Tag Archives: risk management

Bob Burrows, Chainvu
FST Soapbox

Five Steps To Overcome the Catch-22 Dilemma Of Blockchain Adoption In Your Food Supply Chain

By Bob Burrows
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Bob Burrows, Chainvu

Have you ever heard the saying, “It takes a village to raise a child”? This saying can easily be adapted to blockchain in the food supply chain, only it would say, “It takes a village to do blockchain successfully.”

Blockchain, by definition, requires the collaboration and consensus of all of its participants. If you look at a commonly accepted definition, blockchain is a sequence of consensually verified transaction blocks chained together, with each of the supply chain members as an equal owner of the same transaction data.

In the food supply chain context, this means that all supply chain participants—from the farmer/grower to the retail store and, in some scenarios, even the end consumer—have to be part of the blockchain or it will fail.

But therein lies the problem.

The Blockchain Catch-22 Adoption Dilemma

While blockchain has the potential to revolutionize the food industry (e.g., the way we handle food recalls), it puts innovators in today’s complex food supply chains in an awkward Catch-22 dilemma.

Unless you are Walmart or another equally big force in the food industry with the buying power to demand that your suppliers adopt blockchain, you cannot implement blockchain successfully without your entire supply chain joining you. But oftentimes, your partners (and sometimes your management) require the commitment of all others jumping on the blockchain bandwagon.

While this situation could feel intimidating, those obstacles are usually easily overcome with the right arguments presented in a sound business case. I want to share with you five tried-and-true steps to get even the most reluctant technophobic supply chain member excited about blockchain and ready to sign on.

1. Clearly Outline Risks Across the Entire Supply Chain

One of the biggest (and most expensive) mistakes companies make when adopting blockchain is to adopt a new technology purely for the sake of it. Therefore, the starting point for any negotiations should be to outline the real business problems you are trying to solve. Put yourself in the shoes of your partners’ management and explain the problems from their perspective.

But don’t try to boil the ocean—just focus on two or three main issues that could either have disastrous (as in business operation/reputation-destroying) consequences or become extremely costly issues. Additionally, you could include a short list of secondary issues to preempt questions about other concerns.

For example, facing a food safety incident and the associated food recalls could be your primary issues. Secondary issues might be product integrity and spoilage (due to the long transit times and possible temperature fluctuations along the way), compliance with government regulations regarding cost and resources, and the consumers’ demand for transparency and traceability.

2. Calculate the Cost of Doing Nothing

Once you have identified the biggest risks, it’s time to put some numbers on paper.
Let’s stay with the example of food safety and recalls. According to the Grocery Manufacturers Association, the average food recall in the United States costs businesses $30–99 million, which only includes direct costs from retrieval and disposal of recalled items without taking additional expenses for lawsuits, reputational damages and sales losses into account.

What would a recall scenario look like for your company, and what costs would be associated with it? What does your liability management for this scenario look like across the entire supply chain? Walk through the scenario step-by-step and put down realistic numbers. Be sure you can back it up with real data at any point in time.

3. Explain the Proposed Solution (Without Getting Too Technical)

Now that you have outlined the biggest risks and walked them through the numbers, it is time to present your proposed solution. When doing so, keep in mind that most people who are not very familiar with blockchain think immediately of Bitcoin and cryptocurrency—including the hype, unpredictability and hacks.

Rather than leading with technical explanations, try to first explain your solution from a business perspective without using the word “blockchain.” Frank Yiannas, the former Walmart vice president of food safety and now deputy commissioner, food policy and response for the FDA, once described blockchain as “the equivalent of FedEx tracking for food.” This is the level of technicality you want to hit.

Once you have buy-in for the overall approach, you can lay out the technical details including how blockchain, IoT-enabled sensors and smart contracts fit into this picture.

4. Showcase Lowest Hanging Fruit First, Then Define Long-Term Benefits & Soft Savings

Pat yourself on the back—you have just overcome the biggest hurdle in the process. Now it is time to bring the deal home by laying out the quick wins (low-hanging fruit) and the long-term benefits.

If you implement a blockchain solution paired with smart sensors to constantly monitor your product’s temperature, shock impact, moisture and location, a huge quick win could be the ability to immediately identify any potentially spoiled or compromised items. All members of the supply chain could get an instant notification if an exception occurs.

While listing the immediate benefits and calculating potential savings is crucial for getting buy-in, the long-term benefits are also important. For example, you could point out that consumers (especially millennials) are willing to spend more money on brands that offer more transparency, brands they can trust (e.g., authenticity of extra virgin olive oil), and brands they can trace back to their origins (provenance).

In addition, there are also efficiency gains through blockchain. When speaking to your own management, point out the ability to improve your own operations due to the increased level of automation, as well as the opportunity for improving the overall supply chain efficiencies by collecting data across the supply chain.

Just be sure that your benefits correlate with the problems you had outlined initially.

5. Have a Detailed Adoption Roadmap

Last but not least, be prepared to have a detailed adoption road map. This is crucial, as it allows you to take their enthusiasm to the next level. All the other steps are for nought if this isn’t put into action. Go the extra mile to set your project up for success and map out the key details, including:

  • Proposed project timelines (e.g., onboarding phase, trial start and end dates, decision deadlines),
  • Must-meet milestones and key performance indicators
  • Expected road blocks and how you will address them

While this puts extra responsibility on your team, it allows you to keep driving the project forward and at least bring it to a trial or pilot stage that will give you more tangible benefits.

Conclusion

Whether you follow these tips step-by-step or you pick and choose, I would like you to take one thing away from reading this: While there is tremendous potential in blockchain, don’t implement it purely for the sake of catchy headlines or bragging rights! To get your supply chain partners and executive management on board, you must tie the implementation to relevant business use cases to achieve tangible results.

Richard Wilson, AuditComply
FST Soapbox

Why SaaS and Food Safety Are A Perfect Match

By Richard Wilson
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Richard Wilson, AuditComply

Food manufacturers, what’s keeping you up at night? What’s the one issue that could damage your reputation so badly that you lose customers? The answer: A food safety crisis that at best, requires your products to be recalled and at worst, puts valued consumers at risk.

Similarly, if you’re a global supply chain manager, what’s your number one worry? The answer: Maintaining continuous compliance with industry standards, meeting increased regulation requirements, or maybe it’s a key supplier failing their BRC audit?

Whatever it is, we all know food manufacturers are under increased pressure, facing multiple internal and external challenges in an ever-changing complex environment. Challenges such as price volatility, stronger competition, increasing customer demands, complex supply chains and globalization are all taking their toll.

Furthermore, to add to this increasing pressure, organizations are still relying on paper-based systems and manual processes to help manage their risk, quality and compliance, and even their environmental health and safety (EHS)! This approach is inefficient, makes the audit and compliance process costly and difficult to scale, while compromising quality and complicating traceability. It’s time to take advantage of the digital age and relieve the pain and pressure of traditional risk and compliance management with a SaaS (software as a service) solution.

What is SaaS (Software as a Service)?

SaaS providers use the internet to deliver their bespoke software offering, usually in the form of a subscription-based service with a monthly or annual fee. The main benefit of SaaS is the cloud, being cloud-based software, upgrades and fixes are managed by the software provider, reducing or eliminating the need for an IT infrastructure—all your data is readily available in real time, on one centralized platform. SaaS is delivering more visibility and mobility without hassling organizations with the details and streamlining software integration across the globe.

SaaS solutions have become a game changer in modern risk management, and the following points illustrate why.

Speed of Deployment

Food and beverage manufacturers require a SaaS solution for multi-site global deployment with complete local management. A SaaS solution will graft onto your business processes immediately. No additional IT hardware should be needed, which means you don’t waste your time procuring and installing an IT infrastructure for multiple sites to benefit. It’s important to remember that the food and beverage industry is moving fast, so if your chosen SaaS solution requires months or years to implement, you’re talking to the wrong people. There is a common saying at my company: “We don’t count in months or years, we count in hours and minutes”.

Providers that offer traditional, on-premise solutions, require extensive configuration and bespoke coding to map to the client’s needs. Long rollout and deployment cycles are inherently expensive to maintain and have poor user experience. This is the reason most consumers revert to Excel/Word and Sharepoint, ultimately losing the ability to manage consistently at scale across their real estate. With an RPM (risk and performance management) SaaS solution you can expect a fast deployment with a comprehensive and configurable enterprise workflow from day one.

Staying Up to Date Is Automatic

Your chosen SaaS provider manage your entire solution from their side, which means upgrades, fixes and customization requests are immediate and automatic. Again, reducing or eliminating, the resource needs of an IT infrastructure. Organizations will have the advantage of immediately being able to utilize the latest features the SaaS solution has to offer. These upgrades will often be driven by feedback from users as organizational and industry requirements change. On-going system development will be crucial to staying in, and assuring, compliance and risk mitigation.

