Tag Archives: trading partners

Angela Fernandez, GS1

COVID-19 Puts More Emphasis on Supply Chain Visibility and Data Quality: A Conversation with Angela Fernandez of GS1 US

By Maria Fontanazza
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Angela Fernandez, GS1

The food industry is adapting in completely new ways as a result of the coronavirus pandemic. Retailers are scrambling to keep certain items on store shelves and manufacturers are adjusting their production strategies based on realistic and ever-shifting needs. In a recent discussion with Food Safety Tech, Angela Fernandez, VP of community engagement at GS1 US and FST editorial advisory board member, talks about how companies can improve relationships with trading partners in the face of COVID-19.

Food Safety Tech: What issues do you see happening in the supply chain right now?

Angela Fernandez: Our food supply chain is experiencing overwhelming demand. As an organization that collaborates with both the retail grocery and foodservice sectors to solve supply chain challenges, we’re working with industry on how we can make our supply chain more efficient in the short term, and make it more resilient in the long term.

Consumers are frustrated by empty shelves and the demand created by the pandemic is changing the movement of products. Right now, products are not always accounted for in transit, there are production issues depending on category, and food produced for foodservice outlets like restaurants, schools, and hotels can’t always be easily diverted to a supermarket. The U.S. Food and Drug Administration is lifting restrictions on the sale of food so that it is possible for items that may have been produced for foodservice “sale” to be sold in a supermarket.

FST: In what particular areas are you seeing inventory shortages that are impacting retailers and suppliers?

Fernandez: We’re seeing a couple of different dynamics. For suppliers that produce products for both retail and foodservice channels, we see a shift in reducing production on foodservice items and an increasing manufacturing on their retail product lines. We’re also seeing foodservice suppliers that have not serviced the retail channel previously are now looking to establish new relationships with retailers and recession-proof their businesses. This is not happening as fast as consumer demand for perimeter products like dairy and produce, so we see shortages and products expiring before they can be sold to these new retail customers.

Additionally, food product variation and customization is decreasing. If you think about your own experience going to the grocery store today, or arranging for a delivery, you’re seeing fewer flavors of a product available and fewer brand names you’re familiar with. Suppliers are continuing to shift back to mainstream production of their core product lines just to keep store shelves stocked. I think that’s what we’re going to continue to see—the reduction of customized and specialty items.

For retailers, they have a prioritized the focus on ramping up their e-commerce strategy to relieve the pressure on their stores and service more consumers online. This poses a particular challenge when retailers have limited IT resources and a need to set up a new item supplied from a new foodservice manufacturer that is trying to divert their products to the retail channel to support the demand. And in some cases unfortunately, foodservice suppliers maybe unable to redirect some of their products due to the fact they are not marked for individual sale with the traditional U.P.C. and other retailer requirements.

FST: Is there a better way that food companies, retailers and suppliers can work together during this pandemic?

Fernandez: Food companies can improve the way they work together if they focus on supply chain visibility and data quality. Visibility is key as suppliers are ramping up production on those mainstream products and trying to get them to the proper locations when retailers need them. That’s where I would look at GS1 Standards such as the Global Trade Item Number (GTIN) for product identification and the advance ship notice (ASN) transaction, which lets a partner know when something is ready and being shipped. Global data standards enable the visibility to what delivery a retailer can expect and when, and being able to account for that inventory once it’s inside the DC [distribution center] location so that they can update an online platform. This can help ensure that a retailer has accurate information for the consumer and ability minimize the substitutions that can occur.

The second piece is the data quality aspect—making sure we have the right information around those core items that we are trying to keep stocked on the shelves for consumers who are purchasing those items today. The retail grocery and foodservice industries have been working on making product data more complete and accurate for a number of years, but we’ve seen a heightened focus on it now, knowing that consumers are relying on digital information to be correct since they cannot see the product in person right now. Expanding the data set for the consumer is critical.

FST: What is GS1 US doing right now to help customers better navigate today’s environment?

Fernandez: GS1 US is helping trading partners work with the capabilities they have to implement greater supply chain visibility, improve data quality and ramp up e-commerce operations. Depending on what was already implemented by the manufacturer or retailer, we’re looking at how we can leverage existing capabilities to help partners work together more efficiently to meet demand. How we can help connect the physical product and the digital data, knowing how important that is online right now, not only for trading partners but also for consumers?

