Implementing Best-in-Class Traceability

When asked about the business pressures that drive food and beverage manufacturers in product traceability initiatives and improvements, more than 60 percent cited two key factors: the need to ensure product quality and customer satisfaction and the need to comply with government regulatory requirements.

Such were the results of a study of more than 100 food and beverage companies conducted by the Aberdeen Group. The report, Food Safety and Traceability 2011, underwritten by InfinityQS, Plex Systems, and Mass Group, focuses on the companies’ use of traceability and food safety systems, as well as the impact of the Food Safety Modernization Act (FSMA).

The report grouped respondents into three categories based on company performance in percentage of products in compliance, complete and on-time shipments, overall equipment effectiveness, and response time to non-conforming shipments. The top 20 percent were categorized as Best in Class.

As such, the study found that Best-in-Class companies addressed the market pressures through strategic actions, business process capabilities, and technology enablers, including:

• building in compliance and traceability to production processes.
• improving visibility of quality across operations to deliver business processes.
• increasing responsiveness to non-conformances.
• improving the quality performance of critical suppliers.
• standardizing procedures for handling customer complaints.
• standardizing escalation procedures for quality, non-compliance, and recall events across the enterprise.
• performing mock recalls to improve and evaluate organizational response.
• ensuring all levels of the organization have visibility and defining responsibility in the case of a quality, non-compliance, or recall event.
• automating collection of traceability data.
• implementing technology for enterprise resource planning, supply chain management, traceability, manufacturing operations management, quality management system, traceability and genealogy, HACCP, corrective and preventive actions, supplier quality management, supply chain visibility, critical tracking events, audit management, and compliance management.

FSMA Impact. According to the research, 64 percent of respondents said that FSMA has had a measurable impact, whereas the others noted it as having no real impact. The greatest impacts noted were on increased documentation and record storage; an investment in document management and workflow systems; and more diligence with regard to suppliers.

Actions that manufacturers have taken to address these include increased:

• internal auditing and inspections.
• supplier certifications and inspections.
• investment in technology to improve auditing and documentation.
• documentation and record storage.

These actions are of particular importance when it is noted that only 42 percent of respondents have centralized electronic storage of documentation, and of these, 14 percent require manual access. In addition, 29 percent of respondents have “scattered” electronically stored records requiring manual access, while 29 percent still maintain documentation through paper records.

FSMA has also had some impact on risk management capabilities of the surveyed companies, with 64 percent noting that they felt the need to improve these. Such improvement has been made primarily through implementing a formal risk management and assessment process that continuously evaluates operations (43%) and performing informal periodic risk assessments and audits (21%).

Recommendations. Included in the Aberdeen Group report were recommendations for actions to help spur performance improvement, including:

• Implement a defined organizational structure, with specified responsibilities to improve reaction time and performance in the case of adverse events.
• Integrate regularly scheduled, internal audits for benchmarking and continuous improvement.
• Perform mock recalls to provide critical experience in the case of a real event.
• Prepare your organization to take advantage of industry standards for traceability, such as GSI. Then adopt and drive these standards into the organization and ecosystem to improve traceability beyond the facility.
• Automate the collection of traceability data; then drive further automation to error-proof the process and improve productivity.
• Increase the use of centralized, electronic storage of records. Include remote access to reduce the internal burden and workforce impact of audits and requests for documents.
• Increase the use of mobile tools, such as barcode and RFID readers, to fill in data gaps in areas that are inaccessible to wired technology.

As summarized in the report, the current industry environment, including the roll out of FSMA and the high profile of adverse events, is requiring that companies adapt and respond quickly to changing regulation and insurer risk-management requirements.

With Best-in-Class companies having reduced response to almost two hours, an expectation has been created that the entire industry can reduce response time as well. As such, the report stated, companies that continuously fail to improve their ability to handle adverse events will eventually answer to investors, consumers, and the regulatory agencies.

The full report by Kevin Prouty, Aberdeen Group research director, enterprise applications, is available at www.aberdeen.com.

The author is Editor of QA magazine. She can be reached at llupo@gie.net.