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Thomas R. Cutler

Supply Chain

Avoid Supply-Chain Disruptions Before They Occur

Regulatory management systems offer better collaboration, continuous visibility into supply chains

Published: Tuesday, December 18, 2012 - 13:54

Berner Food and Beverage is a leading private-label and store-brand supplier of food and beverage products such as processed cheese, snack dips, latte, and meal replacement beverages. From merchandising solutions to a full spectrum of value-added services, Berner’s clients experience the same high level of service and support that has earned the company the Category Colonel Award from Private Label Buyer Magazine for 10 of the last 11 years.

Berner attributes its success and consistent approval from retailers in part to its certification to the Safe Quality Food (SQF) 2000 Code. Berner’s facilities, based in Dakota, Illinois, are approved by the U.S. Department of Agriculture (USDA) and certified to the SQF 2000 Code, Level 3. The SQF Program provides food suppliers with a food-safety and quality management certification program that is tailored to its needs. The program enables them to meet product trace, regulatory, food safety, and commercial quality criteria in a structured and cost-effective manner.

The SQF Code was developed in 1994, and pilot programs were implemented to ensure its applicability to the food industry. The code was prepared with the assistance of experts in quality management, food safety, food regulation, food processing, agriculture production systems, food retailing, food distribution, and the Hazard Analysis Critical Control Point (HACCP) Guidelines.

The Food Marketing Institute (FMI) acquired the rights to the SQF Program in August 2003 and has established the SQF Institute (SQFI) Division to manage the program. The SQF 2000 Code is recognized by the Global Food Safety Initiative as a standard that meets its benchmark requirements.

When moving from SQF 2000 Level 2 to Level 3 in 2011, Berner faced significantly more stringent compliance requirements for the quality and food safety practices of its suppliers, including detailed proof of compliance for ingredients and packaging. Berner also wanted greater transparency all the way to its suppliers’ docks. A company initiative for reduced and just-in-time (JIT) inventory required continuous and immediate visibility into any potential supply-chain disruptions due to supplier quality, compliance, or late or short shipment problems. This required a better purchase order acknowledgement process and advance visibility into incoming lots.

Automated supplier tracking

The TraceGains platform selected by Berner consists of supplier management, supplier compliance, and supplier impact modules that help continuously verify that a supplier, as well as every one of its shipments, is in compliance with all the company’s business rules and ingredient specifications.

According to Troy E. Grove, CIO of Berner, the system “automates key SQF 2000 Level 3 elements such as supplier approval procedures, continual assessment, risk assessment, and nonconforming material procedures.” When suppliers are out of compliance or nearing a violation, the system automatically initiates supplier corrective action requests (SCARs). It sends electronic notifications to both internal and supplier personnel, and can automatically suspend suppliers and any of their shipments.

The solution also measures the financial impact of noncompliances and monetizes the potential damage done by a supplier in areas such as manufacturing efficiency, finished goods quality, and product safety. Additionally, the system provides a comprehensive purchase-order-acknowledgement tracking function, with alerts for suppliers’ late or short shipments that might cause supply-chain disruptions.

The 24/7 compliance firewall automatically and continuously ensures that supplier shipments meet all of Berner’s specifications and business rules. Noncompliant shipments can be automatically rejected, and the appropriate staff at Berner and the supplier instantly notified. Berner’s suppliers are told to automatically upload or submit any of the documents typically requested—allergen certifications, insurance documentation, letters of compliance, Global Food Safety Initiative (GFSI) documentation, certificates of analysis (COAs), and other supplier compliance and regulatory documents—which frees up Berner staff to focus on higher-value tasks. Through this solution, Berner gained a mechanism to communicate with suppliers in real time about their performance, helping both sides improve collaboration and relationship.

By automatically analyzing supplier data, including compliance and certification documentation, and comparing all certificates of analysis against ingredient specifications and laboratory results, the solution develops risk scores for each supplier and its ingredient and raw-material shipments.

SQF 2000 Level 3 and major customer audits are handled easily due to the continuous and automated compliance verification. Berner can rapidly provide auditors with a whole host of supporting data. The quality benefits are matched with other bottom-line benefits, including reduced labor, increased accuracy, and compliance. Regardless of format or layout, supplier-submitted COAs (even as email attachments) are automatically received and processed 24/7. Supplier quality claims are immediately assessed, and corrective action is automated as necessary.

‘One version of the truth’

Moving closer to just-in-time inventory, Berner cut inventory by millions of dollars because it no longer needs to keep as much safety stock on hand, does less spot-market buying, and has fewer rush-freight expenses. Automated purchase order acknowledgements allow suppliers to see how well they have managed Berner purchase orders over time, and Berner is instantly alerted to any supplier’s late or short-shipment problems. This leads to an important supplier scorecard. Berner now sees supplier compliance trending information against its business rules and ingredient specifications, giving the company an early-warning system and continually ranking each supplier for performance and risk. Suppliers are now instantly aware of their performance and given the opportunity to adjust immediately, rather than at their annual performance review with Berner.

Most important, Berner believes that the platform from TraceGains allows for better collaboration with its suppliers, because both customer and suppliers are drawing conclusions from the same data. “One version of the truth” allows Berner to better counsel underperforming suppliers, and to acknowledge or reward those suppliers that are performing well. Berner can now better evaluate its own performance and reexamine its own specifications.

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About The Author

Thomas R. Cutler’s picture

Thomas R. Cutler

Thomas R. Cutler is the President and CEO of Fort Lauderdale, Florida-based, TR Cutler Inc., celebrating its 21st year. Cutler is the founder of the Manufacturing Media Consortium including more than 8000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 1,000 feature articles annually regarding the manufacturing sector. More than 4,500 industry leaders follow Cutler on Twitter daily at @ThomasRCutler. Contact Cutler at trcutler@trcutlerinc.com.