Tag Archives: visibility

Amy Kircher, Food Protection and Defense Institute

Supply Chain Awareness Critical to Food Safety

By Maria Fontanazza
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Amy Kircher, Food Protection and Defense Institute

The supply chain of a single product often involves multiple levels. For a company to adequately evaluate its risk and vulnerability, it must have a grasp on the full extent of its supply chain, according to Amy Kircher, Dr. PH, director, Food Protection and Defense Institute. “When we think about the supply chain there are two points to consider: One is just being aware of the depth and breadth of a supply chain to create a food product. It’s much larger than who you buy from and who you sell to,” says Kircher. “Second is moving from a reactive mentality to a proactive mentality. How do we get ahead and close vulnerabilities before they are exposed or monitor threats to the food system such that we can put mitigations in place.” During a discussion with Food Safety Tech, Kircher shares her perspective on how companies can understand and protect their supply chain.

Amy Kircher, Food Protection and Defense Institute
Amy Kircher, Dr. PH, director, Food Protection and Defense Institute

Food Safety Tech: What are the biggest supply chain threats facing food companies?

Amy Kircher: I think one of the biggest challenges is just understanding the entire food supply chain and all the buying, selling and manufacturing that happens along that line. When food comes from a point of origin—whether it’s a farm or a manufactured nutrient—what are all the steps and movements of that product that then results in the final product that the end consumer buys? Typically companies know at least one [step] back and one [step] forward, but they don’t always know the entire breadth of the particular ingredient that they’re buying. Or, if they’re in the middle of the supply chain, [they may not know] where all of their products may be going if it’s sold multiple times (i.e., a spice as an ingredient). There are exceptions—some companies are vertically integrated and know their entire supply chain. But on average, that is a real challenge: Understanding the complexity of the supply chain, where are you in that process, whom you are buying from, and where the food is going afterwards.

FST: How can companies gain a better understanding of their supply chain?

Kircher: Ask questions of whom you’re buying product from—from where are they sourcing the ingredient or commodity? For example, if you’re making a five-component food product, ask your supplier, where does it get its stock from? From where are you sourcing? Have an open dialogue with your vendors and make sure you have the process in place so if you had to quickly identify where an [ingredient] was from, you could.

Secondly, understand the ingredients that you need to procure and be able to monitor where there might be threats for that particular product or commodity. If you need to buy peppers as an ingredient for a spice blend or a can of soup, [you should] be able to monitor what’s happening in that particular commodity: Has there been an intentional adulteration recently? Any recalls? Have there been weather issues in the part of the world where your particular pepper is sourced? If we know there is a natural disaster in a region, how quickly are you notified? Do you have alternate sources as a backup?

A great example is the Ebola [outbreak]: When Ebola happened, there were changes that were happening with cocoa almost daily, because most of the cocoa is sourced out of West Africa, exactly where Ebola was happening. There were price shifts and some transfer concerns where cargo ships weren’t coming into port in some of those countries. It’s important to have an understanding of the ingredients or commodities that you source and be well aware of what’s happening in that landscape.

FST: What steps should companies take to protect their supply chain?

Kircher: You should be doing vulnerability and risk assessments of your supply chain. Know where there are risks of that particular supply: Those risks could be a multitude of things, be it a natural risk or something related to a change in trade policy. Know where you have vulnerabilities within your system: Where could a particular product be exposed to a vulnerability, either natural or intentional? [From there], start assessing what can be done about it. If there’s a specific ingredient that you need to have to make a particular product, where does it come from and do you have alternative sources? What kind of testing mechanisms do you have in place? Some vendors only have one manufacturing site or one receiving site for a product they’re manufacturing. How secure is that processing plant? Is it in a hurricane zone? Have you had criminal activity there? Understanding where there are vulnerabilities in your supply chain allows you to prioritize which ones you should spend money on mitigating.

FST: What technologies do you find to be the most effective in assessing risks and providing visibility throughout the supply chain?

Kircher: I think there are several products that will help. At the Food Defense and Protection Institute, we have a couple. The first is a supply chain documentation and analysis tool (CRISTAL) that allows you to document your supply chain throughout the whole system. Then it applies weights and algorithms to allow you to see what is most critical in your supply chain, and from there you can look at risks from hazards. For a lot of companies, the first step is to map the entire supply chain. Having technology that allows them to do that efficiently versus drawing or creating an Excel spreadsheet allows them to visualize where they might have gaps/challenges, followed by risk and vulnerability assessment.

Second is horizon scanning, or looking at early indications of warnings of events. Our tool is called FIDES (Focused Integration of Date for Early Signals). It looks at predicative analytics—are there conditions or drivers that are occurring that might result in an emerging event or event that might create a problem? We can always scan and monitor where we might have challenges.

We want to move people from a reactive food protection and defense to a preventive posture where you are starting to be ahead of it [threats] and understand where you might have a risk or vulnerability that gets exposed such that you can mitigate it prior to a consumer purchasing [the product].

Michael Link, AFN Logistics
Retail Food Safety Forum

Supply Chain Logistics: 4 Reasons You Need a Retail Strategy

By Michael Link
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Michael Link, AFN Logistics

Attend the Food Safety Supply Chain Conference, June 5–6, 2017 in Rockville, MD | LEARN MORERetailers demand peak supply chain performance, and suppliers who fail to provide on-time, accurate deliveries face costly penalties. Further to peak performance, retailers also require a high level of supply chain visibility and transparency to ensure the quality and safety of the food they’re selling. The many moving parts of the supply network require a fine-tuned logistical approach, and a big piece of this is having a retail strategy that optimizes and consolidates your food shipments. This helps suppliers in a myriad of ways, which we’ll delve into here.

Before we do that, let’s set the stage a bit: Compliance programs are the norm within today’s retail supply chain. These programs outline appointment times and delivery standards to ensure quality of goods—among other things—along with the penalties for not meeting the terms. Retailers’ compliance programs vary, but the theme is consistent: Non-compliance results in major costs that add up over time and cause the risk of loss of business.

To gain a competitive advantage, shippers are focusing more on retail consolidation programs that optimize and consolidate shipments while focusing on customer service to help shippers get ahead. These programs can provide complete visibility, enhance control, capture critical business intelligence, create efficiencies, decrease costs, reduce mileage, improve speed to market, and decrease over, short and damage (OS&D) claims—among other benefits.

Let’s take a closer look at some of these:

1. Enhanced Inventory Management

Inventory control is critical in the retail sector. Retailers try to keep their inventories low and have just-in-time deliveries from vendors. This helps to ensure goods are delivered and sold at the highest quality, which, for certain foods like fresh produce or refrigerated items, can often have a narrow window of freshness. At the same time, retailers want to make sure the product they need is going to be available. This is especially the case when seasonal demand for certain food items ebbs-and-flows, such as during the holidays.

As part of a retail optimization program, supply chain service providers can help retailers and suppliers manage inventory by analyzing data and making proactive, rather than reactive, inventory and transportation decisions.

2. Reduced Transit Times

The growth of the omni-channel sector—including in the grocery business—means customers want and expect things at the click of a button, and lead time has a major impact on the cost, quality control and continuity of ordering patterns. In fact, a recent report from Internet Retailer, 2016 Online Food Report, details how the online grocery sector is suddenly a booming market, and is expected to grow by 157% to $42.1 billion this year alone, according to Morgan Stanley.

Proactive communication and continual analysis of transit time data can help suppliers plan and execute an effective transportation strategy as the omni-channel food retail market continues to tick up. Namely, by combining potentially inefficient partial loads into fully utilized truckloads, suppliers can achieve shorter, more predictable transit times. With proper pre-planning, loads can be consolidated, which then allows zone skipping and more direct transportation routes. Zone skipping also reduces the number of times freight is handled, which reduces the risk of damage and errors.

3. Network Optimization

A comprehensive network analysis and optimization effort can drive significant reductions in landed costs while maintaining, or even improving, transit times by considering production, warehousing and inventory needs in addition to transportation. Warehouse location is a critical decision; however, growth projections and potential new markets must be included in forward planning to ensure that today’s appropriate solution does not become tomorrow’s barrier to scalability.

The decision to work with a single national warehouse provider or multiple regional warehouse providers is driven not solely by cost, but also by the consideration of utilizing a single or multiple warehouse management systems. This analysis complements a mode optimization effort, allowing shippers to control costs, ensure product safety and quality and enhance service through the optimum blend of intermodal, truckload and LTL services.

4. Better Visibility and Collaboration

Supply chain performance is critical to controlling costs, improving service, and when it comes to the food supply chain, ensuring quality of perishable goods. According to a survey by ECR McKinsey, successful collaboration on average resulted in a 4.4% decrease in out-of-stocks and a cost reduction of 5.4%.

Collaboration can begin early in the supply chain. Shippers’ supply chain providers can provide an analysis of the entire supply chain and break down the invisible barriers that exist between different divisions within a supplier. Often, suppliers don’t realize they are operating in silos, are unaware of what others within the business may be doing and are unaware of the implications of those actions. They can also become so focused on meeting their immediate goals, they lose sight of the big picture.

Early planning also helps providers offer a custom solution. For food service companies with multiple distribution facilities, retail consolidation becomes an important piece in the supply chain strategy and a critical method for improving profitability.

Implementing an Effective Retail Optimization Program

There are several elements of an effective retail optimization program, including:

  • Increased visibility
  • Network optimization
  • Mode optimization
  • Consolidation
  • Pool pointing

The right retail consolidation programs allow the entire supply network to comply with retailers’ requirements while also increasing visibility, reliability and quality of product. Overall, this creates value for the shipper and their end-customers through improved service. It’s a win-win situation for all parties involved.

Katy Jones, Foodlogiq
FST Soapbox

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

By Katy Jones
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Katy Jones, Foodlogiq

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

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

Do Your Homework

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

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

Communication Is Key

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

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

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

Regular Check-Ups

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

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

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

Keeping Consumers Safe and Happy

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

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

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