[Best Practices] Supplier Trends and Traceability

Purchasing trends illustrate an interesting paradox today, with consumer preferences tending toward locally grown produce while showing a taste for non-traditional global fare. But whether goods are purchased through a local provider or a global network, the traceability of the chain of supply from field to fork is facing ever-increasing demand not only by the end consumer, but also by regulators and customers throughout the chain.

Such trends were discussed in a number of sessions at the 10th Annual Food Safety and Security Summit in Washington, D.C., in March, and were displayed by suppliers in the exhibit hall.

In the workshop “Food Safety — A Quality Management Systems Approach,” Sargento Foods Vice President of Quality and Food Safety Systems Janet Raddatz discussed best practices used by Sargento for supplier measurement to help ensure quality in its cheeses. These measurements are used to assess not only external providers, but also its own five manufacturing locations.

Up to 35 percent of the cost of sales is directly related to the cost of poor quality, Raddatz said. And of this cost, 24 percent is directly related to the supplier base. Thus, it is important to measure the quality of incoming goods to reduce one’s own exposure to poor quality. But how to do so?

GOOD MEASURES. The measures by which suppliers are assessed must be carefully chosen to encourage those behaviors which the manufacturer is interested in achieving, Raddatz said. “You have to pick what you want to track because it has to add value,” she said. To determine if a measure is valuable, Sargento assesses it against four key variables. Good measures should be:

• Relevant. Is it a measure that is relevant to the quality of your product and the needs of the customer? Can it be understood by suppliers and is it applicable to your production?
• Accurate. Can it be observed rather than simply perceived? Quality itself is a perception, but elements that go into determining that quality should be observable and measureable, and acceptable values set.
• Trackable. Can it be measured over time? The metric should be constantly and consistently tracked so that an inadequate level can be noted immediately.
• Actionable. Can action be taken to rectify an issue? And, at what level will this action be taken? Actionable levels, actions to be taken and contingencies if specific levels are reached all should be pre-determined so that steps can be performed immediately should they become necessary.

As Raddatz then explained, measuring supplier quality not only provides for product quality but enables continuous improvement through:

• feedback to suppliers on their systems and processes;
• identification of supplier areas needing improvement;
• identification and reduction of non-value-added costs; and
• selection of suppliers based on best value, not necessarily lowest price.

SUPPLY TRACEABILITY. Enacting such measures enables a manufacturer to improve quality and traceability for its customers as well. And traceability is an area where the National Restaurant Association sees a need for improvement, said Chairman Richard Rivera in his keynote address.

Discussing the need to earn customers’ trust, Rivera said recalls caused 38 percent of consumers to stop purchasing certain foods in the last 12 months, including spinach, lettuce, bagged salads and beef. With restaurants purchasing about $200 billion in food each year, such statistics have a major impact on their business.

In general, Rivera said, a good job is being done in the setting of supplier standards, but there is a lack of complete and verifiable traceability of supplies. And particularly as global trade increases and imports become a greater percentage of overall food purchases, it is critical that this traceability be evident in all sectors, be unbroken across the chain and be thoroughly documented. “If it is at 100 percent,” he said, “we want evidence to prove it.”

SUPPLIER KNOWLEDGE. In a keynote address that focused on FDA and its state interactions, Capt. David Elder, FDA director of the Office of Enforcement with the Office of Regulatory Affairs, provided advice to the industry on actionable steps for food safety and security, including FDA’s ALERT acronym. Although the program is focused primarily on food defense, its first point is directed toward both safe and secure sources of supply:

• How do you assure that the supplies and ingredients you use are from safe and secure sources?
• How do you look after the security of the products and ingredients in your facility?
• What do you know about your employees and people coming in and out of your facility?
• Could you provide reports about the security of your products while under your control?
• What do you do and who do you notify if you have a threat or issue at your facility, including suspicious behavior?

“I can’t overemphasize how important it is to know your suppliers,” Elder said, explaining that most of the issues FDA sees are due to inadequacies in this area. And in order to recognize and be prepared for an emergency situation, he said, it is important that processors know the “signals” and practice for all aspects of an emergency situation including communication. “Time is the enemy in these situations,” he said. It is critical that you get it right the first time and communicate promptly with regulators and customers.

In words relevant to action across the industry, Elder cited remarks from FDA’s assistant commissioner for food protection, Dr. David Acheson, on implementing the agency’s Food Protection Plan: “The starting gun has sounded. It’s time to get started and implement everything we said we’d be doing.”