Tag Archives: vendors

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.

Recall

Undeclared Allergens, Bacterial Contamination Top Q1 2020 Recalls

By Food Safety Tech Staff
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Recall

The COVID-19 crisis has led to supply chain management challenges for food manufacturers and processors, ingredient suppliers and vendors, and regulators. In its Q1 2020 Recall Index, experts from Stericycle advise that companies use this time to take a closer look at their supply chain processes and reevaluate their recall plan.

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COVID-19 in the Food Industry: Mitigating and Preparing for Supply Chain Disruptions
“Companies in the food industry have their work cut out for them during this outbreak and for months after,” the report states. “But the key is to focus intensely on the basics. It’s too easy to assume food safety protocols and quality controls are followed as strictly and uniformly as they always are. Use this time wisely to recheck your supply chain, review your food-safety processes and update your recall plan.”

FDA Recalls: Notable Numbers (Q1 2020)

  • 141 recalls affecting more than 8.8 units
  • Undeclared allergens: 39.7% of recalls. The top cause of recalls for the 11th consecutive quarter
  • Bacterial contamination: 58.1% of recalls by number of impacted units
  • Nearly 20% of fresh and processed food recalls impacted products distributed nationwide

USDA Recalls: Notable Numbers (Q1 2020)

  • 6 recalls impacting 22,500 pounds of product
    • More than half of recalled pounds were a result of lack of inspection
  • Recalls dropped nearly 79%
  • Undeclared allergens: 4 recalls
Susanne Kuehne, Decernis
Food Fraud Quick Bites

An ‘Egg-stra’ Splash Of Color

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food fraud, eggs
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Free-range country chicken eggs, often recognizable by their different color, fetch 30–40% more revenue than eggs from caged hens. Leghorns, a common type of chicken used for mass-production, lay white eggs. In this fraud case in India, leghorn eggs were colored by using water-based dyes, for example, made from tea. The eggs were confiscated and destroyed by the Food Safety and Standards Authority of India (FSSAI), and the vendors received a warning.

Resource

  1. Thomas, W. (February 3, 2020). “FSSAI destroys artificially coloured eggs”. The Hindu.
Melody Ge, Kestrel Management
FST Soapbox

Five Tips to Add Food Fraud Prevention To Your Food Defense Program

By Melody Ge
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Melody Ge, Kestrel Management

Food defense is the protection of food products from intentional contamination or adulteration, as well as biological, chemical, physical or radiological agents. It addresses additional concerns including physical, personnel and operational security. A traditional food defense program is generally perceived as a program that includes site security, visitors control or even on-site personnel monitoring. However, with the new FSMA Preventive Controls Rules and GFSI Guidance for all the recognized schemes, additional to consumer demand on product transparency, we must now take food fraud into consideration within our food defense program.

What is food fraud? According to the study from Michigan State University, food fraud is a collective term used to encompass the deliberate and intentional substitution, addition, tampering or misrepresentation of food, food ingredients or food packaging, or false misleading statements made about a product, for economic gain. It becomes not just a potential for food safety issues, but also a severe issue that could potentially damage your brand reputation. It is hence critical to have appropriate protection and prevention, as the umbrella encompasses both food defense and food safety.

What does this mean to food manufacturers? The awareness of traceability and transparency certainly should rise. Most facilities should have a food defense program in place to comply with any GMP or GFSI requirements. To make it more competent for food fraud, what could we do? Here are some quick tips to strengthen your food defense program with food fraud prevention:

  • Tip 1: Review your entire supply chain one more time, considering fraud risks
  • Tip 2: Use the HACCP concept for food fraud risk analysis
  • Tip 3: Double-check incoming goods
  • Tip 4: Make the entire supply chain transparent
  • Tip 5: Document all records

Tip 1: Review your entire supply chain one more time, considering fraud risks

The unknown could potentially hurt you or your program. You would prefer to be aware of what might go wrong before it goes wrong, which is why a review should be one of the key steps in your food safety program. It might be a familiar terminology in the industry; however, we could not eliminate its importance to your entire food safety management system. To maintain product authenticity, understanding where your ingredients come from and who your business partners and suppliers are become the first step to success. It also gives you an excellent opportunity to analyze the risks and potential risk sources. A thorough review should include all the approved suppliers and vendor information. Knowing the source of your product provides you with a good foundation for your food defense program. How can we efficiently review our own supply chain?

  • List all approved suppliers and contract vendors
  • Make sure all ingredients are used accordingly and as intended
  • Keep the supplier registration list up to date

The more you understand your own supply chain, the more helpful it will be to your food defense program.

Tip 2: Use HACCP concept for food fraud risk analysis within supply chain

Hazard Analysis Critical Control Point (HACCP), as defined by FDA, is a management system in which food safety is ensured by addressing through the analysis and control of biological, chemical and physical hazards throughout the entire supply chain. This mentality of HACCP could be used and very helpful to analyze the potential fraud risks. Its seven principles and 12 steps could be implemented to identify your own fraud risks. And it is important for us to identify the hazards from potentially adulterated ingredients to determine the next step for what needs to be controlled. Utilizing the 12 steps, we can list all the key points and steps that could potentially impact your products’ authenticity. The risks can come from personnel, visitors or the ingredients themselves. There are many resources out there; for example, US Pharmacopeia (USP) has developed a global food fraud database that is a good resource for all ingredients that have been falsely used in food products.

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Tip 3: Double-check incoming goods

Many articles address the importance of vulnerability assessments to prevent food fraud plus any documentation your suppliers have provided. Yes, it is critical; however, as one of the important steps in the HACCP program, verification is also important to make sure what goes into your finished products is safe and guaranteed. This could be addressed and monitored by implementing genetic testing. Each product and ingredient has its own DNA, just like our fingerprints. Nowadays, there are many methodologies developed for this type of test. The DNA testing could be a helpful tool to help your facility verify the authenticity of your incoming raw materials. Genetic testing using techniques like polymerase chain reaction (PCR) technology to detect the DNA of the product upon receiving the incoming goods. Moreover, as fast as it can be, facilities can now receive the test results within one to two hours. The testing itself might seem like an extra step with more effort and labor. However, the return is a huge saving on damages caused by food fraud. You can now start to verify and control your supply chain from the beginning to avoid any potential adulteration.

Tip 4: Make the entire supply chain transparent

This transparency not only applies to internal employees but also outward to your customers and vendors. That way you can familiarize yourself with your own supply chain, while at the same time establish brand reputation and confidence to your customers.

Tip 5: Keep all records documented

The records you should keep, besides a registration list of all your ingredients and vendors, should include the inventory list, how ingredients are used, whether it is used outside of its intended use and authorized personnel signatures. The following are some tips for an efficient document control:

  • Make it clear and straightforward
  • Categorize it based on your own facility operations
  • Keep the records in the same order of your supply chain from ingredients to end consumers

After all, with the newly released requirements, as QA professionals, we need to start developing a mindset that considers food fraud as a type of hazard, and develop monitor and control strategies for mitigating it. Just like we are now so familiar with the physical, chemical and biological hazards within our production facilities compared to decades ago, food fraud will no longer be a scary term once it is proficiently understood and properly controlled.

Approved

Finding Compliant Suppliers May Be Getting Easier

By Maria Fontanazza
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Approved

Six years ago, following FSMA being signed into law, Associated Wholesale Grocers, Inc. (AWG) knew it had to implement a supplier approval program to comply with the Preventive Controls rule. At the time, it had a manual process for managing the records of its 3000+ suppliers. The company needed an effective place, accessible any day of the year (and at any time), to collect and store all of its corporate and food safety documentation.

“I come from a manufacturing program where I was used to having a very robust supplier approval program,” says Shelly Stegner, director of food safety for AWG, a grocery co-op. “But in distribution companies such as AWG, food safety hasn’t necessarily been the culture, because we don’t do any reprocessing or repacking, or touch the product. When we had to comply with [FSMA], it was a whole new thing for AWG, and we knew we had to roll something out.”

AWG spent about two-and-a-half years looking for a company that could help not only manage documentation but could also give them control over the documents from a visibility perspective. After conducting thorough research, AWG selected Repositrak Inc.’s cloud-based Compliance Management solution. The product was recently launched to help companies during the sourcing process, assisting them with supplier qualification, order negotiation and on-boarding a new supplier. The solution also highlights compliant vendors based on business and safety requirements.

Food Safety Tech: What are the advantages and drawbacks to using an automated solution like Repositrak?

Shelly Stegner: It’s an easy way to keep track and retain all the records that you’ve never been able to retain before. And not only can you retain them, but there are also visual statistics behind the documents (which you don’t have when with hard copies). It’s not just having the documents—it’s actual usable data when you use [Repositrak] that helps drive efficiencies within our company, and it helps decrease our risk and liability with vendors—for example, we know that their certificate of insurance has expired, whereas before [using Repositrak], we didn’t know that.

The drawbacks are cost. Is it the cheapest option out there? No. But is it the most efficient option that we found? Yes. A lot of the companies may have been cheaper, but we would have had to hire an individual to do all the work. There is a cost associated with it, so [some] vendors are hesitant. The other drawback is that the industry overall has many different solutions, so if the supplier is not using Repositrak for their supplier approval program, it’s another point of entry. Maybe it only takes 30 minutes to do it, but it’s still something else that they have to do.

I think it’s becoming easier for vendors with Repositrak as we get more traction and as it becomes more of an industry-known [product]. Suppliers only have to upload documents once, and it automatically reaches all their customers. So for them, the more [suppliers] that are on one system, the easier it is for the whole industry.

FST: What are the challenges to implementing this type of system?

Stegner: For a company that was completely in the Stone Ages, we didn’t even have a list of all of our active vendors—so we thought we had 6000 active vendors, and we only had a little more than 3000. Just getting the information to Repositrak about active vendors and contacts proved to be the most difficult thing for us. Once we got Repositrak the key information, they ran with it.

FST: From time management perspective, what are the savings?

Stegner: Before we had nothing in place. Now, during my third-party audits or when FDA arrives, I can show them where we are in compliance when they ask about our supplier program. It saves me a ton of time in that regard.

Now when I have a recall, I can go into the system and look up a contact, versus waiting to get a contact from a category manager. If I need to issue a recall, I can see if [the vendors] have reviewed our recall program and issue it without waiting on that either.

As far as the time it takes to approve documents, there’s an increased time, but there’s also an awareness that we never had before. So not only are we collecting the documents, but now we are building a whole food safety culture that also has a new awareness and understanding of what it means to distribute safe food.

FST: What are the general challenges you see companies facing, especially in the area of compliance and having visibility throughout their supply chain?

Stegner: I think there’s a challenge with some companies on keeping information confidential because they simply don’t want to share information.

As far as traceability goes, our company is challenged with technology. [There’s] the financial need of upgrading our technology to have the true traceability that has so increasingly become required by consumers from farm to fork. A great deal of technology is needed to understand that in real time.

The farmer has their traceability, and the supplier has their traceability, we have ours, and then there’s the retailer—it’s tying all those together that proves to be a bit of challenge.

Randy Fields, Repositrak
FST Soapbox

Sanitary Transportation Rule: Ignore at Your Own Peril

By Randy Fields
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Randy Fields, Repositrak

FDA posted the FSMA rule on the Sanitary Transportation of Human and Animal Food in April. The majority of retailers, wholesalers, suppliers and carriers will have one year to comply with this new rule. The sanitary transportation rule sets out to prevent practices that would introduce contamination risk during the transportation of food through the supply chain.

For retailers, wholesalers, suppliers and carriers, the final rule is really the sleeper regulation among the new FSMA laws. You probably have your HAACP plans and preventative control procedures in place, but do you have the necessary documents in place with your carriers to meet the FDA’s requirements?  And, are those documents easily accessible?

Under FSMA, you must address all FDA record inquiries within 24 hours, and these inquiries can go back two years, plus 12 months beyond the expiration of related service agreements. Failure to respond to an FDA records inquiry is considered a “prohibited act” and can land you in hot water with both the FDA and Department of Justice, which acknowledged they will enforce FSMA through civil and criminal penalties. That’s a game changer.

You are now required to ensure that transportation equipment does not cause the food it is carrying to become unsafe. You must also maintain adequate temperatures throughout your portion of the supply chain and prevent cross contamination. And, you must train your personnel in sanitary practices. All of these factors—processes and procedures, agreements and formal training of personnel—must be documented and made available to the FDA. Put simply, compliance with FSMA is proven through documentation because according to the FDA, if it is not documented, it did not happen!

So what’s the best way to comply with the new rules? Having the information on paper in filing cabinets simply won’t do. Can you imagine searching for specific confirmation that an employee received the proper training in a bank of file cabinets? Even with an efficient system, that could be like looking for a needle in a haystack. Collecting the information in spreadsheets is only slightly better, as it simply digitizes the disorganization.

Retailers, wholesalers, suppliers and carriers need to start their compliance process by reviewing and understanding all of the FSMA rules, guidance procedures and responsibilities. You ignore them at your own peril.

Then, consider automating your recording keeping system.  It is really the only way to efficiently collect and manage the documentation needed to comply with the new law.  When reviewing technology options, make sure you choose a system that is not only easy to use by frontline workers, but also provides sophisticated reporting and alerts to point out potential problems in real time. And, if possible, the solution should do more than just report on food safety activities. As long as you’re investing in a technology to meet FSMA requirements, you might as well implement a system that can potentially save money in other areas such as managing business or training documentation, new vendor approvals, or carrier optimization.

The bottom line is that the sanitary transportation rule will require that you devote additional resources to make the entire extended grocery channel more risk free for consumers and companies alike. And the best way to do that is to implement new technology that gives visibility to product transfers from point of production or processing to the point of purchase, and documents each step along the way.

Cristin Singer, assurance partner at McGladrey LLP

Security Risks, Protecting Reputation Among Concerns of Food & Beverage Companies

By Maria Fontanazza
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Cristin Singer, assurance partner at McGladrey LLP

In a recent survey of food and beverage executives, nearly half of respondents named product quality as a major risk area and cited product recall capabilities as a priority. However, only about one-third of executives expressed confidence in their companies’ current safety and recall strategies.

Cristin Singer, assurance partner at McGladrey LLP
Cristin Singer, assurance partner at McGladrey LLP

“Mitigating [product] risks starts with tone at the top and leadership within a company,” says Cristin Singer, assurance partner with McGladrey, LLP. “Companies have a strong focus on the diligence associated with quality (especially among employees involved in testing) and building long-standing, trusted relationships with suppliers and vendors.”  Many companies are also increasing their testing of imported products and making sure that their partners are familiar with the cultures of the regions from which they import goods as part of their risk mitigation strategy.

The Food and Beverage Industry survey, conducted by McGladrey, involved 179 executives, owners, and decision makers from food and beverage companies with annual revenues between $10 million and $1 billion.

Respondents consisted of retailers (51.1%), manufacturers and processors (34.8%), distributors (26.4%) and growers (6.7%). Figure courtesy of McGladrey.
Respondents consisted of retailers (51.1%), manufacturers and processors (34.8%), distributors (26.4%) and growers (6.7%). Figure courtesy of McGladrey.

Product Recalls. Some companies are basing their product recall strategy on where they actually fall within the supply chain. “I’ve found that when a company feels that they serve as a middle-man distributor, and depending on the contractual relationship with the co-packer, they look to the processor or co-packer to manage the recall process,” says Singer, who is also a member of McGladrey’s national consumer products team.  In addition, Singer sees a focus on due diligence related to co-packers and suppliers to ensure they have proper certification, and processes and procedures in place to manage risks and recalls.

Ability to respond to reputation risks

Wage and Labor. Food and beverage companies are also facing a variety of wage and labor issues. Larger companies expressed concern with increased labor costs and attracting technical talent; smaller companies are more worried about minimum wage legislation labor costs, and retaining skilled labor workers on the shop floor. Executives also cited that minimum wage legislation and the Affordable Care Act could pose challenges over the next year.

Data Security. As more companies adopt platforms that store sensitive data, the security of these systems is important. Yet only about 42% of executives are very confident that their data and systems are secure from authorized access (about 50% are “somewhat confident”). Improving employee security protocols and providing training, involving data security consultants, and conducting due diligence on vendor data security are among the actions that companies are taking to enhance the security of their platforms. “If there’s a data breach, a lot of sensitive information could be put out there, including product formulations, intellectual property, and employee data (social security numbers or healthcare data),” says Singer.  “Initially a lot of companies on the retail side were focusing on data security. Now we’re educating our clients, especially those on the distribution, processing or manufacturing side. All levels of the supply chain are at risk.”