Tag Archives: supplier management

Nicole and Scott, NSF

Leveraging Cloud-Based Technology in Supply Chain Management

By Nicole Keresztes James, Scott Arnald
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Nicole and Scott, NSF

In today’s fiercely competitive food and beverage industry, managing tight margins and shifting consumer preferences present major challenges. Add to this the growing incidences of food fraud, increased regulations—including the FSMA Final Food Traceability Standard—and complex supply chains and keeping an eye on the big picture becomes an almost impossible task. From primary producers to manufacturers, retailers and restaurants, companies are seeking ways to innovate and modernize their supply chains while strengthening food safety and quality, adhere to mandatory regulations and audits, and reduce operational costs. Embracing cloud-based technologies and digital solutions can help businesses adapt to new challenges and regulations, while increasing profits and growth.

Going Digital with Supplier Requirements

The FDA’s Food Traceability Final Rule, set to be enforced by 2026, highlights the urgency for industry to streamline its practices and establish digital solutions that collect and quickly provide information in the event of a recall. Supplier and compliance management digital solutions reduce administrative overhead with proactive supplier management. They direct suppliers to use an online portal to register, upload documents, complete questionnaires and communicate with businesses. By implementing these digital solutions, suppliers can also gain access to intelligent compliance engines that detect potential issues by comparing supplier information against company requirements. This data can be used to assess risks and analyze trends and performance of suppliers so businesses can prioritize continuous improvements, allocate resources to the appropriate sectors and make data-driven decisions. Digital solution’s counterpart—manually collecting and analyzing supplier data—poses greater risks for human error and potentially costly operational setbacks.

Additionally, supplier portals aid in supplier-business collaboration and allow for improved communication and consistency among assessors. They also provide access to historical documents and information. Companies transitioning to more sophisticated digital supplier management tools will likely notice a reduction in data errors and misinterpretation of requirements, ensuring the reliability of the information being recorded.

Cloud-Based Quality and Compliance

Cloud-based solutions that offer multiple modules, such as Supplier & Compliance Management, Product Specification and Artwork Management, Issue Management, and Audit Management, can aggregate multiple supply chain processes into a single platform. These solutions are versatile, cost-effective and can adapt to many kinds of businesses in our industry; companies simply choose which module offerings fit their business needs and then have the option to add additional modules when applicable.

Cloud-based solutions also expedite data, documents and records collection in real-time during audits and assessments, allowing for effortless delivery when program documentation is requested or required. With live synchronization of information, including statistical process control data and critical food safety data, cloud-based technologies enable results to be shared among users both onsite and around the globe. They also provide users with a collation of assessment results and corrective action responses vital to the decision-making and review processes.

Protecting Supplier and Client Data

The escalating threat of data breaches—Malwarebytes reported a 607% increase in cyberattacks on food and agriculture companies in 2020—underscores the need for stringent security measures. Therefore, it is crucial that companies choose software tools from a provider that ensures built-in information protection with encryption to maintain cybersecurity and confidence in daily supply chain operations. Looking for digital solutions that adhere to international security management standard ISO/IEC 27001 is a good starting point. Platforms with this high-security certification provide assurance against data loss and offer firewalls and virus and malware protection.

Safeguarding in Today’s Environment

As our industry adapts to new regulations, technology innovations and supply chain risks, we must protect every facet of operations, from food fraud prevention to cybersecurity, with the collective goal of protecting consumers. Utilizing leading digital solutions and technologies, including cloud-based resources, simplifies historically complicated supply chain processes and reduces the risk of errors in supplier management.

While traditional software includes the potential risk of data and security breaches, our industry is safeguarded with leading technologies that are compliant with ISO-IEC 27001 information security management standards, ensuring sensitive information remains protected, and our complex supply chain endures.

Kari Hensien, RizePoint
FST Soapbox

New Tools Help Track Suppliers’ ESG Initiatives

By Kari Hensien
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Kari Hensien, RizePoint

Your food brand may be committed to eliminating single use plastics, lowering your energy and water use and reducing waste throughout your organization. Perhaps you’re using sustainable packaging and donating excess food to underserved populations in your community. But are your suppliers equally committed to environmental, social and governance (ESG) initiatives?

As food brands work to improve their ESG efforts, they must also examine the quality of their supply chains. It’s not enough to meet your own ESG goals—it’s also essential to work with suppliers who are practicing responsible ESG efforts, as well.

In fact, organizations that don’t allow enough time and resources to build and manage a meaningful supplier program put themselves at risk. Without a user-friendly digital system, food brands can’t properly identify inefficient, unreliable suppliers. That becomes costly in terms of revenue, time and your organization’s reputation.

But how can brands definitively know that they’re working with sustainable organizations through every step of the supply chain? The answer is, better supplier tracking and management. After all, food businesses can’t manage what they’re not measuring. In the past, this was difficult to do. Manually collecting, organizing and reviewing certifications was tedious and labor-intensive. And, historically, software solutions were complicated, difficult to operate and their high price points meant that only large enterprises with enormous budgets could afford to use them. They came with long sales cycles and required extensive training. Thankfully, all that has changed.

Affordable and Accessible Supplier Documentation Solutions

Today’s software tools are user-friendly, accessible and cost-effective, finally making it possible for the “smaller guys” to compete with giant corporations. Now, small-to-mid-sized organizations can easily and affordably use the most innovative software solutions in the marketplace to: gather, organize and manage supplier documentation and information in a centralized location; track which suppliers are committed to strong ESG goals and practices; check status and deadlines; ensure compliance; and reduce time-consuming administrative tasks.

These tools allow companies to:

  • Track which suppliers have environmental, sustainability and compliance certifications (and see which ones don’t)
  • Learn more about where their raw materials are coming from, who is processing them and what practices they follow, allowing companies to better understand their entire supply chain’s ESG commitments
  • Find suppliers that have better ESG goals and practices and, conversely, stop working with vendors that are not committed to ESG goodwill
  • See task and certification status for all suppliers and drill down to view this information by supplier, location and material
  • Streamline processes to save time and reduce redundancies, errors and data entry needs for a more efficient, accurate experience
  • Implement software easily and be up and running in minutes, with no onboarding or training required

This is the time to get on board and manage suppliers’ ESG (and safety!) certifications because the FDA is watching and consumers expect good, ethical management. Companies need to know where their food is coming from, if it’s safe and if it meets the latest ESG guidelines.

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For instance, traditional farming is not always environmentally friendly. Some farmers destroy soil, use harmful pesticides, contribute to high emissions from truck transport, waste significant water, etc. Therefore, some food businesses are opting for more sustainable alternative options, such as working with suppliers that embrace vertical farming. As compared to traditional farms, vertical farms use fewer resources, generate lower emissions and reduce transportation needs by locating operations near the point of consumption.

It’s important to know that the U.S. uses more than one billion pounds of pesticides annually in traditional farming, which negatively impacts ecosystems. Many vertical farms grow pesticide-free produce in controlled, protected environments. Vertical farms also use up to 98% less water than traditional farms.

Food Brands with Impressive ESG Initiatives

Chipotle is one brand that goes the extra mile with bold ESG goals. Their ingredients are responsibly sourced and prepared with people, animals and the environment in mind. They bought 35.7 million pounds of local produce—an investment of more than $40.2 million in support of local food systems—and will continue relying on local, sustainable farmers. They’ve also identified key water risk areas in their supply chain to inform their water conservation strategy.

Additionally, The J.M. Smucker Co. is highly regarded for its commitment to ESG efforts. As part of its ESG program, the company is committed to reducing their greenhouse gas emissions, institutionalizing consistent waste reduction activities at their facilities, reducing their use of water and energy and using sustainable packaging. Additionally, through the safe production and distribution of their products, partnerships with farmers and growers and support of hunger-related organizations, Smucker will help ensure people and pets have consistent access to trusted, quality food.

Chipotle and Smucker hold themselves accountable for making business decisions that cultivate a better world. Shouldn’t we all strive to do the same?

Daniel Erickson, ProcessPro
FST Soapbox

Recall Risk Reduction: An ERP’s Role

By Daniel Erickson
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Daniel Erickson, ProcessPro

Consumer safety is of paramount importance and product recalls are a necessary means to this end. Product recalls are a serious, complex, and costly issue affecting the food and beverage industry in the United States. The FDA estimates that there are around 48 million cases of foodborne illness each year—causing one in six Americans to get sick from contaminated food. In addition to affecting public health, recalls have a dramatic effect on manufacturers by creating economic problems, damaging a company’s reputation, and imposing potential legal penalties and liabilities. In the search for a business management solution to better prepare themselves for and reduce the risk of recalls in their operations, many food manufacturers have discovered that technology, specifically ERP software, is key to lowering the risk of food and beverage product recalls.

