How Prevention-Based Safety Chain Management Technology Increases Compliance Efficiencies
Introduction
Withdrawals, rejections and recalls cost the food industry $7 billion dollars annually – and the majority of these costs aren’t just from “worst case” recall scenarios where people fall ill and lawsuits occur. A large portion of this cost is created by internal re-working, commodity loss, inventory replacement, removing goods from shelves, lost sales and public relations/customer confidence repair.
These losses – and any associated liabilities – are spread across all participants in a particular goods’ supply chain, including suppliers, manufacturers, distributors, retail/services sellers, 3rd party labs and auditors.
And while food safety & quality assurance (FSQA) requirements are only going to continue to grow, most FSQA staffs are not expanding. The challenge therefore becomes “how to do more with less.” In other words, how can I meet my regulatory, non-regulatory, operational and customer requirements while:
• Getting product out on time
• Remaining competitive
• Remaining profitable
The answer? Emerging FSQA software technology innovations such as Safety Chain Management. The food & beverage industry will benefit from viewing FSQA technologies not as an added expense – but rather as a tool with a hard-dollar Return on Investment (ROI) that delivers bottom-line savings while creating efficiencies that enhance compliance.
Food & Beverage Industry Technology Investments
Traditional Investments
If we look at the traditional food & beverage industry technologies, adoption has largely been focused on manufacturing and logistics – supply chain, distribution, procurement and other similar types of software.
The business case for these technologies was ROI-based: they saved time, they saved money and they created efficiencies.
Today’s Innovations
Today’s food & beverage industry technology innovations – particularly Safety Chain Management – are focused on FSQA and have the same business case!
• They save time and manual labor hours
• They save money
• And they create efficiencies throughout your supply chain to enhance regulatory, non-regulatory and customer-driven compliance
The major categories for Safety Chain Management ROI include:
• Time and labor
• Materials and yield
• Risk mitigation – withdrawals/rejections/recalls
• Reporting and analysis
I’ll come back to each of these shortly and describe how Safety Chain Management technologies create ROI. But before we can go there, let’s begin with a high level summary of the key concepts of Food Safety Chain Management to help put the rest of this paper in context.
Key Concepts of Food Safety Chain Management
“At Dole, food safety is always our first priority and we take a pro-active, prevention-based approach. We ensure all food safety programs are followed at the start of every point of production, from planting to harvest to post-harvest. Additionally, we are taking steps that prepare us for compliance with announced and anticipated FDA Food Safety Modernization Act (FSMA) rules. We partnered with SafetyChain because it has the food safety technology innovations, capabilities, prevention-focus and customer responsiveness that meets our needs exceptionally well.” Nye Hardy , Food Safety Manager Dole Fresh Vegetables
The underlying concept of Food Safety Chain Management is to have a single solution that helps enforce food safety & quality compliance at every point along a company’s supply chain, including:
• Inbound supplies and raw materials
• Production food safety and quality requirements
• Compliance associated with customer-driven specifications for outbound finished goods
A key concept of Food Safety Chain Management is that all regulatory, non-regulatory and customer compliance enforcement is done in realtime – promoting prevention. Realtime enforcement is the common preventative thread amongst the five key components that are the foundations of Safety Chain Management:
Concept #1 – Realtime Data Collection
Food Safety Chain Management allows all food safety and quality data to be entered directly into a company’s secure “cloud.” This can be test/attribute data received electronically from suppliers – entered, for example, on mobile devices by field inspectors or production technicians; test results input by laboratory technicians; and even data received directly from internal or external testing equipment.
Concept #2 – Realtime Analysis
Once data/test results are received, the food safety chain solution analyzes – again in realtime – all results against regulatory, non-regulatory and customer specifications. When regulations change – or customers add/change specifications – those specs are easily configured and then cascaded throughout the “safety chain” so that compliance can be immediately enforced.
Concept #3 – Automated COAs and Alerts
When results are in compliance COAs are automatically generated and sent to the next point in your chain. When non-compliant results are detected, automatic alerts are sent to the appropriate, identified people who can be any combination of internal/external individuals, such as FSQA managers, lab technicians/production personnel, distributors, suppliers, purchasing and more.
