Trust Bites

What do food and cars have in common? Both are products produced and sold by large industries, but the similarity ends there, doesn't it? This week's returning 'Trust Bites' guest begs to differ.

Automotive industry expert and My Trusted Source advisory board member Pedro Ferro explores how the principles of automotive supply chain efficiencies can benefit the food industry.

With host Dr. Darin Detwiler, he discusses the role of tracing technology in ensuring supply chain transparency, the importance of quality and safety processes, and how these processes could be adapted for the food industry.

The conversation also touches on how technology can be used to predict problems before they reach the consumer.
  • (00:18) - Introduction and Guest Background
  • (00:39) - Comparing the Food and Automobile Industries
  • (02:26) - Key Supply Chain Technologies in the Automobile Industry
  • (04:31) - Challenges in the Food Industry
  • (07:01) - The Importance of Transparency and Traceability
  • (09:12) - The Role of Technology in the Food Supply Chain
  • (12:56) - Predictive Analysis and Risk Mitigation
  • (14:10) - Conclusion and Future Discussions

This podcast is presented by My Trusted Source.
Produced by Joe Diaco Podcasting Support.   

Creators & Guests

Host
Dr. Darin Detwiler
Dr. Darin Detwiler is a nationally recognized leader in food regulatory industry and academia, with over 25 years of consultation for industry, government, and NGOs.
Guest
Pedro Ferro
Managing Partner at Luzio Strategy & Operating Partner at Michigan Capital Advisors

What is Trust Bites?

Hosted by food safety industry leader and consumer advocate Dr. Darin Detwiler, "Trust Bites" examines the challenges of ensuring food safety in a complex global marketplace and maintaining brand reputation.

With the rise of global food trade, consumers, retailers, and producers alike are increasingly concerned about the safety and quality of the food they buy. Many existing validation systems are outdated, bureaucratic, and expensive, creating inefficiency and allowing vital information to slip through the cracks.

"Trust Bites" delves into the validation process, discussing the challenges and limitations of current systems and exploring fair and equitable solutions.

Dr. Darin Detwiler: Hello. This is Trust Bites, presented by My Trusted Source, the solution to build trust throughout today's global food supply chain. I'm Dr. Darin Detwiler, and in these episodes we'll be diving deep into discussions with our advisory board. Back with us is Pedro Ferro. Hello, sir.

Pedro Ferro: Hello, Darin. How are you?

Dr. Darin Detwiler: Great. Great.

This is an interesting episode in terms of talking about technology, because you have seen technology from multiple industries' perspectives. And for those who are watching this who might not know who you are, will you tell us a little bit about yourself?

Pedro Ferro: My experience is heavily towards the automotive and commercial vehicle industry. I have more than 30 years in this business, developing supply chains, developing manufacturing sources in many different places: in China, in South America and so forth. I had a little bit of experience with the food industry through my brief passage to WQS. But I am also a consultant and I work with private equity on manufacturing technologies.

That's pretty much my background.

Dr. Darin Detwiler: Pedro, I don't know if you know this about my background, but I used to be a history teacher a long time ago. It was one of my first major jobs after I got out of the Navy. I was a nuclear engineer on a submarine in the Navy. And so technology is one of my strengths and experiences, but also history.

The reason I bring this up is because I always think about technology in the food industry. And I make a comparison with the automobile industry because the Ford motor company, they based their inspiration to design in terms of the assembly line process uh, how they reshaped automobile making based on what they saw with the meat slaughter plants and the Chicago meat houses.

And so you think of the assembly line for automobiles as being such a technological achievement today, but it really actually was inspired by what they saw in terms of the food supply. So, talking about key supply chain technologies and food, I think it's perfectly appropriate to talk about it from someone who understands the automobile industry as well.

Dr. Darin Detwiler: So, let's talk about perhaps some examples of key supply chain technologies that you see that are having a significant impact on business growth and efficiency today.

Pedro Ferro: That's a very good question. Thank you. You're absolutely right. The automotive industry depends on suppliers. They're not vertically integrated at all, so everything comes from the outside. So, managing that supply chain, that complexity, which is a global supply chain by the way, it's very complicated. And that's who I try to help simplify things for them, by focusing on an 80/20 formula, just to focus on your 80 and manager 20 or your trivial mini in a different way.

