Recipe for Success: Food Safety Regulations and the Role of Quality Management

Visibility outside the four walls

Published: Wednesday, May 21, 2014 - 15:28

Editor’s note: A webinar on this topic will held on May 29, 2014, at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Register here.

Food and beverage manufacturers have seen a considerable number of changes over the last decade. Mergers and acquisitions have expanded the footprint of many food and beverage organizations, which has increased their product portfolio and generated new sales.

Food companies are also becoming more global by sourcing from international suppliers and using contract manufacturers and packagers to create efficiencies and reduce costs. However, this practice also increases the risk to the brand owners by limiting the visibility into production and quality processes within their vendor network, which could lead to more rework, scrap, and product recalls.

With food recalls more than doubling since 2006, regulators and consumers are demanding that food companies provide products that comply with high quality and safety standards. Consumers expect the brand owner to ensure that finished goods are safe before they are released into the supply chain. So whether it’s the ingredients or the third-party production facility, the brand owner is carrying the burden of blame for product issues.

Deloitte’s study on recall effectiveness indicates that more than half of all recalls can be attributed to suppliers and contract manufacturers. With product recalls impacting a company’s sales revenue, profits, brand reputation, and market share, organizations are looking for ways to create visibility across the value chain to effectively manage supplier risk.

FSMA increases regulatory oversight into food safety

According to the Center for Disease Control (CDC), one in six Americans (or about 48 million) get sick, 128,000 are hospitalized, and 3,000 die of food-borne illnesses. The CDC also estimates that the cost of food-borne illness is about $78 billion per year. This cost to consumer health and the financial impact to an already struggling economy is more than enough reason for regulators to update food safety requirements for food manufacturers in the United States as well as foreign importers.

That is why the passing of the FDA Food Safety Modernization Act 2011 (FSMA) was so important for public safety. FSMA is a risk-based food safety plan that proactively manages domestic and imported foods for human and animal consumption. FSMA finally provides the FDA with the power to implement changes, force recalls, or shut down domestic facilities if they are in violation of compliance requirements.

Food facilities are now required to implement a robust hazard analysis and critical control point (HACCP) plan to identify and monitor hazards and correct issues proactively to reduce the impact on consumer safety. There is also a positive return on investment from implementing HACCP, since companies can reduce disposal costs associated with product that is unfit for distribution. It also reduces the number of product recalls, which can cost up to $90 million or more, as well as impact shareholder value, market share, and brand reputation.

Food manufacturers understand that HACCP is required of most regulatory or compliance initiatives, including current good manufacturing practices (cGMP), ISO 22000, Global Food Safety Initiative (GFSI), Safe Quality Food (SQF) program, and European Union directives, just to name a few. The problem is that managing HACCP via paper or spreadsheet records is time-consuming, prone to errors, and difficult to review during a regulatory audit.

Companies can standardize the process and ensure compliance by automating the HACCP plan in an enterprise quality management system (EQMS), which provides several benefits. First, companies can assign HACCP team members to required tasks. Managing this step in an EQMS system allows tasks to be escalated to employees responsible for specific tasks and tracked through the process.

The second benefit is that each hazard, critical control point, and minimum or maximum level are recorded within the system and a standard operating procedure (SOP) workflow is established to support HACCP training and identify issues earlier in the process. Now you can monitor and perform scheduled internal or external audits to ensure that hazards are monitored effectively. In the event of an issue, a corrective action can be seamlessly implemented in the same system to ensure that actions are resolved in a timely manner. Now management can view HACCP reports using analytics tools to determine the source of reoccurring problems (e.g., plant equipment needs to be serviced or upgraded, additional training needed for third-shift employees, etc.). An EQMS provides the visibility into plant operations that was previously missing.

Visibility outside the four walls

Food imports account for more than 15 percent of the U.S. food supply, which includes 60 percent of fresh produce and 75 percent of seafood. There are 278,000 registered foreign companies in 200 countries importing products to the United States each year. The lack of visibility into supplier processes concerning complaints, corrective actions, and change management leave many organizations vulnerable to product issues that could affect a brand’s reputation and market share.

The FSMA will focus on risk-based and preventative controls to ensure food safety practices within importer’s facilities are being maintained. The FDA now has the authority to suspend a facility’s registration and prevent a company’s food from being sold in the United States. Importers can maintain compliance with the FDA and ship into the United States, but how can organizations be sure that they also meet their own corporate requirements?

Supplier scorecards are traditionally maintained to identify the risk status of a supplier and their raw materials or products. Supplier audits are another effective way to identify issues with a supplier’s facility or processes. The problem is that information is usually siloed and not shared with other facilities, so bigger issues can occur. For example, one company identified a major ingredient supplier as high-risk and decided that they should no longer be a preferred vendor. Since this information was logged in a spreadsheet by the purchasing department, the information was not accessible to the entire company, and as a result the European facility ordered the suppliers’ ingredient and manufactured product with it. As a result, the products had to be recalled, which greatly reduced sales and consumer confidence.

Food manufacturers are looking at how an EQMS can alleviate some of the visibility challenges with their value-chain partners. By utilizing a secure cloud-based EQMS, companies can finally view incidents and corrective actions in real time, reducing the risk and uncertainty associated with outside vendors. The EQMS also provides a central repository of data that can be queried in the event of a regulatory audit, resulting in more confidence that the company has proper controls in place to address quality issues in a proactive manner.

Conclusion

With food manufacturers struggling to achieve transparency across the value chain, EQMS eliminates those visibility gaps internally and externally and connects to existing disparate systems, including enterprise resource planning (ERP), logistics information management system (LIMS), customer relationship management (CRM) and with other IT systems for a closed-loop solution.

Regulation and compliance initiatives provide the guidelines for best practices for food safety, but unless companies have the tools they need to manage key quality processes such as investigations, audits, corrective and preventative actions (CAPA), and supplier quality management, their efforts may fall short of their expectations. Being proactive helps companies protect their brand and ensure that the “best recall is the one you never have to do.”

I will be presenting a webinar on this topic on Thursday, May 29, 2014, at
2 p.m. Eastern. Click here to register.

Kelly Kuchinski is the industry solutions director at Sparta Systems, a Quality Digest content sponsor.

About The Author

Kelly Kuchinski

Kelly Kuchinski, Quality and Document Control product marketing manager at Cority, has 20 years of product management and marketing experience with a focus on CPG, chemicals, life sciences, and technology. Prior to joining Cority, she led marketing and industry solutions for enterprise SAAS and quality management software solutions across multiple industries to enhance functionality, increase efficiencies, and reduce costs. She also held product management and marketing positions at Merck Chemical, Checkpoint Systems, and GE Capital. Kuchinski has an MBA from LaSalle University and earned her Six Sigma Green Belt certification while at GE Capital.