Tag Archives: Supply Chain

Cecile Camerlynck, Transparency One

Why We Buy: The New Era of Transparency

By Cécile Camerlynck
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Cecile Camerlynck, Transparency One

Supply chains are getting increasingly more complex. Add to this the fact that consumers want more and more information about the products they buy. How can we obtain and store the information we want (and need), when we interact with hundreds of suppliers? Transparency in your supply chain is no longer a “nice to have”, but has become a must-have.

Product, price and quality used to be enough. Brands created products with good, better and best strategies targeting specific customer segments based on price and quality differences. Classifying customers and products allowed for more targeted offers—and a closer connection to the consumer.

And then Apple and Amazon reinvented the shopping experience. Digital and mobile took off. The customer experience became a point of differentiation in the store, online and on devices. As a result, the customer experience and omni-channel retailing have been core values for the past decade.

Today, a new value is emerging: Transparency. It is no longer enough to have a high-quality product, at a good price and with a rewarding shopping experience. The rise in health-conscious consumers, a highly interconnected society (transparency in the digital era), and a greater frequency of recalls and social responsibility issues has increased consumer demand for transparency. They want to know where and how products are made, what they are made of, and who made them.

Unsurprisingly, shoppers are very concerned by news about food safety issues such a Listeria and food fraud, which have become increasingly well publicized. Experience shows that these events have a significant impact on consumer confidence in brands and in certain types of products, which can take a long time to overcome.

According to a report released this year by World Vision Canada, consumers want to make ethical buying decisions.1 However, they are kept in the dark and don’t have enough information about products to do so. The organization is pushing for a new law, such as those already passed in the United States and the UK, to ensure that factories in foreign countries supplying the Canadian market don’t use minors to make products.

Every brand will need to determine the right level of transparency for their company and customers (consumer trust drivers like country of origin, label accuracy, etc.). Only 1% of consumers will want to know everything. For the other 99%, what they really want to know is that the brand they are buying from has a safe and responsible supply chain. They want to trust the brand promise. However, many brands still only know their immediate suppliers—and to ensure this trust, they need to dig deeper.

Providing transparency in your entire supply chain will reduce what we call the “visibility barrier” and give you access to all the information that you need and that your customer wants. Rather than simply reacting when a crisis emerges, you will proactively know your entire supply chain identity.

In 2016, technology and business practices exist to truly create brand trust by ensuring a safe and responsible supply chain. Yes, supply chains are complex and global. Yes, they represent thousands of companies, some of whom may not want to share information. But if more than a billion people can connect on Facebook, when it comes to knowing the supply chain, it’s simply not enough to say “I don’t know.”

Reference

  1. Press, J. (June 9, 2016). “New report on child labour raises call for supply chain transparency law”, Times Colonist, Accessed August 12, 2016. Retrieved from: http://www.timescolonist.com/new-report-on-child-labour-raises-call-for-supply-chain-transparency-law-1.2274235
Maria Fontanazza, Food Safety Tech and Christina Romas, Repositrak

Does the C-Suite Understand FSMA? Not Completely

By Food Safety Tech Staff
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Maria Fontanazza, Food Safety Tech and Christina Romas, Repositrak

One year ago, the industry was speculating about the details of the final FSMA rules, but was very much taking a “wait-and-see” approach. With all seven rules finalized, companies are now preparing for compliance. Beyond taking the steps to ensure that companies understand their responsibilities pertaining to each rule, there has been continual concern over a lack of C-suite awareness—both related to FSMA and knowing what is really happening at the ground level. “I think there’s been a culture shift with food safety professionals having more visibility to the leadership team and to the C-suite,” said Christina Romas, senior vice president at Repositrak, during a recent interview with Food Safety Tech.

When asked whether she thought the C-suite adequately understands FSMA, Romas succinctly replied, “no”. Watch the rest of the video to hear what Romas had to say about FSMA compliance challenges and which rule is getting the most attention from industry thus far.