One example of how GS1 Standards can be extended is if a retailer is looking to shorten their supply chain and purchase from a local farm. Standards provide a blueprint for supply chain partners to work together in a consistent way. We want to help these companies leverage and extend the standards instead of proprietary systems and abandoning useful processes for item setup, data exchange and point of sale checkout. Those are the types of discussions that we’re having—how GS1 US members can extend the standards that lead to operational efficiency and more easily bring in new partners to help fulfill demand.

Shawn K. Stevens, Food Industry Counsel
Food Safety Attorney

Five Things to Look for in a Trading Partner

By Shawn K. Stevens
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Shawn K. Stevens, Food Industry Counsel

Any ready-to-eat food product is only going to be as safe as the ingredients used to manufacture it. Unfortunately, most companies spend most of their money and time focused on broadening their customer base at the expense of properly screening new or existing suppliers. These companies fail to recognize that the single most significant threat to their company is failing to avert a potentially disastrous supplier problem that is lurking just outside of view. Whether your supplier has an inadequate food safety system or a poor food safety culture, such failures can cause your supplier’s products to become contaminated with deadly pathogens. In turn, if you are sourcing any products from that supplier, its food safety problems will inevitably become your own.

So, what should you do to ensure that your supplier’s food safety problems do not become your own?  Over the past two decades, I have witnessed countless food safety failures cause countless more outbreaks and recalls. Most of these outbreaks and recalls could have been avoided by the companies that were affected simply by taking a few extra precautions. Thus, throughout the years, I have developed the following recommendations that all companies who manufacture or sell ready-to-eat products should follow when they are screening new or existing suppliers.

First, visit each of your suppliers’ facilities and make sure that they are producing your products in a clean and sanitary environment. If the facility is old, worn and has significant maintenance issues, consider moving to a different supplier. Poor facility construction, or the failure to maintain a cleanable and sanitary environment in weathered facilities, remains one of the most significant causes of product contamination. Microorganisms can take hold and easily find residence in older facilities that are not being appropriately maintained. In turn, once harmful pathogens become entrenched in environments that are difficult to clean and sanitize, it becomes extremely difficult to root them out.

Second, make certain that each of your suppliers have a robust environmental monitoring program. The only way for your supplier to prove to you that its sanitation program is effectively controlling microorganisms in the environment is to test and to test often. Unfortunately, many suppliers’ testing programs are woefully inadequate because the suppliers test too infrequently or only after cleaning and sanitation. As a result, in addition to requiring that each of your suppliers implement a robust sampling program, you should also require each of your suppliers to sample their food processing environments at least three to four hours into production. This way, they will always have an accurate picture of the sanitary conditions of the processing area during production.

Third, be sure to only partner with suppliers who are willing to test their finished products before selling them to you. If a supplier has confidence in its sanitation and monitoring programs, then that supplier should be willing to test the products it is selling you. If, however, your supplier refuses to test its finished products, it signals that the supplier does not believe it is able to produce a ready-to-eat product that is consistently free from contamination. Thus, if you ask your supplier to test its ready-to-eat products for the presence of harmful pathogens, and it refuses, immediately take your business elsewhere.

Fourth, inquire about your supplier’s suppliers. Remember, a platoon is only as fast as its slowest runner. If any supplier in the distribution chain has a problem, that problem will affect every company located downstream from the failure. Thus, be sure to get a commitment from each one of your suppliers that it will impose the same requirements on each of its own suppliers, and then verify that your supplier is actually doing what is promised.

Fifth, make sure only to do business with those suppliers that can demonstrate they have a strong food safety culture. The best way to judge the strength of a supplier’s food safety culture is by inquiring about the structure and credentials of the supplier’s food safety team. If the person in charge of food safety for the supplier is well credentialed, has deep experience, and is supported by a well-qualified team, that demonstrates that the supplier takes food safety seriously. If, however, the supplier does not have a food safety director, his or her resume is weak, and he or she does not appear to have adequate support, then the company likely lacks any food safety culture whatsoever. In this case, it would be advisable to find an alternative supplier that has invested in the right people and put them in the right positions.

In the end, the best way to protect your products and brand is to only use suppliers that are appropriately vetted and screened. If you commit to only using suppliers that have invested in clean and sanitary facilities, robust environmental and finished product testing programs, and strong food safety cultures, then you will likely be able to virtually eliminate the chances that your products will be associated with an outbreak or recall. If, however, you choose to leave your suppliers’ food safety performance to chance, your suppliers problems (and, they will have problems) will inevitably become your own.

Shawn Stevens will be speaking during a webinar on this topic, Contracting With a New Trading Partner? Here’s Your Risk-Reduction Checklist, May 2, 2017, 1–2pm ET. Register now.