Is Intentia Truly Industry’s First In Food Traceability?

Event Summary

As a result of their acquisition of 49% of the Norwegian software company Scase on March 15, Intentia International AB (XSSE: INT B), a Swedish provider of enterprise business applications, has announced that it is the first Enterprise Applications provider to offer an integrated system for origin tracing of food items.

According to Intentia's John Gledhill, Food & Beverage Industry Application Manager, "With the pressures now being created by the consumer and governments throughout the world for transparent traceability, our solution has the ability to track the individual carcass from farmer to the supermarket shelf, collecting all relevant information from each stage in the production process. These include veterinary control, slaughter, freezer, de-boning, processing and packing. This information is then extended, using integration with external animal passport databases, such as those being created within the EU to give the consumer the total view of the history of any animal. These details include, its origin, the breed, where it has been throughout its life, veterinary records, slaughter information etc. This information can then sent by e-file to each store when a delivery of meat, fish or poultry is made, this will give the consumer (in store) the ability to buy with total confidence."

New functionality will be incorporated into Intentia's flagship Movex Food & Beverage product suite and be further refined. Intentia touts that Scase will provide it with a combination of depth, breadth and specialized know-how in applications for managing meat, among other products, that no other supplier of business systems can offer.

Market Impact

Intentia is clearly trying to capitalize on the media coverage of mad cow disease and foot-and-mouth disease frenzy in the EU. While it is correct in stating that this announcement can assist its livestock processing customers (especially in the EU) in tracing product from the farm to the consumer, its "first to market" claims are a bit overstated relative to the food industry in general. While we endorse Intentia's attempt to market the Movex product with more boldness that is rather characteristic of its US-based counterparts, we believe that the company should have emphasized other more valid merits to differentiate its offering and attract the market attention (e.g., Movex' openness).

Intentia's announcement claims applicability for the entire food industry, but actually appears to be very targeted to the live stock markets of red meat and pork within the meat processing industry. The announcement extends the lot tracking functionality available in Movex backward in the supply chain toward to the source of the animal, e.g., the farm. Yet, the lot tracking capabilities of many ERP products provide the infrastructure which can accomplish most of what Intentia claims as a first in the marketplace. Early process-manufacturing oriented ERP (MRP II) products like BPCS, Datalogix and PRISM provided the majority of this in the early 1980's. Today, ERP products from process-oriented vendors, for example SCT and Ross, provide this functionality and more. Even some non-process specific products from companies like J.D. Edwards and SAP address most of these requirements.

The challenges for a food manufacturer in providing tracking from the agricultural source (farms, feedlots and fisheries) to the consumer have not been primarily systems issues. The primary problems are derived from the lack of procedures, both within the company and at all levels of the supply chain, to identify the product (product identification, labeling, location management, etc.) and to gain access to the required information in the first place. To that end, the Intentia's announcement indeed appears to address some of these challenges within the supply chain that starts with livestock.

Some system issues do impact the users of some ERP applications though. Regulatory requirements for full product tracing varies by type of product and country, but may include for example, the identity of the source (farm), where in the warehouse (slot location for example) a specific product was stored, which piece of production equipment was used in processing the item, which truck did it go on, etc. Integration of quality data is an important part of the requirements, and the Intentia's announcement appears to address many of these requirements, as do several of its process oriented competitors. However, the fact remains that not all ERP products have the facilities to store or trace product based upon this level of information.

Jim Brown, VP of Marketing of SCT Corporation, Process Manufacturing & Distribution Division, states, "Our many customers in the meat industries have taught us that product traceability from the farm to the consumer is a key requirement. These customers use Adage to fulfill their traceability commitment to the consumer. We see Intentia's announcement as helping the meat industry and the consumer focus on this critical need."

User Recommendations

Existing Intentia customers who are in beef or pork meat and possibly the other meat or food industries should evaluate this offering. It appears to be a valuable extension to Movex for these specific customers. Meat processors who are looking for a new ERP system should add Movex to their long list of potential products. However, this announcement is not a reason for other food processors or other enterprises who are looking for a new ERP system to add Movex to their long list.

More general recommendations for both current and potential Intentia users can be found in Intentia Possibly Seeing Daylight.

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