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From: Food Quality & Safety magazine, December/January 2008

Protect the Food Supply Chain

The global supply chain makes an already byzantine food safety and quality system more challenging

by John G. Surak, Phd, Jeffery L. Cawley and Mark Gavoor

The past year has not been a good one for food safety. There have been a number of high profile recalls traced to imported tainted ingredients and contaminated seafood, domestically produced fresh vegetables, and ground beef contaminated with E. coli O517:H7. Imported consumer items, such as toys and toothpaste, have also been recalled. Many of the food recalls have been linked to safety and quality problems in the supply chain, and media attention has focused mostly on the international supply.

Imported food benefits both the consumer and the food processor. Sourcing products or ingredients internationally provides cost savings and the ability to source products all year long. On the other hand, the global supply chain adds complexity to an already byzantine system of food safety, quality, and logistics.

When supply chain issues occur, the classic response is to tighten the specifications or increase incoming inspections, but because they do not address the root cause, both of these strategies create problems. Tightening specifications tends to increase adversarial relations between the customer and the supplier. The supplier questions why the specifications are being tightened when all quality assurance (QA) tests indicate that the product in question meets specifications. The customer may respond by pointing out that significant manufacturing problems are occurring on the plant floor or that QA tests indicate that the product is not meeting specifications. A follow-up to the customer’s response is an increase in quality levels, which will result in higher costs for the product.

A short-term correction may involve increasing the level of inspection and potentially adding a step to remove unacceptable product, thus ensuring that the incoming product meets purchasing specifications. Sometimes, this short-term correction becomes a long-term strategy. Inspecting and sorting do not comprise an effective long-term strategy, because they do not mitigate the root cause of the problem. In addition, this solution is costly and does not add quality to the lot. Even if incoming inspection is used as part of the receiving process, the processor may need to add in-process inspection and sorting steps during production to ensure that the final product meets end-product specifications.

If an incoming lot fails the inspection process, the plant must decide what to do with the lot. Business questions that arise include whether to return the lot or to accept it with concession because of the need to meet the production schedule. This strategy may have unintended consequences. Repeated concessions can erode the specifications, essentially diminishing them to an unacceptable level. Once this occurs, it is difficult to return to the written specifications.

Another approach is 100% inspection, but this is rarely effective in identifying and removing all unacceptable product. Other problems occur if the defect is at very low levels. When this happens, large samples must be taken and analyzed for the QA test to be statistically relevant. For example, Salmonella enteritidis is present in eggs at an incidence level of one per 25,000 eggs. If a company wants to have a statistically based inspection plan that provides 90% confidence that a given lot does not contain any S. enteritidis, then a sampling program must be developed that randomly selects 2,000 eggs, and a testing program must have the ability to detect one cell of S. enteritidis in the 2,000-egg sample.

Build in Safety and Quality

The best solution is to build food safety and quality into the production and manufacturing processes. The most effective food safety/quality design process uses the principles of hazard analysis that are a central part of hazard analysis and critical control points (HACCP). HACCP has worked well for a number of years. For example, the United States Department of Agriculture’s (USDA) Food Safety and Inspection Service reports that between 2003 and 2006 there was a steady decline in the incidence of E. coli O517:H7 levels in raw ground beef. As a result, major U.S. food processors and food service companies require that their suppliers implement HACCP plans and good manufacturing practices and/or good agricultural practices.

Like all management systems, a HACCP system needs to be continually improved. If this does not happen, the system may gradually lose effectiveness. One way to avoid this pitfall is to manage food safety and quality as a strategic issue. As companies adopt this perspective, senior management moves from ensuring food safety and quality by managing each crisis to managing the actual food safety and quality risks. Benchmark companies, such as Jack in the Box, use this approach as a normal part of doing business. This can be done by applying the principles of hazard assessment to analyze all business processes rather than limiting hazard analysis to just food safety issues. Senior management has four basic strategies to deal with risk:

  1. Accept the risk;
  2. Avoid the risk;
  3. Transfer the risk; and
  4. Mitigate the risk.

Risks are assessed in terms of the likelihood of an incident occurring and the severity of the incident. When the probability of occurrence and the severity of the risk are low, the food processor may elect to accept the risk. As the probability of occurrence and/or severity of the risk increases, the food processor needs to manage the risk in the most cost-effective manner. Senior management needs to reassess the risk periodically to ensure that the risk level has not changed and to ensure that new risks have not appeared.

Controlling a biological hazard through the use of prerequisite programs is an example of avoiding a hazard. For example, cleaning and sanitation programs may be used as the control mechanism for some microbial hazards. If this strategy is to remain effective, however, verification programs need to monitor it. Verification programs can include visual pre-op inspections, ATP (adenosine triphosphate) phosphohydrolase swabs, and/or microbial environmental swabs. A critical aspect of the verification program is that it must define the actions that will be taken in response to negative signals or trends.

For example, Milkco, Inc., a dairy headquartered in Asheville, N.C., packages fluid milk products for small- to medium-size businesses. To meet contractual requirements, the dairy subcontracts delivery of its products to a trucking firm that is responsible for providing trucks and drivers at times specified by Milkco. This is a two-fold strategy: The dairy avoids the risk inherent in hiring its own drivers and shipping and maintaining a fleet of delivery vehicles, thus transferring the risks to the trucking firm. But transferring risk does not absolve the food processor from the risk. Indeed, if a processor transfers risk to another firm, the processor should have verification procedures that ensure the risk is being controlled. The classic method of dealing with food safety and quality risks is to mitigate risk by using steps to ensure that the risk does not occur or is eliminated or reduced to an acceptable level. This is the typical risk strategy of a HACCP plan.