An industry-specific ERP solution is a centralized business system with key industry features providing a system of record-keeping, with the tools to support the preparation and reduction of recall risks. While a manufacturer is ultimately responsible for a product recall, an ERP solution is essential in supporting and championing overall recall readiness and reduction. With the streamlined and automated inventory, manufacturing, and quality control processes managed within the software, critical steps and data that assist in recall mitigation are documented—including supplier verification records, audit logs, receipt records, quality testing, lot tracking, and shipment logs. The key to prevention of a product recall is preparation, which can be handled efficiently through an ERP’s functionality specifically in the following areas.

Supplier Management

An ERP facilitates best practices for supplier management and risk assessment within the solution to assure the acquisition of quality raw materials from trusted vendors. Its role is to maintain an approved supplier list for each product ingredient, documenting detailed supplier information, quality control test results, and risk level to ensure in-house and customer-specific standards are met. For approved or activated suppliers, information regarding materials that can be purchased through the vendor, applicable certifications, quality control results, and other pertinent supplier information is stored within the centralized data system of the ERP. A risk assessment for each vendor is also documented to ensure that any potential inherent risk(s) from vendor-issued recalls and to finished goods are limited.

In addition to activated suppliers, an ERP solution also assigns and manages qualified alternates to provide vetted selections should a primary supplier’s materials become unavailable. This positions a company well in the supply chain, as the investigative work has already been conducted on other suppliers, limiting the need and risk associated with onboarding an unknown supplier in a moment of crisis. Vendors are recorded within the system and ranked in order of preference and/or risk level so that they can be identified and put into use quickly if a supplier becomes unavailable—providing the preparation and leverage that companies need to mitigate the risk to safety in the supply chain. In a product recall situation, when a supplier notifies a customer of a contaminated ingredient, the supplier management feature within the ERP solution provides for a qualified replacement vendor that can fulfill the needed raw material quickly and efficiently.

Inventory Control

An ERP system offers end-to-end traceability, maintaining a comprehensive record that tracks raw ingredients, work-in-progress, and final products throughout the supply chain using barcode scanning to link product and lot information to batch tickets, QC testing results, shipping documents, and labels. This full forward and backward lot traceability is necessary to provide a documented audit trail imperative to locating raw materials or finished goods quickly within the initial 24-hour time period of a product recall. With full manufacturing, inventory, and reporting integrations, the ERP supports sound manufacturing practices that assist with recall preparedness – maintaining current Good Manufacturing Practices (cGMP), FDA reporting, GFSI compliance, and other industry-specific regulations to provide a documented audit trail with the ability to adapt as compliance requirements change.

Managing protocols to ensure the quality of inbound and outbound materials is essential in minimizing recall risk across the entire supply chain—from raw materials to the delivered final product. With an industry-specific ERP solution, formulas, recipes and instructions are maintained, scaled and verified to ensure consistency of products within the manufacturing process. This instills preventative measures throughout the production cycle in the form of process steps and quality control test specifications to bolster safety and quality. Quality features such as quarantine status and other status capabilities permit the isolating, removing and disposing of raw ingredients and finished goods that fail to meet quality control standards—triggering an alert to notify the purchasing department to investigate the issue. Having the ability to remove ingredients and finished goods from inventory or production prevents contaminated items from reaching store shelves and consumers, which reduces overall recall risk.

Inventory control practices are an important part of the functionality within an ERP solution that help to reduce overall recall risk. This includes managing and reporting of shelf life and expiration dates to maintain precise and lean control of inventory and reduce variances. Automated inventory transactions with the use of an ERP’s warehouse management solution (WMS) follow industry best practices and improve efficiency to ensure the accuracy of shipments, transfers, and material returns. This real-time visibility allows for the maintenance of FIFO inventory practices necessary to reduce the risk of spoilage.

One of the leading causes of contamination for food and beverage manufacturers that results in a recall event is a lack of allergen control throughout the supply chain and production process. An ERP system helps to track, manage and record the handling, storage and batch steps of raw materials from farm-to-fork. This includes stringent sanitary practices, lot tracking, raw material segregation and process controls to avoid allergen contamination or cross-contamination. Accurate product labeling is also a significant factor in reducing risk and an automated system that generates nutritional and product package labels plays a key role in a company’s recall prevention. To meet the needs of consumers and regulators, an ERP solution automates label creation to include accurate ingredient and allergen statements, nutrient analysis, expiration dates, lot and batch numbers, and regulatory specifications. The labeling history documented in the software allows products to be identified and located quickly in the event of a recall.

Reporting

Utilizing the recall functionality in the ERP solution allows companies to plan and test their recall process in advance. Performing mock recalls permits regular measurement and improvement of procedures to ensure rapid, accurate, and thorough responses by all company stakeholders in the event of a recall. A successful simulated exercise identifies 100% of recalled ingredients/products and notifies appropriate entities in a timely manner. Evaluation and documentation of mock recall exercises help expose inefficiencies, process gaps and procedural adjustments, which are designed to improve recall readiness and minimize consumer exposure to potentially dangerous contaminants.

As proof or documentation of adherence to specific processes, reporting is essential to demonstrate that these processes have been completed—without it, an integral component is missing. Across the supply chain and throughout the manufacturing process, documentation and reporting accentuate steps that have been taken to prepare and reduce recall risk. Risk-based assessments in supplier management, lot traceability reports, and mock recall reporting all provide a starting point of analysis to allow for adjustments to be made across the business. In a recall situation, the system is able to create lot tracking reports that encompass raw ingredients through shipped finished goods. These reports can be produced in minutes, rather than the hours it takes if data is stored within separate software programs.

Due to the amount of time and money that food and beverage companies invest in getting their products to market, it is imperative that preventative measures are taken in order to avoid a product recall. Forward-thinking manufacturers can help prepare for and reduce recall risks by utilizing several important features in ERP software—including supplier management, inventory control, and reporting. Using the tools at their disposal, a company can mitigate liabilities and protect their brand to turn a potential crisis into a future filled with opportunities.

Katy Jones, Foodlogiq
FST Soapbox

Supplier Management: Grow Strategic Partnerships and Drive Value Across the Supply Chain

By Katy Jones
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Katy Jones, Foodlogiq

According to a report by Kroll and The Economist Intelligence Unit, 17% of companies experienced some type of vendor, supplier or procurement fraud in 2015. While fraud is one of the more extreme examples of supplier management complications, the manufacturer-supplier relationship is notoriously fickle and can result in serious issues if attention and care is not reciprocal from the beginning.

With great communication and even better processes in place, your suppliers have the potential to become strategic partners for your brand, helping drive your values across the supply chain while also helping you achieve overarching business goals.

Do Your Homework

In order to foster positive supplier relations, it is important to consider all available options and carefully assess them before engaging. In the research phase, it is critical to get as many references as possible to ensure you align with a potential supplier when it comes to safety practices and brand values. Looking at a supplier’s history is an effective way to gauge how your partnership will pan out and catch any red flags before they become a bigger problem for the brand, whether that be poor communication habits, dishonesty about products or inconsistent record keeping.

FSMA deadlines for compliance with the Foreign Supplier Verification Program (FSVP) are right around the corner. With the changing regulatory landscape, thoroughly investigating potential suppliers is crucial, especially if they are outside of the United States, as the stakes are much higher. Under the FSVP, importers are essentially “guilty” until proven “innocent”—a sharp contrast from how foreign suppliers were previously handled by the FDA. The standards for imported food are stricter than ever, as are the consequences for companies that are found working with foreign suppliers without verification. With the FSVP, the FDA can halt all importations completely as long as they have reason to believe the supplier is not compliant with the program.

Communication Is Key

At the cornerstone of any good relationship is communication; the same goes for relationships within the food industry.

Once a supplier has been thoroughly vetted and is officially on the team, the key to maintaining a successful relationship is transparency. Without full transparency with suppliers, you can’t offer consumers reliable information about their food. At the same time, manufacturers need to be straightforward with their needs to ensure suppliers are able to uphold their expectations. By thoroughly communicating plans and expectations, you and your suppliers can effectively work together to achieve future goals.

At the start of a working relationship with a supplier, it is important to comprehensively onboard and train them in your plans and processes to avoid a lack of understanding down the line. By setting up an all-encompassing onboarding system, inclusive of checklists and background documents on procedures and standards, you can help ease growing pains and empower your new food supplier to become a trusted partner. For instance, if you use a specific supply chain technology, your suppliers should know ahead of time so they can receive adequate training on the solution. This will help streamline communication and minimize any bumps in the road.

Regular Check-Ups

While safety and contamination issues are undesirable, they are inevitable. When faced with an outbreak or contaminant in your supply chain, suppliers become your most crucial resource. A poorly handled recall can wreak havoc on a food manufacturer, with the potential to ruin a trusted brand. Having the correct protocols in place with suppliers to ensure proper procedures are followed quickly and efficiently is critical. In order to make sure suppliers are complying with standards, keeping complete records and maintaining proper safety practices, it is essential to perform regular supplier audits.

With the addition of new technologies in the last few years, monitoring supplier performance and implementing corrective actions has never been easier. There are companies that offer supplier management and food safety management software to enable manufacturers 24/7 end-to-end visibility into their food supply chain and suppliers’ practices, while simplifying communication. Supplier management software offers a single platform that allows a brand to safeguard important supplier documentation, submit proper records to regulators when audited, streamline supplier audits and compliance records, and communicate corrective actions.

Overall, supplier management software with end-to-end supply chain visibility is a great way to keep up with suppliers and rest assured that your company’s food safety guidelines are being followed at all times.

Keeping Consumers Safe and Happy

With the current state of food safety, keeping suppliers in check is absolutely crucial for brands. As the FDA is increasing regulations with the adoption of FSMA, manufacturers must be able to trust their suppliers to uphold these new standards. If there are any slip-ups, your brand is held accountable. At the same time, with the increasing number of high-profile recalls and foodborne illness reports, consumers are on high alert, and winning their trust is harder than ever; today’s conscious consumer expects total transparency from their food brands, something only achieved through a strong supplier management program.

Fortunately, given advancements in technology, manufacturers can now foster more proactive relationships, assess supplier performance and achieve mutual goals across the chain smoothly.

While good supplier management requires time and resources, it is worth the investment. Putting in the effort to foster strategic partnerships with suppliers is key to mitigating safety and contamination issues, meeting the FDA’s regulations, as well as keeping consumers safe and happy.

John Kukoly of BRC Global Standards

Where BRC is Going, and How Can You Get There?

By Sangita Viswanathan
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John Kukoly of BRC Global Standards

Food Safety Tech (FST): We’re very excited to have you participate in the SafetyChain/ FoodSafetyTech’s GFSI Leadership Webcast Series with the October 24 BRC – The Road Ahead webcast. We know that you’ll first be addressing what is new with BRC today. What are some of the things you’ll be talking about in terms of current changes?

Kukoly: We are just on the cusp of releasing Issue 7 for BRC. This is scheduled to be released in January 2015. With this, there will be some changes made to how food companies and facilities can obtain the BRC standard. We have a really unique system, termed BRC Participate, that we propose to unveil during this time, which I will talk about more during the webinar.

FST: We know that audits will be a topic of many questions. Is BRC planning changes to the way it does audits? What are some of audit-related topics you’ll be addressing in the webinar?

Kukoly: One of the changes I will be talking about is the auditor-competency program. Other topics will include expansion of our unannounced audit program. BRC is currently the leader in this area, and Wal-Mart has specifically asked us about this. We have done such audits in over 600 sites already, and are currently the go-to people for unannounced audits now. We are also forming BRC Global Markets, which will help small and less developed companies to get ready for certification.

FST: You will also be talking about the direction of BRC in 2015 and beyond? Is there a “theme” or specific set of business drivers that are driving future changes to BRC?

Kukoly: In my opinion, the two most critical areas of focus for the food industry right now are risk management and supplier management. These are the two main key elements being covered in all new regulations under development, and if a food facility has these covered, then they are in a good place. These are the two specific drivers that are shaping future changes to the BRC standard.

FST: While we all know that while change is important, it’s not always easy to get already-burdened food safety organizations to embrace change. What are some of the things we’ll learn in the webinar about why embracing change is critical to the ongoing success of BRC certification?

Kukoly: I don’t think ‘why’ should be the right question. We should focus on ‘HOW’ to go about this. And I think we need to talk about food safety culture and change management. These are the areas that are key to success and embracing change.

FST: We know that you’ll be providing advice on how companies can start today to prepare for tomorrow’s BRC. Can you tell us some of the topics you’ll be addressing in this part of the webinar?

Kukoly: One of the topics I will be addressing is training, not necessarily for BRC, but for obtaining the right skill sets such as risk assessment or HACCP. These are necessary for any food manufacturing organization to prepare for tomorrow’s BRC, and to have robust systems and processes in place.

FST: It has been said that GFSI certification is a very good start to preparing for FSMA compliance. What are some of the key points you’ll be addressing when it comes to FSMA compliance and alignment with BRC?

Kukoly: If you look at FSMA expectations, they are very well aligned with requirements of BRC standards, whether it be supplier management and verification requirements, or risk assessment etc. Beyond that, it is about strength of traceability procedures, knowledge of FSMA within the facility and its qualified individual. The focus is primarily on robust supplier management programs and implementation. If all these are in place, then you are in a very good starting place for FSMA compliance.

Listen to John Kukoly talk more on these topics and take your questions live in the BRC – The Road Ahead webinar on Friday, October 24, 2014 at 10:00 PT/ 1:00 ET. Click here to register.