[AIB Resource Management] Supply Chain? or a Ball and Chain?

With the host of recent recalls, a well-managed supply chain has become a critical need for company survival. In response to recent recalls related to intentional and unintentional product contamination, FDA has released an approach to manage risks by combining risk assessment for both food safety and food defense into one program called the Food Protection Plan. Supply chain management is a critical need in order to effectively handle risks linked to global ingredient sourcing, food safety and food defense risks, emerging pathogens, and changing consumer demographics and consumption habits.

Ingredient and packaging supplier approval is a vital component in managing the supply chain. Determining the risk level associated with every ingredient and supplier will help you decide how to allocate resources that are needed to adequately identify and manage issues. An effective supplier approval program is the foundation for assuring that an ingredient supplier can meet your food safety and quality expectations. There are some key questions that your supplier approval program should address in order to be fully effective.

Does the ingredient or food contact packaging material have chemical, microbiological or physical hazards that may be passed on to the food product produced?

Knowing the inherent hazards of each ingredient is the key to determining the risk level that the ingredient poses. Dairy and egg products, if improperly processed or not maintained at appropriate temperatures, present a microbiological contamination threat to products produced from these materials. Physical hazards include pits in fruit or rocks in peanuts. Chemical hazards such as mycotoxins, pesticide residues and allergens also must be considered.

You should evaluate the level of severity associated with each risk and the number of consumers that might be affected when ranking product hazards. Food-borne illness outbreaks will be ranked at a higher risk level than an isolated occurrence of a peach pit in a pie. Other factors, such as ages of target consumers or immune issues due to disease or illness, also affect risk determination.

Don’t neglect to consider food contact packaging manufacturers in the approval process. Many facilities use aseptic packaging materials that may produce a risk if the sterility of the packaging material is compromised. In addition, methods of identifying food contact packaging materials must be provided for traceability in the case of food safety, mislabeling or contamination issues associated with the material. 

Can the supplier demonstrate hazard control?

Any product with an associated pathogen hazard has to meet regulatory requirements and thermal processing guidelines to control the risk. The supplier may have to use the services of a process authority to demonstrate that thermal processing is effective. It also may be required to submit to other regulatory requirements, such as the FDA requirements for dairies, where the regulatory authority verifies and places seals on equipment to show that it is properly calibrated to meet food safety requirements.

This is easily demonstrated in the United States, where these programs generally are well-understood and implemented. If ingredients are sourced from a country that does not define stringent regulatory requirements or does not have adequate regulatory oversight, then the supplier may increase the risk level associated with that product to demonstrate control. FDA currently is considering requiring suppliers to provide country-of-origin ingredient statements on their Web sites.

What are the opportunities for misuse of this product? 

Identifying opportunities for product misuse is closely related to the facility’s HACCP evaluation. Issues with technology and consumer use can cause food safety concerns. Some education cutbacks have eliminated home economics programs that teach cooking techniques. Decreasing food safety awareness is one reason consumers undercook food products. Another concern is that microwave oven wattages vary and so the time it takes to cook a product to the correct internal temperature differs. Companies must consider ways that consumers use products. For example, partly cooked frozen waffles sometimes are given to teething babies. If ingredients such as eggs are used, pathogenic microbial risks must be evaluated.

Where does the ingredient come from?

There are two major considerations when determining how ingredients should be sourced. First, decide if you will accept product that is sourced from any manufacturing facility within a food company or if you will approve product on an individual, plant-by-plant basis. Individual facility approval requires evaluation of every location that is designated as an approved supplier. Company-wide product approval allows greater flexibility in sourcing, but may not provide a great level of oversight of individual facilities. You may consider implementing a product approval program that differs based on risks. Ingredients with higher risks would require individual facility approval and low-risk ingredients would be covered under a company-wide blanket approval. This type of program would need to be clearly communicated to individual facilities to allow them to order materials from appropriate suppliers.

Another consideration for sourcing approval is verification that the material really is being produced at the facility you agreed to source it from. A supplier may be approved to supply an ingredient and then outsource portions of production to a co-packer that can produce the product more cost-effectively, or that is contracted during a crisis to maintain the supply so that business is not lost. Food safety requirements and programs of outsourced facilities must be verified to ensure that product safety is not compromised. There also must be a procedure that ensures transparency in communication of the source of the outsourced product. 