Some of the technologies that I see, and I think the food industry could benefit quite as much is, before technology, I think there's one thing that the automotive industry does, which is the the processes for quality and safety. They've been evolving these quality processes over the years. Think about the Toyota Lean system, for example. So the Lean system is not just the technology, it's not just a process. It's a way, it's a philosophy of working, right?

So this is how Toyota, such a great company, the largest manufacturer in the world, as a matter of fact, they have a business system that works for them. The food industry doesn't have the equivalent of a Lean system, with exceptions. There's probably some that do, but the automotive industry have over the years developed these systems like Lean, Six Sigma, even the 80/20 development business processes, one that they use. So I think for me, before technology, that's a big difference between those two industries. If you will know Lean, for example, is a way of working as a way of doing business and very much focused on quality, on waste. Focused on environment, many things, and I think it would be very beneficial to have such a business process into the food world as well.

Dr. Darin Detwiler: I don't know if it's a philosophical or if it's just a frame of thinking type differentiation. In the automobile industry, we're talking about creating a product that is not perishable. It's not like it has to be distributed and sold within a week or else it's not safe.

Not only is it not perishable, most food is not going to be kept around for a while. Whereas automobiles, we can slow down the assembly line. We can pause the assembly line. We can reconfigure if we need to. And we realize that these products are going to be around for a while. And this is probably one of the most significantly expensive purchases that people are going to be making, next to a house. Do you think that has an effect on how people are thinking about leadership and technology between the automobile industry, and what they do within the food industry?

Pedro Ferro: Automobiles became a commodity, very much like food, I would say, right? So the margins for manufacturing automobiles are very thin. And think about now bringing thousands of components from China, from India, from around the globe to assemble your vehicles just in time on the assembly.

It's not perishable. But it's highly synchronized. It's something that many industries could learn from. How do you synchronize 8,000 miles, 10,000 miles supplier with your production tomorrow? The parts coming and going in line. Because if these guys accumulate inventory, if they stop the assembly line, anything that they do that breaks that fragile supply chain can create a huge economic issue for the automobile makers. We've seen it happen in the US. We've seen GM broke. We've seen Chrysler broke. We've seen many problems happening here because that synchronization was broken. I think that the consumer doesn't realize that, or they realize maybe when they buy a car that the dealer is trying to sell many other things on top of the car to make more margin, but the margins are very thin.

It's an interesting industry because they had to gain efficiencies over the years and be safe, have competitive cost. They were forced into this world, because cars became commoditized. Now, food has been a commodity since Day One and we don't look at food as a process is on industrial. We look at food as something that we see on the shelf of a supermarket. Then we trust completely the food to be safe, to be fresh. And even now more organic.

I think that one of the things that we don't have in the food industry that we need to have, and we have, I think, in other industries, is the transparency in the supply chain. The only way you can synchronize this 8,000 parts that are 10,000 miles away from you is to link systems. So, the enterprise systems of of a General Motors are connected to the systems of the suppliers. They know when a part is coming out of line, when it's going to ship, when it's going to be here, the status of that part and so forth. So I think the transparency is there for the entire supply chain. While in food, you don't have that transparency. I think part of the problem in the food is you have this intermediary, this middle man. You have so many producers, so many farmers, so many people, they're constantly consolidated in the middle. And all of these points are not connected.

So, you lose track of freshness, of quality and all other aspects. My belief. So I think that transparency connecting these things would be a great evolution for the food industry going forward.

Dr. Darin Detwiler: Great insight there. And, as you were saying that, I was thinking about: you go to the grocery store and you buy, let's say, celery, right? And then you go and buy some type of commercially packaged good. It could be frozen. It could be in a can. And there's 175 ingredients.

There's this big, long list that takes up the whole side of a panel and has all those ingredients. And it's almost as if we need to think about that convenience of buying that commercially packaged good, just like the convenience of not having to buy all the parts to assemble our own car, right? The convenience of buying a car that's already assembled for us. But the effectiveness, the efficiency, the safety, the quality, it can be completely undermined by just one component of that frozen meal, just as much as it could be undermined by a faulty part or faulty electrical system or faulty safety system within a vehicle.