 

Randy Fields, Repositrak
FST Soapbox

Insurance and Food Safety: A Primer for the C-Suite

By Randy Fields
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Randy Fields, Repositrak

Food safety risk is now a greater concern for retailers and manufacturers than ever before due to the combination of FSMA and increased consumer concerns. Supply chains are more complex, product recalls and foodborne illness outbreaks occur more frequently, and the new normal is prevention rather than inspection. Wrap that all up with advanced technology and the 24-hour news cycle, and consumers are acutely becoming aware of food safety issues as soon as they occur.

What this means for all of the participants in the global food supply chain is that you should review your insurance policies and look for gaps in coverage where you may be exposed. While no two recalls are the same, and foodborne illness outbreaks impact affected companies in different ways, certain trends have emerged to help better understand the claim friction points that frustrate companies after a food safety event.

Two of the most important tools to mitigate food safety risk are contaminated product insurance (CPI) and product recall insurance (PRI). Inventory, cost of refunds and recall expenses are three of the largest recall loss items suffered by companies. Combined, they are the largest percentage of loss (nearly 50%) and represent a substantial portion of uncovered loss for any insured under CPI/PRI. The sole basis for this frustrating friction point is simple—lack of traceability.

CPI/PRI only covers losses that result directly from a covered insured event. If a company is unable to support its claim that costs are directly related to the event and the resulting recall or outbreak, it will not be reimbursed under a CPI/PRI policy. And, as such, loss amounts are generally not covered under general liability and property policies either, so a significant portion of a company’s loss remains uncovered.

Here’s a recent claim example to illustrate the impact on a company that lacked the capability to properly trace its products. An insured purchased a CPI policy with a $2 million Accidental Contamination limit. An event occurred involving a contaminated food product, which triggered that coverage. During the review, the insured provided spreadsheets supporting nearly $1.1 million in customer credits for product shipped and either returned by the customer for disposal or destroyed by the customer. Unfortunately, based on a review of the information provided in support of the spreadsheets, the accountants found that the insured was unable to properly trace and support its claim that the returned or destroyed product was affected by the insured event recall. Under these circumstances, the accountants were only able to confirm $187,000 in losses. The result: The company was unable to recover nearly $1 million in potentially covered losses because it lacked traceability. These outcomes are not uncommon.

The insurance industry understands food safety risks and the need to evolve products to meet the needs of food industry clients. Companies can’t totally mitigate all food safety issues, but understanding the risks is the best way for a business to protect itself. Insurance industry leaders are working in partnership with their food sector clients to ensure that risks are better understood and that the client has appropriate systems in place to help mitigate them.

Insurance companies are tailoring their products to ensure that policies are developed to address the recall risks caused by regulatory changes and help companies ensure compliance as well as an understanding of the regulatory requirements. However, food companies may increasingly find coverage and limits adjusted lower for government recalls in high-risk environments. Insurers are also a key player in the promotion of food safety standards, and some offer favorable rates to food industry clients who are graded top tier for safety.

Some insurers go a step further, allowing clients to allocate a portion of their premium for pre-incident risk-analysis and crisis-response services. Top insurers provide clients access to a network of crisis management specialists as part of their food safety coverage. They should offer risk management guidance in areas such as food safety risk, regulatory compliance, supply chain management and product security.

One of the most critical risk mitigation tactics is developing long-term relationships with trusted, but verified, suppliers, distributors and other key partners. It is also important for companies to undertake regular site visits to their manufacturers or suppliers, and commission third-party audits to maintain reliability and transparency.

Not if, but when a product recall occurs, a company faces a myriad of risks. As with food safety, preventive planning can pay off significantly. By proactively working with insurers, trading partners and technology vendors you can reduce if not eliminate the negative impact of the event.

Steven Guterman, InstantLabs
In the Food Lab

Save Seafood with Digital Tracking

By Steven Guterman, Sarah McMullin, Steve Phelan
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Steven Guterman, InstantLabs

The combination of improved digital tracking along the food supply chain, as well as fast, accurate DNA testing will provide modern, state-of-the-art tools essential to guarantee accurate labeling for the ever-increasing quantities of foods and ingredients shipped globally.