As a food manufacturer, it is important that your SaaS solution comes with a comprehensive document control library—a feature that will always be automatically updated by your SaaS provider. When you are conducting assessments in the field, many users require the ability to refer back to specific document types such as manuals, procedures, work instructions and the latest standards or regulations. These documents should be all managed by your SaaS provider, with teams consistently reviewing and updating important industry documentation on the platform for any user out in the field.

Ease of Use

Proofs of concept are crucial. Living in a world where we have an abundant amount of choice, organizations need to know their chosen SaaS solution has the ability to meet requirements and demands of both the organization and industry. This is made easy with SaaS, allowing organizations to test the software functionality in advance of purchase. Even for large food manufacturers, SaaS offerings can be used to test the software before it is purchased, and there should be no limit to the amount of trial users. The right risk and performance platform will also allow your team to upload specific templates, allowing new users to be familiar with assessments provided on the platform, easing your transition to a digital format.

Mobility and 360o Visibility

For further flexibility, popular SaaS providers will offer their solution in mobile format. Assessments conducted on the platform should be seamlessly synchronized between smartphone, tablet and desktop, allowing you to start an assessment on one platform and then pick it up on another. Users are no longer restricted to one location and can access their robust platform from any device, online or offline. We know that many companies are operating in

harsh environments, whether it’s the scorching temperatures of the Sahara desert or the blistering wind chills of northern Canada—your SaaS solution needs to come equipped with the right tools. By utilizing SaaS mobile offerings, organizations gain full visibility of their risk profile, making room for a culture of continuous compliance whether they’re in the field or back at the office.

Scalability at a Lower Cost

Implementing a SaaS solution means all your data is securely stored in the cloud. This provides scalability to match organizational growth strategies. Food manufacturers can add more users as their business grows without ever thinking about changing the hardware or requiring a full IT department for assistance. However, although SaaS offerings are provided at a lower cost than traditional solutions, each platform has its own rates, so shop around for a solution that will best suit your budget and requirements.

Bottom Line

Cloud-based software models have made risk, quality and compliance more affordable and flexible, considerably improving and streamlining business processes worldwide. Next time you are evaluating a SaaS solution for your food and beverage organizations, remember, the providers are staking their own survival on the software platform working. Whether it’s the protection, security, availability or performance of your data. Providers want to make their platforms a hassle-free and secure option for any food manufacturer looking to thrive in this demanding industry.

Relieve the pain and pressure of traditional risk and compliance management: Realize your investment from day one.

Randy Fields, Repositrak
FST Soapbox

How Your Approved Supplier Program Can Reduce Your Risk

By Randy Fields
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Randy Fields, Repositrak

Editor’s note:
Randy Fields, Chairman & CEO of Park City Group and CEO of ReposiTrak, will be featured in the keynote panel on the past, present and future of food safety journey at the upcoming Food Safety Consortium November 29, 2017 in Schaumburg, Il. He will discuss how to leverage technology and an approved supplier program to reduce a company’s risk. Here’s a preview of some of that content.


Everyone in the extended food supply chain, from ingredient and packaging suppliers through manufacturers and ultimately to the retailers or foodservice operators work hard to ensure the safety of the consumer. It’s why they’re in business. These companies also work to understand the various risks inherent in the supply chain and deploy comprehensive and repeatable processes designed to reduce the potential impact of those issues.

Selecting suppliers has inherent risks, so a comprehensive process is needed to mitigate any threats. Without properly vetting potential suppliers, companies may encounter existential challenges without the right tools needed to survive.

One of the most important areas for this risk mitigation is the approved supplier program which helps to ensure product quality standards are met. These programs are also required under the Preventive Controls portion of the Food Safety Modernization Act.

A best-in-class supplier approval process includes certifying suppliers, monitoring external and internal risk levers, continual and repetitive analysis to determine how programs are affecting the business and mitigating risk by planning for potential disruptions. It needs to be proactive and predictive to address the ever-changing consumer and business environments.

A successful supplier approval program attempts to address every foreseeable risk concern, from product recalls to supply chain disruptions. It is typically based on a standardized checklist that includes a comprehensive list of questions to assess a supplier’s food safety and quality systems. Sample questions focus on items like food safety certificates, compliance documentation, quality assurance programs, HACCP plans and third-party audits.

Supplier and product risk assessment is a critical element of the supplier approval program. Companies need to examine hazards that could contaminate products or create issues related to allergies. The risk assessment is usually a scorecard that establishes a series of levels and a baseline under which a supplier is not acceptable.

To ensure accuracy and consistency throughout the onboarding and subsequent procurement processes, companies should have a single repository of supplier information. Having a centrally located database of supplier information and required documentation will not only increase efficiency, it can help maintain compliance and give your organization the visibility it needs to take action. This database should include details on the approved primary suppliers and any potential risks associated with the supplier or its products. The system should have a process to conduct ongoing monitoring of suppliers to ensure that agreed upon standards are maintained.

Once the supplier approval program is up and running, it needs to be monitored constantly or the risks companies are trying to mitigate will return. Managing risk is not a one-time event., nor is managing supplier information. Implementing a process where established suppliers will update their information annually will help ensure companies are working with the most current information.

The bottom line is that a company’s reputation may be tarnished if there is a product recall or worse. Ensuring approved procedures and processes are followed every time a new supplier or product is considered will greatly help to mitigate the risks involved.

Environmental Monitoring Programs and The Cost of Failure

What happens when a food company does not have an effective environmental monitoring program in place? The cost of failure can be significant, warns Prof. Ann Draughon, ranging from placing contaminated food in the markets, to managing product recalls, and businesses getting shut down.

Effective Environmental Monitoring, Sampling and Testing (EMS) Programs are absolutely necessary to protect our consumers, and make safe food, and are also required from a regulatory and food safety point of view, and to verify that our food safety programs are working.

In a recent webinar, Prof. Ann Draughon offered some insights on what happens when such an EMS program is not set in place – the cost of failure is much greater, and the repercussions can be severe, she warns.

What is on the horizon with EMS given the new regulatory landscape under the Food Safety Modernization Act and the proposed rules? Prof. Draughon talked about the Mandatory Preventive Controls described in Section 103 of the Act that lists the following controls that FDA will require:

  • Environmental monitoring programs;
  • Sanitation and cleaning requirements;
  • Allergen control;
  • Mitigation of hazards; and
  • Supplier verification.

How will FSMA affect FDA’s regulatory sampling of food facilities and products? The volume of environmental samples will increase at a much higher rate than sampling for allergens or ingredients, she adds. And in order to meet such a high demand for environmental inspection and sampling, it will be important to have in place effective EMS programs. Prevention will be cost-effective and give companies the ability to detect and destroy the microorganism before they cause any issues. Prof. Draughon provided the following numbers as cost of reinspection: $224 per hour for domestic inspections, $325 per hour for foreign inspections, and cost of FDA reinspection in FY 2012 estimated to be around $21,000.

She described two case studies of companies that suffered bankruptcy, and business losses due to massive food safety related recalls, caused by inadequate or lack of environmental monitoring programs.

3M-Envi-Monitoring_March2015-1

“This company is currently bankrupt due to a massive recall. While they had a great food safety plan, they did not back it up with a strong EMS program,” Prof. Draughon explained.

Speaking about the second company, she explained that the strong and capable leadership had done everything right for the company, but what went wrong? “There was a:

  • 3M-Envi-Monitoring_March2015-2Lack of trend analysis of environmental data;
  • Lack of communication within company about any positives Listeria results;
  • Sporadic Listeria positives occurred – while the problem was fixed, they continue to reoccur and the source was never detected or fixed;
  • The company had a reactive EMS, but not proactive,” she explained.

What are some of the recurring problems due to ineffective EMS programs? Prof. Draughon listed these as:

  • Increased risk of recall;
  • Increase loss of product;
  • Increased liability exposure;
  • Build-up of pathogens and spoilage agents or chemicals in environment;
  • Lack of regulatory compliance; and
  • Reaction to problems, not prevention.

Based on this high cost of compliance, Prof. Draughon strongly recommended establishing an effective EMS program, which has the following attributes:

  • Focus on having the appropriate indicators and hazards;
  • Ensure the best procedures selected and validated;
  • Strong sampling plan, which is well-designed and dynamic;
  • Data analysis and data management; and
  • Education and training.

Learn more by listening to the series of webinars on Environmental Monitoring, presented by 3M Food Safety. Click here for more details.

Katie Moore, Intelligent Platforms’ Global Industry Manager for Food & Beverage, GE

Big Picture Understanding for Better Food Safety

By Sangita Viswanathan
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Katie Moore, Intelligent Platforms’ Global Industry Manager for Food & Beverage, GE

Having worked in the food & beverage industry as a plant manager, Katie Moore knows just how important food safety is to a company’s brand and profits. As GE Intelligent Platforms’ Global Industry Manager for Food & Beverage, she uses today’s connected technology to help prevent food safety issues and expensive recalls.

