Just as consumers and businesses are breaking free of the after effects of the recent recession, some financial experts are predicting another one—mild though it may be—by early next year. According to the April 2012 Trends Report from ITR Economics, a combination of rising taxes and reduced government spending will hit families in the pocketbook.

The report’s authors say the effects will be mild, partly because the Fed will do its best to fight inflationary forces. However, the Fed’s focus on “core inflation” will not include food and energy, so prices in those two areas will continue to rise. That will reduce consumer spending power—and possibly set off a familiar chain reaction.

If the consumer has less to spend, they buy less, and when they buy less, producers have less to spend, so they buy less. That means investments in equipment and supply chain technology may take a hit. Indeed, this report expects orders for industrial machinery to decline through this year.

Consumers and producers cite good reasons to be worried. But some producers are refusing to be paralyzed by fear. Tom Clark is one of them. As operations manager for LoBue Citrus, an independent, family-owned grower, packer and shipper of California citrus products, his narrow profit margins make any kind of investment in technology risky. What Clark realizes, though, is that if you don’t invest in your supply chain’s performance, the risk is even greater.

Demand for Traceability

LoBue is one of many family-run businesses that have to fight the forces of inflation while complying with the forces of regulation. In the produce industry, the demand for product traceability is forcing these companies to consider The Produce Traceability Initiative, an industry-sponsored effort to develop standardized trace-back procedures. The goal is to achieve supply chain-wide adoption of electronic traceability of every case of produce.

This hasn’t yet become an FDA mandate, but even if it doesn’t Clark sees it as an opportunity to improve his business.

He joined forces with CH Robinson, a 3PL service provider; FoodLogiQ, a traceability software provider; Intermec, provider of compliance labeling and tagging systems; and Associated Grocers, a food retailer association, to test available tracing technologies. His goal was to see if his company could do a better job on trace-back and trace-forward to improve their record keeping documentation. It required that LoBue develop G10 global identification number coding for the majority of its products. The company input those codes into an Intermec Smart printer system. The system downloaded the codes to printers then developed laminated sheets of bar codes so an operator can look at a product being produced, scan a code, and prepare and produce a case code with the G10 ID on it and apply that label to a container.

Operator Acceptance

Clark was a bit concerned how his workers would take to the technology.

“We work with a labor force that doesn’t have a high education and English is a second language in many cases, so we needed a system that would fit our industry,” he says. “But this simple plug and play system gives us control at the container level, so we have containers that are then palletized and we create a hybrid pallet tag with bar codes that tie them back to the containers on that pallet.”

The pallet tag IDs are scanned and recorded as shipped out of inventory, and those cases tied to that hybrid pallet tag are then shipped to the receiver’s warehouse. On that G10 code there’s also a voice pick code the receiver uses in their warehousing that identifies the product. That case is then picked from their warehouse to be shipped to the retailer. That retailer has the code on that container, and if there’s a recall that G10 code will tie the product back to its origins at the lot level.