The sheer scale of the international food supply chain creates opportunities for unscrupulous parties to substitute cheaper products with false labels. We know fraud is obviously a part of the problem. Some suppliers and distributors engage in economically motivated substitution. That is certain.

It’s equally true, however, that some seafood misidentification is inadvertent. In fact, some species identification challenges are inevitable, particularly at the end of the chain after processing. We believe most providers want to act in an ethical manner.

Virtually all seafood fraud involves the falsification or manipulation of documents created to guarantee that the label on the outside of the box matches the seafood on the inside. Unfortunately, the documents are too often vague, misleading or deliberately fraudulent.

Oceana, an international non-profit focused solely on protecting oceans and ocean resources, has published extensively on seafood fraud and continues to educate the public and government through science-based campaigns.

Seafood fraud is not just an economic issue. If the product source is unknown, it is possible to introduce harmful contamination into the food supply. By deploying two actions simultaneously, we can help address this problem and reduce mistakes and mishandling:

  • Improved digital tracking technologies deployed along the supply chain
  • Faster, DNA-based in-house testing to generate results in hours

Strategic collaborations can help industry respond to broad challenges such as seafood fraud. We partner with the University of Guelph to develop DNA-based tests for quick and accurate species identification. The accuracy and portability produced by this partnership allow companies to deploy tests conveniently at many points in the supply chain and get accurate species identification results in hours.

Our new collaboration with SAP, the largest global enterprise digital partner in the world, will help ensure that test results can be integrated with a company’s supply chain data for instant visibility and action throughout the enterprise. In fact, SAP provides enterprise-level software to customers who distribute 78% of the world’s food and accordingly its supply chain validation features have earned global acceptance.

The food fraud and safety digital tracking innovations being developed by SAP will be critical in attacking fraud. Linking paper documents with definitive test results at all points in the supply chain is no longer a realistic solution. Paper trails in use today do not go far enough. Product volume has rendered paper unworkable. Frustrated retailers voice concerns that their customers believe they are doing more testing and validation than they can actually undertake.

We must generate more reliable data and make it available everywhere in seconds in order to protect and strengthen the global seafood supply chain.

Catfish will become the first seafood species to be covered by United States regulations as a result of recent Congressional legislation. This change will immediately challenge the capability of supply chain accuracy. Catfish are but one species among thousands.

Increasingly, researchers and academics in the food industry recognize fast and reliable in-house and on-site testing as the most effective method to resolve the challenges of seafood authentication.

DNA-based analyses have proven repeatedly to be the most effective process to ensure accurate species identification across all food products. Unfortunately, verifying a species using DNA sequencing techniques typically takes one to two weeks to go from sample to result. With many products, and especially with seafood, speed on the production line is essential. In many cases, waiting two weeks for results is just not an acceptable solution.

Furthermore, “dipstick” or lateral-flow tests may work on unprocessed food at the species level, however, DNA testing provides the only accurate test method to differentiate species and sub-species in both raw and processed foods.

Polymerase chain reaction (PCR), which analyzes the sample DNA, can provide accurate results in two to three hours, which in turn enhances the confidence of producers, wholesalers and retailers in the products they sell and minimizes their risk of recalls and brand damage.

New technology eliminates multi-day delays for test results that slow down the process unnecessarily. Traditional testing options require sending samples to commercial laboratories that usually require weeks to return results. These delays can be expensive and cumbersome. Worse, they may prevent fast, accurate testing to monitor problems before they reach a retail environment, where brand and reputational risk are higher.

Rapid DNA-based testing conducted in-house and supported by sophisticated digital tracking technologies will improve seafood identification with the seafood supply chain. This technological combination will improve our global food chain and allow us to do business with safety and confidence in the accuracy and reliability of seafood shipments.

