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Tim: Dan, One of the major concerns about PTI has to do with cost of adoption. The cost concerns seem to cover three primary areas: Startup costs, Hardware/Software costs and the Human Resource cost. How do you respond?
Dan: In terms of the overall business change process for all trading partners, PTI is not free. Costs are being analyzed as the pilots are conducted. Some of the overall costs are for S/W and H/W upgrades may take place regardless of the PTI. Technology is constantly changing and businesses must upgrade their internal capabilities in order to be competitive.
Tim: Can you elaborate?
Dan: Yes, it depends on current technology being used. As with all hardware/software you can get entry level or all the bells and whistles. Purchasing agents must do their homework. This can also be viewed as an ERP play and upgrade for the company's future - investment
Tim: And the costs related to adding people to handle PTI?
Dan: This depends on each operation as to when and where the labels are applied. Automated, in line with direct print? Slap and ship? etc. In other words, it depends on the commodity. PTI has to start at the top of the organization, so there is a cost associated with part of each individual's time in the organization who is involved in PTI implementation.
Tim: Any other cost related concerns?
Dan: Due to the economic landscape some companies are in a "no-purchase" cycle or have not been in tune with such a cross functional, large scale initiative.
Tim: One of the things we hear a lot is feature creep or trading partners asking for label information beyond what is needed to attain whole chain traceability.
Dan: The Working Groups are composed of players from all sides of the market place so we can attain an agreed upon format to attain whole chain traceability. Requests for additional information on the PTI labels by trading partners are business decisions and not part of the PTI process and must be addressed as such.
Tim: Will imports be held to the same standards?
Dan: FDA certainly has more power now over imports and buy side trading partners should demand the same (PTI compliance) from all supply side partners. That is one reason GS1 is at the table as they have Member Organizations in over 110 countries and everyone speaks the same "standard" language.
Tim: Are all trading partners engaged in the PTI process?
Dan: The biggest issue, in my opinion, is that individuals on the sales and buying desks are not informed internally of the PTI process and intended results and certainly have different metrics they are measured against. Many companies have Operations, IS and Purchasing involved but not the individuals who talk to each other daily about the business. Some companies are not "joiners" so don't belong to industry associations, attend industry events or read trade publications and have only heard cursory "stories/theory" of PTI but no working knowledge.
The Association Industry Group was created to help inform the industry via regional grower/shipper/terminal/trade associations. There is also the Communications Working Group who engages with the press to provide educational material and is working towards establishing webinars for industry education.
Tim: Thanks for your thoughts. Any closing comments?
Dan: The bottom line is that with 18 pilots we will be able to put more definitive answers to the trade questions and concerns. We do have early adopters (looking at PTI early adoption as a marketing advantage) and some who see other business reasons to invest in new and improved systems that will help their business be more efficient and in the long run more profitable. There are receivers who have figured out milestones 6 & 7 but are not tooting their own horns over it and expect trading partners to be in line with the milestones. Many shippers are ready to go and some are labeling certain commodities already. I'm here to help and can be contacted at 425/629-6271 or at dvache@unitedfresh.org.