Pedro Ferro: Yeah, absolutely. Yeah, absolutely. The other issue I see is the transportation.

The logistical challenge in the food industry is so huge. Quite frankly, I don't think that we understand how the food gets to us, not just from the middleman standpoint, but from a truck, from a transportation, whether the temperatures in the freezer were right, whether it stayed on a dock waiting for it to be moved for too long.

So there are logistical challenges. I think that also needs to be overcome. When you're buying the frozen food in the supermarket, sometimes it feels like it's been frozen too many times. Three times, right? Lumps of ice inside that kind of tell you that the thing became watery. And then it was frozen again. That tells you a little bit about the logistical transportation challenge in that industry, right?

Dr. Darin Detwiler: It's like hiring someone to do a job, right? When we buy a vehicle, we hire it to do a job. Some people that may be work related, some people that may be completely pleasure related. Some people that may be part of their identity even, right? You look at some of these people who own Jeeps or who own pickup trucks, right? They didn't just do any vehicle.

"I am a pickup truck driver."

"I am a Ford this."

"I am a Chevy that."

And we can similarly look at food in terms of: we hire food to not only make sure that we have the critical nutrients to be able to survive, but no one hires food to make them sick. There is an assumption, just like with vehicles, there's an assumption that there is a quality of safety involved in it.

We hire food to satisfy a need. We hire an automobile to hire need. But even from the manufacturer side, a manufacturer of food product or an automobile is hiring technologies to serve certain purposes.

I would imagine transparency and traceability are pretty high on the list. Looking at that, what would be the advantages of having a strong system to keep an overall view on the supply system?

Pedro Ferro: I think that the traceability is really one of the biggest ones. With the advent of these public networks, with all these technologies like IOT, you now have the ability to attach, you know, RFIDs to full packages. So you can basically trace a piece of food throughout the entire supply chain. The supermarket doesn't tell me when the food got there or how many times we has been cross-docked in different trucks. I don't know. I know when it expires. But I don't know when it was made most of the time. Some producers do that, but I think that there's less transparency on the consumer side.

And I think compared to the automotive industry is extreme traceability. Traceability is the name of the game. When you have an accident, a faulty part, you know exactly when the part was made, by whom it was made, where it was made. I think in food, there's a whole investigation. At WQS, I saw some, they helped investigate some of these issues, these spills, as you call. It's a complex endeavor. Involves a lot of people. There's very little data.

So, I think technology has a role to play here. And obviously now with AI, I can give you many clues as to what's going on, if you structure your data. AI is about prompting or preparing the data to feed it. If you feed it bad data, like everything, you know, but if you prompted correctly with the data, I think it can help you do predictive analysis, and that kind of thing. So I think that can help as well.

Dr. Darin Detwiler: Too often, I believe, I've heard about technology and traceability and transparency, and it's talked about, after an incident, you can find out this. You can get back to the source. Do you see value in trying to use these technologies in a predictive way as well as perhaps be able to mitigate risks before they go out to consumers, before they go to their end users?

Pedro Ferro: Absolutely. I'll give you a concrete example that's already happening in the industry. Think about these CRM systems or customer relationship management systems. They predict the customers that are more likely to buy your value proposition, your product or your service. I think supermarkets or restaurants, or let's say the 'points of consumption', they're flying blind without a lot of that information.

They don't really know what is the standard. First of all, they know that the value periods and so forth, but I don't think they have a clear understanding about those aspects, the traceability and so forth. There's systems that can help you do that, but there's not just the computer systems, right?

I think it needs something like a process behind that. That's what we talk about: systems without processes don't do anything for you.

Dr. Darin Detwiler: There's much more for us to discuss about this.

Pedro Ferro: Thank you for the opportunity. Thank you.

Dr. Darin Detwiler: I hope you found this discussion on trust and validation in the food supply chain enlightening. And I invite you, our viewers, to future episodes where we continue to hear from our My Trusted Source advisory board.

Until next time, I'm Dr Darin Detweiler for Trust Bites, presented by My Trusted Source. Thank you very much.