Gina Kramer
Food Safety Think Tank

Mobile Technology Could Help Your Business in an Outbreak

By Gina R. Nicholson-Kramer
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Gina Kramer

Join Gina Kramer at the Listeria Detection & Control Workshop, May 31–June 1 in St. Paul, MN | LEARN MOREI recently spoke with Wes Billingslea, one of the co-founder’s of Till Mobile Corp., a company founded because its team realized large brands needed to connect all the way down to the smallholder and grower level. There are more than 6 billion mobile devices on earth and only a small percentage of them are smartphones. Till uses voice, text, and SMS-mobile to enable two-way communication with smallholders, and to deliver visibility and traceability. The company is able to collect massive amounts of data from growers because there is no resistance to using mobile phones. It works with your existing systems to identify and fill data gaps that create risk. The big brands access detailed analytics and can communicate directly throughout their supply chain to accelerate supplier onboarding, support local and alternate sourcing, and check inventory, pricing, and food safety standards.

I asked Wes, as a food company, how could this technology save me money? To start, it allows you to check inventory and pricing, and helps you adhere to your food safety standards beyond the packinghouse or distributor. It can also help you get more out of your existing systems to protect your IT infrastructure.

In the following video, we discuss the Salmonella outbreak in cucumbers that occurred last summer. In such a scenario, this new technology could help save food retailers money during an outbreak or recall by giving them greater visibility and real-time data, and help them source alternatives directly.

Food Fraud

PwC Partnership Fights Food Fraudsters

By Food Safety Tech Staff
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Food Fraud

Each year, food fraud costs the industry $30–$40 million worldwide, according to Michigan State University. In an effort to help food companies combat vulnerabilities in their supply chain, PricewaterhouseCoopers (PwC) and non-profit organization SSAFE have created a free tool to help detect food fraud. Developed in partnership with Wageningen University (The Netherlands), VU University Amsterdam and other industry experts, the tool consists of 50 questions and is available via a downloadable app or Excel spreadsheet. Upon completion, the tool provides a profile of the company’s potential for food fraud vulnerability in the form of a report that can be added to food safety documentation.  According to PwC, the assessment is confidential, and while the profile doesn’t offer any mitigation techniques, it provides links on where and how a company can find solutions to the issues mentioned.  

“Beyond the economic cost, food fraud can harm public health and damage consumer trust,” said Craig Armitage, PwC’s Global Leader of Food Supply and Integrity Services in a press release. “Food frauds, such as horse meat being passed off as minced beef or the addition of melamine in dairy, have increased the urgency with which the food industry is taking action.”

Companies can begin using the Excel spreadsheet, which is available on PwC’s website. The app will be available in February.

TraQtion dashboard

New Software Warns of Out-of-Compliance Suppliers and Products

By Food Safety Tech Staff
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TraQtion dashboard
TraQtion dashboard
Screenshot of TraQtion dashboard. Click to enlarge (Courtesy of NSF International)

TraQtion has announced new software that is designed to help companies better manage supply chain risks. By scanning, evaluating and interpreting data, the upgraded cloud-based software is able to anticipate potential issues and whether corrective measure must be taken immediately, and alerts clients to suppliers, products and sites that pose a higher risk. Its intelligent compliance engine runs an algorithm in the background to provide visibility to problem areas and prioritizes responses across a company’s locations accordingly. A product inspection module automatically identifies in-spec and out-of-spec products through testing and inspection. A dashboard gives users an overview of the company’s quality and compliance program, and uses a color-coding system to rate suppliers, products and sites.

TraQtion is a wholly owned subsidiary of NSF International.

FSMA, Food Safety Tech, FDA

Certified to FSSC 22000? You’re Ready for FSMA

By Maria Fontanazza
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FSMA, Food Safety Tech, FDA

If my company is GFSI-certified, is it also FSMA compliant? The answer is: With shared goals of producing safe food, coordinating preventive measures and ensuring continuous improvement, if your company is FSSC 22000 certified, you’re well on the road to FSMA compliance, according to Jacqueline Southee, Ph.D., U.S. Liaison, FSSC 22000.  Southee discussed several areas in which FSSC 22000 aligns with FSMA as part of a recent Leadership Series, “GFSI in the Age of FSMA”.

Supply Chain Visibility

FSSC 22000 is applicable to all aspects of the supply chain and requires interactive communication (all of which must be documented), from the downstream level in ensuring raw materials and suppliers meet requirements of ISO 22000 framework to communication with customers and suppliers to verify and control hazards.

FSMA controls the hazard of food within the United States, says Southee, whereas GFSI certification is a global initiative, thereby extending supply chain visibility to foreign suppliers.

The Food Safety Plan

There has been much discussion surrounding building a FSMA-ready food safety plan and the migration from HACCP to HARPC. “HARPC can be referred to as HACCP with preventive controls,” says Southee. FSSC 22000 provides a flexible yet robust approach in a framework that is applicable to all situations (i.e., different manufacturers have different issues, such as producing ice cream versus baked goods). Rather than being prescriptive, the prerequisite program has the flexibility to apply to a particular situation. In addition, validation, verification, monitoring and documentation are an inherent part of the ISO 22000 approach and the FSSC 22000 certification.

FSSC 22000 serves as an effective tool in preparing companies for FSMA compliance. “We’re not a regulatory system; FDA has that domain,” says Southee. “They’re the ones that carry the responsibility of meeting those regulations. We work with everyone…to do the best job we can.”

Audit Readiness

Being audit ready all the time is a key part of preparing for FSMA. FSSC 22000 certifies a food safety management system (a three-year certification cycle) and requires internal audits of company performance, along with helping companies ensure that their records are organized at all times. The goal is to install a management system that enables constant monitoring, reevaluation and assessment as part of an ongoing process of keeping food safe, according to Southee. “If you’re certified and have an effective ongoing management system, unannounced audits won’t be an issue,” she says.

Food Safety Culture

FSSC 22000 and ISO 22000 provide a strong foundation for building food safety culture. ISO 22000 requires proof of management commitment to the food safety process, along with accountability, and for management to make resources available to see the food safety process through. “We agree that culture has to come from the top,” says Southee. “The personnel have to see that management is committed, and the culture will come from that commitment.” It also requires constant communication, up and down the supply chain as well as internally. This includes involving all employees and making sure that they know what they’re doing (i.e., training). “Everyone needs to know they’re valued and important, and how their function contributes to the function of safe food,” says Southee.

FSMA Alignment and Gap Analysis

There are sure to be some gaps when it comes to FSSC 22000 and FSMA. FSSC 22000 has commissioned a gap analysis to compare the preventive controls for human and animal food rules with the GFSI scheme and will add addendums as needed. Areas of review include a requirement to include food fraud into the hazard analysis and a review of unannounced audit protocol.  

Risk, food safety

Seven Threats to the Food Supply Chain

By Food Safety Tech Staff
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Risk, food safety

Food businesses face a range of risks, from lack of consumer confidence to supply chain security. As FSMA regulations and issues such as climate change rise to the top of the list of priorities of global governments and regulators, food companies need to secure the reins on their businesses to ensure they can face these seven emerging risks in 2016 and beyond.

SevenEmergingRisks_FoodSupply
Infographic courtesy of EtQ, Inc.

 

Fontanazza and Fields

Food Companies: Know Your Suppliers

By Food Safety Tech Staff
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Fontanazza and Fields

Read the Q&A with Randy Fields, “Senior Execs in for a Rude Awakening Regarding Supply Chain Compliance”Both accountability and liability will play a role in how food companies work with their suppliers moving forward. “The global food supply chain has really been based on trust for the last 70 years,” said Randy Fields, chairman and CEO of Park City Group and Repositrak. In a video interview with Food Safety Tech at the 2015 Food Safety Consortium, Fields explains how companies must go beyond simply “trusting” their suppliers to having a keen awareness of their suppliers’ activities from a compliance perspective.