Companies want to do the right thing and try to control what is known. They want to mitigate risks when possible. But without a clear and complete line of sight to real-time process data and information, like whether or not your HACCP processes have been followed, correctly, each and every time as stated in your HACCP Plan, how can you truly have peace of mind going to sleep every night? That’s the gap that’s plaguing food companies and managers, says Moore.

Against the backdrop of evolving food safety rules under the Food Safety Modernization Act, Moore sees manufacturers in the food and beverage industry in a wait-and-watch mode.

“Since these rules are still in the process of being finalized, everyone’s waiting to see what the final regulations will look like. This is the right time for manufacturers to educate themselves, and implement new steps and programs to assess and mitigate risk,” she explains. Moore feels larger companies are much better at addressing these changes, because of having greater resources or collaborations with industry associations, while small and medium sized companies are continuing to implement HACCP and GFSI standards, but are a step or two behind their larger counterparts.

There is a lot of risk management going on, and it all begins with HACCP, says Moore. But a gap she’s noticing is a lot of records still being paper-based.

“There is still a lot of work being done on paper. And data is not being transferred automatically. Because of this, there is no way to go back and learn from what’s going on and identify trends and issues. There is truly no electronic capture of data. This lack of learning and understanding of trends and changes is a big gap,” Moore adds.

A lot of recent recalls are due to supplier problems, so everyone focuses on that. Companies are managing the biggest risk, which is their suppliers, and there are a lot of solutions available to manage supplier compliance. “But true value can be realized when this is tied in with your manufacturing processes and specifications. How is the food handled in my line, my tanks and my processing facility…. If companies have this continuous visibility it will contribute to food safety and quality improvements growing by leaps and bounds. And also companies will be able to track and trace throughout the process, and react a lot quicker,” she describes.

Mergers and acquisitions in the F&B space

These days, there is a lot of consolidation happening in the F&B space. Historically, whenever there is a merger of two food companies, there is a challenge to have in place a sound business continuity plan. For instance, Moore asks, if there’s a recall, then how do we react? If there is an issue isolated to one facility, how can we cover our bases and mitigate risks? How can we make sure our customers get our products? From an IT perspective also, there are some challenges that need to be addressed. For instance, what GFSI scheme are we using? Do we merge these two standards and our supporting IT infrastructure, or continue to work with two separate standards? The key in making this decision is to utilize big data analytics to determine which process has been working most efficiently and to factor in the cost of replacing or retrofitting the extremely expensive manufacturing equipment.

According to Moore, F&B managers need tools that can help them improve compliance to food safety, have better visualization and hence greater visibility either on the plant floor or via mobile platforms, have the ability to pull up a wide range of information and share it with people. F&B companies usually handle a wide range of project management systems, typically working on different software from different vendors.

At GE Intelligent Platforms, Moore says, the products ‘talk’ to different systems and data management software to try and address the challenge of collecting, managing and trending large amounts of data.

So are companies embracing technology solutions to better manage food safety and quality? Moore feels that a driving force is lacking.

“Once something happens and FDA has to react, the chips will start to fall. There will be a lot of recourse to technology that will be required, but right now there’s no driving force. Once FDA puts the hammer down on electronic documentation, F&B companies will start to move faster,” she sums up.

Melanie Neumann, The Acheson Group and Syed Hassan, PepsiCo

Are You Effectively Managing Supply Chain Risk?

By Food Safety Tech Staff
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Melanie Neumann, The Acheson Group and Syed Hassan, PepsiCo

While there are many tools available to help food and beverage companies manage their supply chain, the integration of electronic systems in ensuring effective connectivity can be a challenge. During a Food Safety Tech conference, a panel of industry experts shared their perspectives on how to use tools to manage and communicate recalls, and the importance of focusing on a food safety management system. Melanie Neumann, executive vice president and chief financial officer of The Acheson Group, cited recall communication programs such as Rapid Recall Exchange and Recall Info Link. “They’re great programs in that they The 2015 Food Safety Consortium Conference (November 17-20, 2015 in Schaumburg, IL) features topics on supply chain risk and vulnerabilities. Register now communicate outbound, downstream to the recipients of recalled products. It gets [product] out of the hands of potential consumer purchasers and consumer consumption,” said Neumann. “Here’s what it doesn’t do: They have no way of knowing whether or not they’re communicating out all of the affected product. It still comes back to industry’s responsibility in effective supply chain management to know you’ve captured all of the affected recalled product that those systems are then used to communicate outbound.”