What is my contingency plan for an uninterrupted supply?

What happens if a fire or other event affects the ingredient supplier? Do you have multiple approved suppliers that can maintain an adequate supply? Do you have an emergency approval policy that allows you to temporarily purchase materials from unapproved suppliers until the approval process is complete? What additional considerations must be incorporated into this policy to ensure food safety from an untested source? All of these elements must be considered when developing programs to ensure that the ingredient supply chain is safe and uninterrupted.

What are the requirements for supplier specifications and letters of guarantee? 

Depending on the risk level of the ingredient supplied, you may choose to provide suppliers with specifications they must meet. In the case of commodities such as salt, sugar and flour, a company may choose to accept the product specification as provided by the supplier. But, ingredients with formulation changes may impact the food safety level and labeling of the finished product. Changes in specifications or formulas may add allergens or other unknown product hazards.

Your supplier program should include clear parameters for notification of changes to ingredient components or formulas for multi-component ingredients.
Make sure food contact packaging manufacturers are included in the specification and guarantee process. The supplier program should include procedures for labeling change notification and management of obsolete packaging materials.

Does my supplier have adequate prerequisite and food safety programs in place, and are they effectively implemented?

The extent to which you determine the level of compliance should be based on the ingredient risk level and the resources available for evaluation. Many large companies employ in-house auditors or use third-party auditors to assess their suppliers against company-specific inspection criteria. The frequency of inspection and the level of compliance are determined by the risk the ingredient presents. Smaller companies with limited resources may use simple supplier questionnaires to determine compliance to food safety requirements. In other cases, some companies use independent, third-party audit groups that have defined criteria and rating systems to assess ingredient suppliers.

Each company must identify which essential programs must be developed and implemented at their suppliers facilities. At a minimum, HACCP and the prerequisite programs that support HACCP implementation must be in place and effectively managed. Proof of compliance with specific regulatory requirements also must be mandated to ensure that a safe and legal product is being provided.

How will we monitor ingredients and packaging materials to assure that our specifications are met?

Supplier approval programs should determine how often product composition is monitored to ensure that the ingredient (or ingredients) listed meet the required specification or formula. This may help provide a level of assurance in situations where additives that are not part of specification are included.

What are the notification protocols when a supplier has a crisis in its own business? 

Crisis management plans must include customer notification when an event, such as a fire or ingredient recall, occurs at an ingredient supplier’s facility. Weekend, holiday and 24-hour contact information must be provided for the manufacturer and supplier because crises can happen at any time. Specific protocols must be in place for handling crisis events.

Is there a supplier feedback program? What are the defined steps if a supplier is not approved? 

Supplier feedback can take many forms depending on the resources and sophistication of the approval program. Many companies provide a supplier ranking that includes food safety compliance requirements, and assesses reliability of deliveries, damaged materials, incorrect orders or other defined parameters to measure the level of service provided. Other companies only require feedback from the ingredient supplier in the form of documented corrective actions when issues are identified. In any case, you must determine what steps are involved in supplier approval, rejection or probation. Probation or rejected status must be considered when food safety issues are identified at the ingredient supplier facility or when the product is contaminated or adulterated in any manner.

What are the considerations for non-ingredient suppliers? 

Vendors that provide other products or services to the facility, including lubricant suppliers, pest management companies, temporary or seasonal employment agencies, vending machine suppliers, equipment contractors, etc., also play a key role in the supply chain and impact food safety. Questions to consider for non-ingredient supplier may include:

• What approval documentation will you provide to guarantee that materials, such as lubricants used on food processing equipment, are food grade?
• Are pesticides and other chemicals used inside or outside the facility approved for usage at a food processing facility?
• Do you conduct employee background checks and verification to meet food defense requirements?
• What training is required and who will provide it prior to entering the facility?

The requirements that these suppliers meet are based on the level of access and potential impact they might have on the product.

CONCLUSION. Effective management and risk assessment will allow you to effectively identify and manage food safety and quality expectations for the ingredients, services and packaging materials supplied to your plant.

Careful consideration of the level of implementation of these requirements and allocation of the appropriate resources will assure effective implementation of the Supplier Program to reduce or eliminate issues and provide a safe and wholesome food product.

The author is Director of Product Development, AIB International.