By Alan Grant
Verifying compliance of your supply chain can sometimes seem overwhelming, yet it is a critical task for assuring food safety and regulatory requirements are met.
This year represents an unprecedented milestone in the North American food industry. The Food Safety Modernization Act is undergoing implementation and the Canadian equivalent, the Safe Food for Canadians Act, is about to be implemented, which will have the combined effect of raising the food safety bar for North American food processors. Part of the new regulatory powers on both sides of the border will be the authority for FDA and CFIA to order product recalls, whereas in the past most recalls have been voluntary on the part of the industry. The potentially higher cost and brand damage due to product recalls, puts more onus and liability on brand owners to ensure food products and ingredients, both domestic and imported, are safe and compliant.
NSF International has developed years of practical experience in helping retailers, manufacturers, distributors, brokers, importers and industry associations understand and manage the risks associated with their global supply chain partners.
Five of our key strategies in helping our partners minimize risk in their supply chain are:
It is important to have a defined set of food safety criteria with which to benchmark suppliers. Understanding that food safety management is a continuous journey, it is expected that the benchmark be reviewed and improved regularly. These criteria will set the bar for both regulatory and quality compliance. It important that the benchmarked criteria are communicated within their supply community.
2. Communication Process
Supplier compliance strategies are a shared responsibility between all operating departments including Quality Assurance, Operations and Procurement. Internally, it is important to manage all suppliers with the same set of expectations, independent of relationship history. All internal departments must have an understanding of each supplier’s risk assessment to fully comprehend the risk to the business that a non-compliant supplier could pose. Suppliers need to regularly be informed of the program elements and any change in criteria, and of their risk ranking.
3. Supplier Criteria
It is important to develop a systematic process of supplier criteria based on risk. Risk assessments of supplier material should be a combination of assessment of the specific ingredient and potential risk to the overall brand. Criteria for consideration in a supplier review can include review of elements of the food safety plan, process flow diagram, hazard analysis, food fraud vulnerability assessments and independent third-party audit results such as SQF, BRC, and FSSC 22000. Third-party audits should include a detailed review of the food safety plan and corrective actions. Such a review is more than the collection of third-party audit certificates. There needs to be clearly defined criteria and process steps for escalation where risks and non-compliance have been identified. Building non-compliant penalties into supply agreements is recommended.
4. Technical Reviews
It is important for companies to have a Supplier Compliance Program. Companies looking to manage the supplier approval process internally should be reminded that this job function is not a junior-level position.
Due to the complexity of the supply chain it can be valuable to have this outsourced to an experienced independent third-party who possesses an understanding of global regulations and food safety schemes to address the challenges of the global stage. An independent third-party service provider is more likely to be able to leverage a centralized review team to ensure calibration and consistency of supplier reviews.
5. Software Support
The challenge many of our partners have encountered is receiving numerous amounts of documents from the supply chain, and managing this information on spreadsheets and in file folders. This is a very laborious exercise that drains the resources of a quality department quickly. Automating this process to track supplier compliance throughout the supply chain is possible through proprietary software programs available in the industry which have been designed by food safety professionals to address supplier compliance management issues from start to finish.
Outcomes of a structured supplier compliance program include:
• Regulatory compliance to FSMA and SFCA in a structured, auditable process. Keep in mind that importers are now are held to the same standard as domestic producers.
• A transparent supplier management program will drive compliance through visibility and clear expectations.
• Leveraging a third-party service to manage the supplier approval process will allow the ability of the brand owners’ quality management staff to focus on those areas of highest risk and eliminate the countless hours required for basic communications and document reviews.
• Having a benchmarked process in place provides the ability and structure for continuous improvement.
• A structured process should minimize risk to company brands.
The purpose of a supply chain compliance program is not to rubber-stamp a supplier approval. The value is to understand and manage supplier risk to the business.
Alan Grant is Senior Manager, Consulting and Technical Services, NSF International