Italian wine makers are the first to use DNV GL’s blockchain solution MyStory, which allows consumers “to have instant and in-depth access to key products characteristics such as quality, authenticity, origin, ingredients, water and energy consumption and more, all verified by DNV GL along the entire transformation process,” says DNV GL’s Business Assurance CEO Luca Crisciotti. By scanning a QR-code, consumers can see the full history of the product and its journey from grape to bottle.
From farm to fork, food produced today goes through more hands than ever before. A greater number of players in the production of even a single product could increase that the risk for foodborne illness. Not only do companies need to check incoming and outgoing products from their own facilities, but they also need to consider whether products that they are importing from other countries are compliant with local regulations, and whether the products that they are exporting are compliant with the regulations of the destination country.
The current traceability standard of “one step forward, one step back’”is less and less suited for the current global marketplace, and governments are demanding more. Handling all this information is a challenge for food producers of all sizes, around the world.
Taking Traceability Global with FSVP
Needless to say, with 600 million people contracting foodborne illnesses every year, there is a dire need for food traceability and transparency in the food supply chain. If and when something goes wrong, traceability gives oversight agencies greater visibility investigating the root causes of an outbreak to prevent further risk to the public. It also allows companies to minimize the financial impact of a recall if they are able to pinpoint exactly which lot numbers of their products are affected.
In response to the changes in the food industry, in 2011 the USFDA introduced FSMA to implement a more proactive food safety regulatory system. With FSMA came the Foreign Supplier Verification Program (FSVP), which basically extends FSMA regulations to companies supplying food to the United States. All U.S. importers are now required to monitor and manage their foreign suppliers through six steps of hazard analysis, record keeping and more. Given the complexity of the global food supply chain, this is by no means an easy undertaking and it is clear that technology is crucial to achieving this granular level of data management alone. Blockchain technology, however, might be the answer to this problem—and many other related ones.
What is Blockchain Technology?
Evolving from the digital financial world, blockchains are distributed databases that build a growing chain of ordered records, called blocks. This means that any type of information can be stored in a chronological, consistent and secure way; even if multiple users are involved, it is extremely difficult to alter a blockchain.
Since any information on the blockchain is shared with all of its users, they can view any transactions made historically and in real-time. Theoretically, this could allow authorities to pinpoint food problems within minutes, when previously it would take days, potentially saving many lives in the process.
Blockchain in Action in the Food Industry
In 2016, retail giant Walmart started using a pilot version of the technology in its stores, tracking two products using blockchain: A packaged produce item in the United States and pork in China. Walmart announced that the results were “very encouraging,” noting that using blockchain technology could dramatically increase the speed of traceability from days to minutes. In fact, Walmart is now taking it to the next level with a collaboration with one of China’s largest retailers, JD.com, and their suppliers, to bring a higher level of food safety to China.
Other major food suppliers and retailers—Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods and Unilever—have also signalled their intention to work with IBM to create blockchain-based solutions. Blockchain technology is even being used to track the movement of tuna through the ocean and all the way to the consumer.
At the same time, implementing blockchain technology throughout the industry is a mammoth task. As of now, blockchain technology has a problem with scaling up and can only process a limited number of transactions per second, which would not be sufficient given the needs of the global supply chain. According to Coindesk, each transaction costs about $0.20, and can only store 80 bytes of data, so the bill might become quite hefty as well.
There’s also the fact that the food industry is traditionally slow to adopt new technologies. It’s not just about big players like Walmart—small, medium, and large businesses alike need to come onboard in order for this to become an industry-wide standard.
Can FSVP Unlock the Potential for Blockchain Technology?
There are several reasons why blockchain technology could be the key to tackling the complex challenge that is tracking and verifying foreign suppliers. Blockchains can help increase transparency and communication across the food supply chain, ensuring that there are no gaps and that records are widely available and up to date. When all the information about suppliers and products is easily accessible, the potential to increase the speed of recall response is very high.
Blockchain technology is also suited to FSVP’s goals, specifically. One of the main goals of FSVP and FSMA generally is to tackle the issues of food fraud, intentional adulteration and bioterrorism that are unique problems of our time, in terms of scale if nothing else. Such a modern problem requires modern solutions. Because the blockchain, forming the basis of cryptocurrencies like Bitcoin, focuses on security, it could mean that blockchains can help close the gaps that would be exploited by food companies employees, or other actors who harbor ill intent.
The reality, however, is that the level of industry-wide coordination—and voluntary transparency—that would be necessary to deliver real benefits is extremely high. The theoretical possibilities are exciting and hugely impactful; the practical reality is more complex. For blockchain to reach its full potential, it has to be universally mandated, which is highly unlikely given the current circumstances. It seems more likely that adoption in this area could be driven by industry organizations and/or government, but unfortunately, the recently proposed budget cuts for the FDA might block progress in the latter area.
Still, with major food suppliers and retailers leading the charge and taking blockchain technology for a test run, the rest of the industry is waiting with bated breath to see what happens next.
It’s not that the industry has been more reluctant than others to embrace change; rather, the forces that will drive the food’s big data revolution have but recently come to bear.
Regulation is now playing a role. FSMA mandates that the industry embrace proactive food safety measures. That means higher testing volumes. Higher testing volumes means more data.
At the same time, new technologies like next-generation sequencing (NGS) are beginning to find wide-scale adoption in food-safety testing. And NGS technologies generate a lot of data—so much so that the food safety lab will soon emerge as the epicenter of the food industry’s big data revolution. As a result, the microbiology lab, a cost center, will soon emerge as one the industry’s most surprising profit centers.
A Familiar Trend
This shift may be unprecedented in food, but plenty of other industries touched by a technological transformation have undergone a similar change, flipping the switch from overhead to revenue generation.
Take the IT department, for instance. The debate about IT departments being a cost or profit center has been ongoing for many years. If data centers had simply kept doing what they have done in the past—data processing, enterprise resource planning, desktop applications, help desk—maintaining an IT department would have remained a cost center.
But things look quite different today. Companies in today’s fast-changing business environment depend on their IT departments to generate value. Now and for the foreseeable future, the IT department is on the hook to provide companies with a strategic advantage and to create new revenue opportunities.
Netflix, for example, recently estimated the value of their recommenders and personalization engines at $1 billion per year by quadrupling their effective catalog and dramatically increasing customer engagement and reducing churn.
Another great example are the call centers of customer support departments. For most of their history, call centers generated incredibly small margins or were outright cost centers.
Now, call centers armed with AI and chatbots are a source of valuable customer insights and are a treasure trove of many brands’ most valuable data. This data can be used to fuel upsells, inform future product development, enhance brand loyalty, and increase market share.
Take Amtrak as a prime example. When the commuter railway implemented natural language chatbots on their booking site, they generated 30% more revenue per booking, saved $1 million in customer service email costs, and experienced an 8X return on investment.
These types of returns are not out of reach for the food industry.
The Food Data Revolution Starts in the Lab
The microbiology lab will be the gravitational center of big data in the food industry. Millions of food samples flow in and out of these labs every hour and more and more samples are being tested each year. In 2016 the global food microbiology market totaled 1.14 billion tests—up 15% from 2013.1
I’d argue that the food-testing lab is the biggest data generator in the entire supply chain. These labs are not only collecting molecular data about raw and processed foods but also important inventory management information like lot numbers, brand names and supplier information, to name a few.
As technologies like NGS come online, the data these labs collect will increase exponentially.
NGS platforms have dramatically reduced turnaround times and achieve higher levels of accuracy and specificity than other sequencing platforms. Unlike most PCR and ELISA-based testing techniques, which can only generate binary answers, NGS platforms generate millions of data points with each run. Two hundred or more samples can be processed simultaneously at up to 25 million reads per sample.
With a single test, labs are able to gather information about a sample’s authenticity (is the food what the label says it is?); provenance (is the food from where it is supposed to be from?); adulterants (are there ingredients that aren’t supposed to be there?); and pathogen risk.
The food industry is well aware that food safety testing programs are already a worthwhile investment. Given the enormous human and financial costs of food recalls, a robust food-safety testing system is the best insurance policy any food brand can buy.
The brands that understand how to leverage the data that microbiology labs produce in ever larger quantities will be in a position to transform the cost of this insurance policy into new revenue streams.
Digitizing the Food Supply Chain
It’s clear that the food lab will generate massive amounts of data in the future, and it’s easy to see that this data will have value, but how, exactly, can food brands turn their data into revenue streams?
The real magic starts to happen when we can combine and correlate the trillions of data points we’re gathering from new forms of testing like NGS, with data already being collected, whether for inventory management, supply chain management, storage and environmental conditions, downstream sales data, or other forms of testing for additives and contaminant like pH, antibiotics, heavy metals and color additives.
When a food brand has all of this data at their fingertips, they can start to feed the data through an artificial intelligence platform that can find patterns and trends in the data. The possibilities are endless, but some insights you could imagine are:
- When I procure raw ingredient A from supplier B and distributors X, Y, and Z, I consistently record higher-than-average rates of contamination.
- Over the course of a fiscal year Supplier A’s product, while a higher cost per pound, actually increases my margin because, on average, it confers a greater nutritional value than the supplier B’s product.
- A rare pathogen strain is emerging from suppliers who used the same manufacturing plant in Arizona.
Based on this information about suppliers, food brands can optimize their supplier relationships, decrease the risk associated with new suppliers, and prevent potential outbreaks from rare or emerging pathogen threats.
But clearly the real promise for revenue generation is in leveraging food data to inform R&D, and creating a tighter food safety testing and product development feedback loop.
The opportunity to develop new products based on insights generated in the microbiology lab are profound. This is where the upside lives.
For instance, brands could correlate shelf life with a particular ingredient or additive to find new ways of storing food longer. We can leverage data collected across a product line or multiple product lines to create new ingredient profiles that find substitutes for or eliminate unhealthy additives like corn syrup.
One of the areas I’m most excited about is personalized nutrition. With microbiome data collected during routine testing, we could develop probiotics and prebiotics that promote healthy gut flora, and eventually are even tailored to the unique genetic profile of individual shoppers. The holistic wellness crowd has always claimed that food is medicine; with predictive bioinformatic models and precise microbiome profiles, we can back up that claim scientifically for the first time.
Insights at Scale
Right now, much of the insight to be gained from unused food safety testing data requires the expertise of highly specialized bioinformaticians. We haven’t yet standardized bioinformatic algorithms and pipelines—that work is foundational to building the food genomics platforms of the future.
In the near future these food genomics platforms will leverage artificial intelligence and machine learning to automate bioinformatic workflows, dramatically increasing our ability to analyze enormous bodies of data and identify macro-level trends. Imagine the insights we could gain when we combine trillions of genomic data points from each phase in the food safety testing process—from routine pathogen testing to environmental monitoring to strain typing.
We’re not there yet, but the technology is not far off. And while the path to adoption will surely have its fair share of twists and turns, it’s clear that the business functions of food safety testing labs and R&D departments will grow to be more closely integrated than ever before.
In this respect the success of any food safety program will depend—as it always has—not just on the technology deployed in labs, but on how food brands operate. In the food industry, where low margins are the norm, brands have long depended on efficiently managed operations and superb leadership to remain competitive. I’m confident that given the quality and depth of its human resources, the food industry will be prove more successful than most in harnessing the power of big data in ways that truly benefit consumers.
The big data revolution in food will begin in the microbiology lab, but it will have its most profound impact at the kitchen table.
- Ferguson, B. (February/March 2017). “A Look at the Microbiology Testing Market.” Food Safety Magazine. Retrieved from https://www.foodsafetymagazine.com/magazine-archive1/februarymarch-2017/a-look-at-the-microbiology-testing-market/.
Do you trust your suppliers? What about your supplier’s suppliers? Strengthening the links within your supply chain can be a challenging task, but it is necessary with FDA, and FSMA, recognizing the risk that exists.
Key topics, including vulnerabilities, inspections & audits, traceability, supplier verification, transportation, and recalls will be addressed at the 4th Food Safety Supply Chain conference from June 12–13 in Rockville, MD. The event will be held at the U.S. Pharmacopeial Convention.
This year’s agenda will be posted by March 1. In the meantime, the following are some topics covered at last year’s event:
Today the FDA issued five guidance documents related to FSMA with the goal of assisting food importers and producers meet provisions in the regulation.
The first two documents are related to the Foreign Supplier Verification Program (FSVP) regulation. The FDA issued the draft guidance, Foreign Supplier Verification Programs for Importers of Food for Humans and Animals, along with a small entity compliance guide. The third draft guidance is related to whether a measure provides the same level of public health protection as the corresponding requirement in 21 CFR part 112 or the PC requirements in part 117 or 507 . “This draft guidance aims to provide a framework for determining the adequacy of a process, procedure, or other action intended to provide the same level of protection as those required under the FSMA regulations for produce and for human or animal food,” according to FDA.
The FDA also released a final chapter in the draft guidance related to FSMA requirements for hazard analysis and risk-based PCs for human food. The chapter is intended to assist food facilities in complying with the supply chain program requirements.
The fifth guidance is an announcement of the FDA’s policy to exercise enforcement discretion related to the FSVP rule regarding certain grain importers that bring the product into the United States as raw agricultural commodities. “This enforcement discretion is meant to better align the FSVP rule with the exemption for non-produce RACs under the PC rules,” stated FDA.
Cryptocurrency is a favorite topic in the business world currently, but it’s not the coins or currency that are the star of the show. Bitcoin in and of itself is exciting and promising from several perspectives. However, the foundation of what these technologies run on is much more important. You likely already know what we’re going to talk about next: Blockchain.
To understand why blockchain is considered so crucial, you first need to delve into the core components of the technology. It’s basically a digital ledger, except it has some incredibly useful properties that make it uniquely lucrative. For starters, it’s public and transparent, so anyone with access to the network can see what’s happening in the moment, or what has been happening while they were away. However, the parties involved in a transaction or entry remain private, as do the materials or items exchanging hands.
Finally, because of the nature of blockchain, it’s secured and valid. The ledger itself is thoroughly protected, and no one can alter data save the parties involved. Even then, the relevant parties only weigh in with pertinent information such as time and date of the transaction and the amount transferred.
Most of what we’re talking about here is in reference to currencies and more traditional transactions. But it’s important to remember that we’re merely scratching the surface. As we speak, various organizations are working to adapt this technology for alternate industries and applications.
Still, what does any of this have to do with your average food supply chain?
Blockchain May Evolve the Food Supply Chain As We Know It
Believe it or not, blockchain can help improve the transparency and management of the food supply chain. It’s definitely needed. The world’s population continues to grow, and it’s expected to reach 10 billion by 2050. In food requirements, that means we’ll need to be increasing food production by as much as 70% to keep up. This puts a demand on the food supply chain to evolve and become more efficient, more accurate and more reliable.
The following are several ways blockchain can help achieve better transparency in and management of the food supply chain.
Preventing Foodborne Outbreaks, Enabling Fresher Goods
IBM has teamed up with several major suppliers including Wal-Mart, Dole and Nestle to come up with a blockchain-powered system that can be used to track a product’s journey from farm to store shelves. The goal is to create a more transparent deployment and transportation process so that interested parties can see exactly when and where certain foods might become contaminated.
Tracking this information will achieve a couple of things. For starters, public health officials, suppliers and management teams can help limit and prevent contagions from spreading. After the detection of Salmonella, for instance, they could mark all related goods as a risk and stop both stores from selling them and consumers from buying faster than ever before.
Second, it will help identify problematic systems and processes, hopefully cutting down on the risk of contamination in the future. If they know certain foods are going bad in transport, they can discern that it’s something to do with how they’re handled or stored along that segment of the journey. This would further enable them to identify and fix or optimize the issue. In other words, suppliers and retailers will use blockchain to keep food fresh. This is especially important since FSMA calls for reliable hygiene and storage methods during transportation.
More Accurate Inventory Tracking for Distributors
Unexpected shortages pose significant challenges to the food supply chain. A variety of external factors can contribute to a supply block, including inclement weather, poor soil, insect infestations, equipment failures and much more. When this happens, distributors are left to pick up the slack, but sadly, they often can’t do much to fix the problem.
Blockchain technologies, however, make the supply chain more transparent, which helps distributors get the information they need to address shortages. Through the use of blockchain, they’ll know exactly how much supply is available and what they need to do to ramp up their offerings.
For example, in the event of a shortage, they might connect with local farmers to make up the difference. Gathering the information needed to find the right partner, however, can take a long time when using traditional methods. Through blockchain, though, distributors could easily see product types, farming practices, harvest dates and amounts, treatment info, fair-trade certifications and other information. This would allow them ample time to find a suitable replacement or additional partner.
Transparent Safety Protocols
The food supply chain is lengthy, includes a lot of different parties and involves a lot of metrics and details that need to be recorded and monitored. The problem with having so many factors is that it can muddy the waters. It’s hard to keep track of what every party is doing, where problems exist and what improvements can be made.
Many modern food supply providers are as transparent as they can be with partners and colleagues, but it’s not an element you would describe as streamlined or accessible to all. Blockchain can completely alter and disrupt this for the better.
Since food safety is an enormous concern for suppliers, distributors and retailers, blockchain can offer more than just peace of mind. It can help organizations perfect the entire process, improving safety for consumers and even enhancing the freshness or quality of the products provided. Improper storage or transport, for instance, can have a detrimental effect on quality, before the goods even reach store shelves. Blockchain will enable better tracking and monitoring, and make the resulting details much more accessible and transparent.
It’s Time for the Food Supply Chain to Evolve
The coming change is warranted and welcomed by many. A more transparent process means a much more accessible system. Suppliers can better communicate with farmers and food sources. Distributors and retailers can keep a close eye on the goods they’re acquiring and offering to consumers. Furthermore, safety, quality and quantity can be more accurately monitored and measured by everyone along the way. It’s time for the food supply chain to evolve in this way — it’s been a long time coming.
As we look to 2018, the need for food defense activity remains. Increased adulteration incidents in 2017, consumer purchasing trends and FSMA rules implementation drive this need and the work necessary to complete it in 2018.
Intentional Adulteration of Food. It was evident that intentional adulteration of food did not diminish over the past year and likely increased. Adulteration cases of spices with undeclared ingredients to extend the product or boost color were documented. Terrorists plans and food adulteration tests were uncovered and publicized. In Germany, a man threatened to put antifreeze in the nation’s baby formula supply chain. And disgruntled employees continued to adulterate food to get revenge on their employer or co-workers. Given the complexity of our food system and the limited transparency of supply chains from farm to fork, those willing and able to adulterate will continue to do so in 2018.
Consumer Demands. Look in your local grocery aisles and you will find an ever-increasing section of “freedom foods”. These are foods that claim to be free of something whether it be gluten, lactose, pesticides or GMOs. With increasing frequency consumers are also asking questions about the sustainability and agriculture practices of the food they buy. How have the oceans been fished? Are my eggs from cage-free chickens? Does the food I buy protect the environment. Based on current trends, consumers will continue to spend their food dollars on organic, free-of, and sustainability produced food. This means food defense needs to have a keen eye on where fraudsters could adulterate products representing these food trends.
Company Food Defense. Two things have increased in the requests we are getting from companies: New incidents and the nearing deadline for compliance of the FSMA Intentional Adulteration (IA) rule. First, adulteration incidents that affect your product or the ingredients you use changes the lens you see food defense through. Even an adulteration in an ingredient or product similar to yours makes you look twice at how protected you are. With the continued incidents, companies are taking a hard look at how they are affected. Second, food companies have completed their work to prepare for the early FSMA rules such as Preventive Controls and Foreign Supplier Verification moving their attention to the next rules. The IA rule compliance dates begin in July 2019, and we anticipate increased activities, questions and food defense efforts in 2018.
As you can see, there is a nexus of need to accomplish defense work in our food system. Perhaps 2018 will be “the” year of food defense where individually and collectively we close vulnerability gaps.
Sadly, more and more these days, terrorism has become a prevalent concern. The food sector is not immune to threats either, especially as soft targets and lone wolf attacks become more common.
Food Safety Tech discussed the issue with special agent Scott Mahloch, weapons of mass destruction coordinator for FBI Chicago, during a conversation leading up to this year’s Food Safety Consortium, where Mahloch will be speaking.
Food Safety Tech: In the past year, have there been any changes or new developments in the way in which the FBI conducts outreach to the food industry?
Scott Mahloch presented FBI’s Role in Food Defense on November 29 at the 2017 Food Safety Consortium | Learn moreScott Mahloch: The U.S. food system continues to be a soft target, largely unprotected from the insider threat. Since last year’s Food Safety Consortium we have done targeted outreach to the top dozen food processing facilities in the Chicago area. We worked with our intelligence team, came up with a list of questions and spoke with food safety managers and facility managers regarding the insider threat and educated them on the WMD [FBI’s Weapons of Mass Destruction] program.
FST: Do other divisions of the FBI work in a similar manner as the Chicago division?
Mahloch: It really depends on the office. We have 56 field offices around the nation. In every office we have a WMD coordinator, so it depends on his or her area of responsibility and what that area commands. For example, our office in Springfield [Illinois] is more agriculturally based than we are here in Chicago. Their food outreach would be very similar, but they might be looking at the farms and the agricultural aspect of food production.
FST: Are there any imminent threats to the food sector? Have you seen anything new over the past year?
Mahloch: No, we have not [seen] anything here in the homeland. The bad guys overseas have always expressed interest in attacking food and water, and that remains the same. It’s more the international terrorist groups that have always stressed this in the past. That’s one of the drivers of why we’re so involved in this outreach—we never want that to happen here in the United States. To get in front of the threat, we go out and talk to subject matter experts in this area, the facility managers and food safety managers to get the information out there.
FST: As FBI takes a proactive approach to food defense, what responses have you seen with food companies thus far?
Mahloch: It’s been very positive. People out there believe in our mission and in what we’re doing, and they want to ensure safety and security in their facilities. Communication has been great; they’ve welcomed us into their facility, taken us on facility tours, shown us production lines and answered our questions. It’s been a great relationship.
FST: Does the FBI concern itself with global food supply chain security in terms of how it affects the United States?
Mahloch: Yes, absolutely. What I do is more on a local level here in Chicago, and the same goes for my fellow coordinators in the field offices. We focus on our area of responsibility. The WMD director has a unit that deals with food and water safety. We also have an overseas lead attaché program that works—those folks are also involved in WMD.
FST: What can attendees look forward to hearing about during your presentation at this year’s Food Safety Consortium?
Mahloch: A lot of it will be education and just getting the word out there that the FBI has a role in food safety, food protection and water safety. A lot of people don’t realize the FBI is involved in this. Usually when you think food protection, you think the USDA, FDA, Homeland Security and other agencies that have programs. So a lot of it will be education and telling [attendees] what we do, what we’re about, and where they can turn in a time of need for additional resources. That’s probably the biggest takeaway from the FBI.
[In addition], on outreach and how the FBI is perceived, what we’ve noticed is that we’ve gone into facilities and their defenses are up a bit because they think the FBI is going to regulate, take a look at their processes and inspect. That’s really not what we’re about. We’re not a regulator—we don’t go in and try to change internal processes or rip apart what they’re doing. What we do is strictly education. There are other regulatory bodies that mandate how things are supposed to be shipped, stored and processed. That’s not the FBI. Sometimes there’s that misconception when we go in and want to do some outreach—that FBI is there to regulate. That’s not the truth. We’re a resource and we’re trying to open those doors of communication.
And as far as the threat in the homeland, right now there is none and we continue to try to stay ahead of the threat through education and being a resource.
What if it was possible for importers, or the customs broker that imports food into the U.S. on behalf of shippers, to stop salmonella-tainted food before it arrives in the hands of a consumer? While there are assorted systems in place to prevent contamination, often times, grocery stores and other businesses are unable to track the supply chain of foreign food importers, leaving customers blind to the origin of a product.
The U.S. Food & Drug Administration (FDA) is working to address this issue with the Foreign Supplier Verification Program (FSVP). The new program makes importers responsible for better tracking hazards, identifying their suppliers and ensuring that their food is compliant with processes that meet the FDA’s standards for preventive controls and safety.
On the surface, this visibility seems like a great benefit to both consumers and businesses. But what will it mean for importers as they try and keep up with reporting requests and new regulations?
To prepare businesses for the continuing list of FSVP regulations that must be implemented by 2019, here are four ways in which technology will ease the burden and make the food industry’s supply chain even stronger.
1. Gain a holistic view of the supply chain
For navigating FSVP specifically, technology provides food importers with an efficient way to identify and better trace a supplier network, as well as and a quick and easy way to locate D&B D-U-N-S® Numbers*. For importer self-filers and customs brokers, similar solutions enable them to streamline techniques to transmit data to U.S. Customs & Border Protection (CBP) in the Automated Commercial Environment (ACE) as their goods move across borders, as well as to store details, such as D&B D-U-N-S Numbers, Harmonized System (HS) codes and more.
Ultimately, food importers and customs brokers that enlist the expertise of one technology provider can better prepare for FSVP compliance. While piecing together a technology solution using multiple logistics technology providers may work in the short term, a forward-looking, compliance-centric approach that aligns with future regulations must be adopted – one that gives a holistic view of the supply chain via one service provider.
2. Identify and better trace the supplier network
Supplier verification is an additional area of FSVP whereby suppliers must undergo periodic review and approval, and must be identified in order to perform an effective supplier hazard analysis and evaluation. Accurately identifying suppliers is a highly complex task due to intricate supply chains, compound food formulations and the number of SKUs in a product line. Plus, a supplier ecosystem evolves over time for many reasons, such as changing cost and consumer demand. Simply put, managing a complex supplier network can be a drain on resources and costly. Luckily, technology can help.
Logistics solutions that feature periodic updates that adapt to changing supply chains can help food importers better target suppliers to ensure regulations are followed. It can also help focus on suppliers with higher shipment volumes to optimize data management and prioritize compliance responsibilities.
In the event a food code is subject to FSVP, customs brokers are required to input the importers’ name, mailing address, email address and D-U-N-S Number. Because the FDA’s consumer protection function is dependent on the entry process, brokers are aware of the added scrutiny shipments subjected to FSVP-related information will be under, especially if any of the above information is noted as Unknown (UKN). Logistics technology can help automate this process and ease custom entries, booking, security filings and more.
3. Streamline techniques to transmit important data
Transmitting data to the CBP as goods move across borders can be challenging in its own right. Basic customs issues include import/entry process, tariff classification, valuation and duty assessment.
Innovative technology solutions can help businesses go beyond the bare minimum to improve the speed and accuracy of submitting entry and Partner Government Agency (PGA) data to CBP. Users can receive and react to responses and customs status messages by exception. Proactive alert functionality can notify users of actionable items including rejections, intensive exams, requests for electronic invoices, Temporary Importation Bonds (TIB) expiration notices and more. On-demand solutions also enable brokers and forwarders the ability to run complex international operations more efficiently.
4. Dedicate D&B D-U-N-S numbers for imported food product
The D&B D-U-N-S Number was selected by the FDA as the recording system to identify importers by a common reference system. The FSVP regulation indicates that a D-U-N-S Number must be provided by an importer for each line entry of food product imported into the U.S.
Today’s complex food industry means importers often work with an extensive ecosystem of subsidiaries, affiliates and Doing Business As (DBA) divisions. To comply with FSVP, technology can help quickly locate the D&B unique identifier for each member of the network, and streamline the complicated process of managing each line entry of food product offered for importation into the U.S.
A tech-driven pathway forward
There is no doubt that the new FSVP regulation is complex. U.S. food importers are now responsible for ensuring compliance in an effort to improve the safety of food entering the U.S. This will require food importers to fully understand the regulation on a practical level and react accordingly, using technology to its fullest.
Leading businesses should consider the FSVP regulation as an opportunity to look forward and prepare. With the right logistics technology and processes in place, organizations can improve their readiness to enable compliance, improve data management and execute a holistic regulatory strategy to meet the new stringent requirements.
* D&B D-U-N-S Numbers are proprietary to D&B, are licensed from D&B and are for internal use only. D-U-N-S is a registered trademark of D&B.
There was a time not long ago when most of the food Americans ate came from close to home. Consumers primarily ate what was in season and there were less processed and manufactured foods in general. That has all changed. Our world is more accessible, people are traveling more frequently, and as they do, they are also expanding their palates. Consumers can have Thai food for lunch, Ecuadorian for dinner, and enjoy fresh produce year round regardless of the growing season near home. Similar changes in diet and consumption patterns can be observed across the world. This global “shrinking” (globalization) demands longer and more complex food supply chains to move product and provide ingredients.
Attend the Food Safety Supply Chain Conference | June 12–13, 2018 | Rockville, MD | Learn moreTo support changes in consumer demands, food supply chains that support movement of ingredients and products from farm to fork are becoming increasingly global, dynamic and complex. These supply chains are comprised of complicated networks of farms, production or processing facilities, and storage and distribution channels with product moving via road, rail, ship and air across the globe. These supply chains provide the global food and agriculture sector with efficient access to suppliers and consumers around the world. Unfortunately, however, food supply chains are vulnerable to disruptions such as natural disasters, transportation hazards, cyber attacks, product contamination, theft and unexpected shutdowns of key supply chain nodes. Any of these disruptions could lead to significant public health and economic consequences.
Many supply chain risks and vulnerabilities are directly related to the way a supply chain is constructed. First, there are often several degrees of separation between the point of production and the source of raw ingredients with limited visibility of the pathways in between. Spices are an illustrative example of this supply chain challenge. Spice supply chains are notoriously long with product moving through a complex web of farmers, brokers, processors, wholesalers and exporters. By the time a spice reaches a manufacturer for use in a processed food product, the manufacturer may have adequate visibility and information only about the supplier from whom the spice was most immediately purchased. The manufacturer may not have good visibility of supply chain components further upstream. Depending on the nature of the manufacturer’s customers and distribution channels, the same manufacturer may also have limited visibility of downstream supply chain components. This limited visibility up and downstream could be true for every step of the chain. Without end-to-end supply chain visibility, stakeholders cannot adequately assess risks related to supplier quality and reliability. Tracing product forward and backwards becomes a very difficult task. In the event of a supply chain disruption or contamination event, limited supply chain visibility not only impedes mitigation and response efforts, but also exacerbates the event.
Second, supply chains are often constructed in such a way that certain components of the supply chain are more critical than others. For example, a supply chain may rely upon a single manufacturing plant through which all ingredients and all finished product are routed; a shutdown or failure at that point in the supply chain would greatly impact normal operations. Likewise, a supply chain may rely exclusively on a particular transportation route; a disruption to that route from a disaster could significantly delay delivery of product to consumers. A supply chain may also source the majority of a raw ingredient from a single supplier; a disruption to that supplier could force a producer to scramble to identify and vet alternative suppliers.
Forward-thinking approaches are needed to address supply chain challenges related to supply chain complexity and poor visibility. While some supply chain risks cannot be avoided entirely, understanding supply chain structure and proactively identifying supply chain hazards based on the structure of the supply chain will ultimately improve supply chain resilience. For example, end-to-end, geo-spatial mapping of the supply chain of a particular product line would allow stakeholders to identify risks such as exclusive reliance upon a single supply chain node. However, such an approach is not easy. End-to-end geo-spatial mapping of a supply chain requires data and information from multiple stakeholders. Sharing information across organizations is both culturally and logistically difficult.
To address these challenges, the Food Protection and Defense Institute (FPDI) has developed technology that allows private food companies and the government to document, visualize and compare supply chains in support of risk and criticality assessments, mitigation efforts and event response. With support from the Department of Homeland Security, FPDI developed CRISTAL or Criticality Spatial Analysis. CRISTAL is a geo-spatial web application that allows organizations to document supply chains from end-to-end, including supply chain components owned by other entities such as suppliers or distributors. Additionally, CRISTAL allows users to visualize the geo-spatial structure of a supply chain alongside hazard layer data, including cargo theft and natural disaster hazards. By increasing supply chain visibility, CRISTAL ultimately facilitates supply chain documentation, product tracing, and event response. Finally, CRISTAL supports efforts to identify where mitigation resources are most needed during potentially catastrophic supply-chain failures.