Concept #4 – Immediate Corrective Action
Because realtime alerts get the right information, to the right people, in the fastest manner possible – immediate corrective actions are facilitated. There are thousands of examples but some simple ones might include: not unloading a shipment of supplies/raw ingredients (or not allowing it to be shipped in the first place); correcting a temperature as it approaches its HACCP Critical Limit; not harvesting a particular field of produce when an alert is received that certain attributes were not in compliance; and avoiding sending a customer a shipment that does not meet one or more specifications – perhaps incorrect fat or moisture content. Think of food safety chain management as a “smoke alarm” in the cloud – preventing bad things from happening in the first place vs. trying to figure out how the fire started and how much it is going to cost to repair the damage.
Concept #5 – Performance and Trending
Because all information is time/date stamped and all results/corrective actions are electronically documented, you are able to gain in-depth access and insight into performance by various suppliers, producers and distributors; speed throughput; and be audit ready on- demand for almost any type of compliance or customer audit.
Now that I’ve described the basic concepts of food safety chain management, let’s now look at the major areas in which this enabling technology provides FSQA ROI along your entire supply chain – inbound supplier and COA management, during production and for outbound finished product testing and customer compliance.
Time and Labor ROI
Today many FSQA processes are manual in nature. Whether it’s checking to see if supplier documents were received … pouring through hundreds of safety and quality test results daily to find exceptions for hold and release programs … monitoring plant floor equipment to ensure attributes like weight or temperature are in compliance … sending finished product specs to customers … and, of course, perhaps the most time/labor intensive – preparing for audits – one thing is clear: time does equal money – and manual processes waste both.
Not only are manual processes time consuming and expensive – they are also error prone, and slow down sales throughput. Safety Chain Management eliminates a large majority of manual processes – saving time, saving money and creating efficiencies that support compliance and the ability to get safe, quality products to customers faster. And, they put time back in your busy day. There are thousands of ways in which Safety Chain Management creates time and labor ROI – but in the interest of time, I’ll just provide two examples in this paper.
Examples of Time and Labor ROI Include:
Example 1 – Supplier Compliance: Studies show that less than 5% of safety and quality data requires action. However it can take hours – and in some cases days – to go through all of the pen and paper reports, binders, PDFs, emails, spreadsheets, etc., to find the 2 or 3 non-compliant results. In the meantime, product is on hold.
• With Safety Chain Management – test results are being entered by suppliers globally; form and visual inspections can be sent directly from the field using mobile devices; and test results can be sent directly to the system from testing equipment.
• Because the results are automatically compared to specifications in realtime – the FSQA manager gets automated notifications of non-compliant conditions or materials. This allows the manager to focus immediately on only those results that require corrective action while COAs are automatically generated for everything else (including completed finished product tests) – creating efficiencies that allow all compliant components to get to the next point in the supply chain and/or process – or “from farm-to-fork” – faster.
Example 2 – Audit Readiness: Let’s use the example of the dreaded “A word” – audit. When you add up regulatory audits, non-regulatory audits such as GFSI, and random customer audits – some companies might face 10-12 audits per year. I’ve personally spoken with FSQA managers who have told me that these audits “bring their organizations to its knees” in terms of the time it takes to gather the policies; review forms and documents; verify Standard Operating Procedures; show proof of corrective actions; and gather and show documentation for safety and quality attribute compliance. This not only takes up staff time in preparing for audits – production and shipping of product is often delayed during audit preparation – so there is cost in terms of time, labor and slow down in revenue-generating activities.
• With Safety Chain Management: scheduling capabilities ensure Standard Operating Procedure reviews/verifications are performed on time; supplier documentation is received on the required dates; all records are time/date stamped and unalterable; non-compliant results are documented electronically along with corrective actions – including before/after digital photos; direct observations can be taken from fields or plants – with information uploaded immediately into the system dashboards via forms; and exception and trending notices for Key Performance Indicators are automated.
• This means that audit information is ready on-demand. Safety Chain Management also facilitates full transparency throughout the supply chain – and may even reduce the number of audits – customer audits for example – because customers can receive all safety information, per your configured parameters – in realtime. And instead of spending weeks on audits – the FSQA team can continue to work on transformational, pro-active (vs. re-active) processes and practices while plants, for example, keep operations and product moving to the next point in the chain.
Materials and Yield ROI
Maximizing materials and commodity yield is critical in the traditionally low-margin food & beverage industry. And unfortunately, manual safety & quality processes frequently result in waste, spoilage, re-work and yield loss.
Safety Chain Management helps increase materials usage and yield in a number of ways, including:
• Realtime analysis of raw ingredient/materials test results helps prevent non-compliant ingredients from going into production.
• Immediate exception or omission notifications – on supplier non-compliant COAs or internal COA verification tests – results in reduced re-working and/or the need to use more expensive materials to meet a customer specification: