store order.
- Items can now be tracked from the store to the manufacturer throughout the supply chain.
The bottom line is that COOL compliance is a reality and has many food retailers, operators, distributors, and suppliers scrambling to meet the deadline. The right technology solution, one that offers collaborative workflow, is an effective way to become compliant.
Abkes is vice president of iTradeNetwork. Reach him at email@example.com or (402) 998-4170.