A Strategic Initiative

When food processors elevate food safety and quality to a strategic level, the result is improved relations in the supply chain. Customers typically develop a system to assess the effectiveness of the suppliers in meeting key requirements, which include several key items:

Food safety and quality requirements:

Supplier communications, which include reliability of logistics communications as well as those regarding other business or quality issues such as effectiveness of process improvements and corrective actions;

  • Logistical issues, including response to lead times, timeliness, and accuracy of advanced shipping notices. Delivery accuracy includes the correct product, the correct amount of product, timeliness, and material handling and identification.

A good supplier assessment process system focuses on the following points:

  • Clearly defined product specifications and other important requirements;
  • Effective communication of the specifications and requirements. This includes a feedback system that informs the supplier on how they are meeting the requirements;
  • Effective systems to measure conformance to the specifications and requirements; and
  • An effective accountability system that takes effect when requirements are not met.

Problems arise when shortcuts are taken on any one of the four points.

Effective communication is critical for success in managing the supply chain. Communications indicate that the supplier knows and understands the intended and implied requirements for the product. For critical ingredients, this is effectively accomplished through personal, face-to-face discussions between the supplier and the customer. This allows the supplier to understand current and future requirements.

This strategy is not intended to eliminate the potential use of third-party audits and/or certification. The audits augment the efficacy of supplier visits; they also provide a general picture of the status of a number of systems. They are not intended to transfer to a third party the risk of verifying that the supplier is meeting specifications. Customer visits can provide an assessment of a supplier’s current ability to handle the process, including the supplier’s use of systems like statistical process control (SPC) to improve quality while reducing process and product variation.

International Challenges

Supplier visits get more difficult when products are sourced internationally, because international travel is costly and time consuming. International supplier visits are critical, however, because of the need to communicate across language and cultural barriers. Most international suppliers want to do the correct job, but they need to know and understand the requirements.

Visits to the customer by the supplier can be equally important in ensuring effective communication in the supply chain. The visits allow the supplier to understand how the product can become familiar to the customer. Many times, quick service restaurants source the same product from multiple contract packagers. One challenge that arises for the restaurant is to ensure that the product has the same sensory characteristics regardless of the supplier or the plant. Periodic meetings with all suppliers present an effective strategy to communicate the intended requirements for a product and to provide feedback to a supplier on the product’s performance. In addition, these meetings provide a forum to discuss future changes in requirements.

A recurring challenge is selecting a supplier that can provide product that meets specification not just initially but also on a long-term basis. Over time, the relationship changes. Enforced specifications can broaden, or changes in QA methods can lead to disputes as to whether a specific lot of product is in or out of specification. If business opportunity grows, the supplier may not have the capacity to meet the new market demands, and product quality may decline.

Another problem may be the slow deterioration of mandated QA systems. A customer may require that a supplier implement SPC. The initial system is implemented, with resources spent on training, software, and hardware. If the SPC is not sustained by linking to continuous improvement, the SPC may become a system to provide “parts with the charts” or the means to fulfill a customer documentation requirement. As a result, the supplier is reluctant to provide the resources needed to maintain the system at a high degree of efficiency. If the SPC system is linked to continuous improvement, the supplier will realize numerous benefits, including improved quality and reduced operation costs through elimination of waste.

In a critical part of supply chain management, the customer develops a system that accurately monitors critical parameters of the suppliers’ processes and/or products. This can be done using the tools of SPC. The Agricultural Marketing Service (AMS) of the USDA developed this type of program to purchase ground beef for the school food lunch program. The AMS program is linked to an accountability system. When the control charts indicate negative trends, the meat grinder must submit a corrective action plan that identifies the root cause of the problem and a strategy to prevent recurrence. If the problems are not resolved, the grinder can be placed on conditional or even suspended status. The final step makes the grinder ineligible to sell ground beef to the government program. This overall supply chain management system improved the quality and safety of the ground beef that is provided to the United States school system.

Don’t Manage by Crisis

Food processors should consider making food safety and quality a strategic issue rather than managing by crisis. Managing strategically creates the correct culture for the food processor. One potential option requires that suppliers implement a formal food safety management system. There are a number of descriptions of the requirements for management systems, including the International Organization for Standardization 22000 requirements for any organization in the food chain. There are also private standards such as the Grocery Manufacturers Association SAFE audits, the Food Marketing Institute’s Safe Quality Food 2000 audits, and British Retail Consortium audits.

The supply chain management system should use a process approach that incorporates the following:

  • Identifying key food safety, quality, and logistic requirements;
  • Ensuring effective communication of requirements;
  • Using SPC to measure conformance to requirements;
  • Linking SPC requirements to continuous improvement so suppliers can improve quality and reduce operational costs;
  • Using trend analysis to mitigate problems before they occur in the supply chain; and
  • Ensuring that the supply chain management process includes a strong accountability system.

A number of professional organizations provide training and assistance to food processors that want to implement management systems. For example, organizations such as the American Society for Quality (ASQ) provide short courses in conducting process audits of management systems. In addition, ASQ offers a number of certifications, including the Certified HACCP Auditor and the Certified Six Sigma Black Belt. By pursuing these certifications, professionals in the food industry can be sure of an understanding of the body of knowledge that is necessary to manage the modern quality and food safety assurance systems.

Surak, Cawley, and Gavoor are all members of the American Society for Quality’s Food, Drug, and Cosmetic Division. Surak is a food safety consultant at Surak and Associates; contact him at (854) 506-2190 or Cawley is vice president of market development at Northwest Analytical, Inc.; contact him at (503) 224-7727 or Gavoor is vice president of the supply chain office products division at Newell Rubbermaid; contact him at



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