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Lower Risk, Boost Safety
Use vendor certification and continuous process improvement to manage your supply chain safety and quality
by Jeffery L. Cawley
From ground beef to spinach to adulterated ingredients, the food industry has seen the huge downside of supply chain safety and quality failures. Food processors are faced with the continuing challenges of maximizing food safety while reducing production costs by improving throughput, product yields, and process efficiencies. Part of the risk equation is that the food processing industry has become dependent upon extended supply chains using multiple vendors.
One risk reduction strategy is to improve the performance of these supply chains. In addition to conventional audit programs, many customers mandate that their suppliers implement Statistical Process Control (SPC) programs. These programs improve food quality and safety while decreasing purchasing costs.
Suppliers and customers won’t see financial benefits from SPC implementation if suppliers feel that all they are required to do is to ship control charts and histograms with the raw product. When all participants in the supply chain actively embrace SPC, however, there can be attractive financial and risk reduction benefits.
Supply chain performance represents the ability of the supplier to meet customer contract requirements over the life of the contract. Overall supplier performance ranking is based on factors that include ability to meet quality and food safety requirements, deliverability, communication, and services.
Safety for a World-Class System
The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) has developed one of the most effective preferred vendor and supply chain quality management systems for the purchase of ground beef for the National School Lunch Program (NSLP). The AMS has incorporated best practices from other industries and merged these with the need to guarantee food safety to produce a world-class system. This system is described in the AMS Technical Requirements Schedule (TRS)—GB-2006, For USDA Purchases of Ground Beef Items, Frozen (www.ams.usda.gov/lscp/beef/LSP-SB-TRS-GB-O6-sco% 205-12-06%20FINAL.pdf).
Prior to supplying boneless beef destined for the USDA, the boneless beef supplier must submit a documented quality control program within the contractor’s technical proposal and receive a satisfactory onsite capability assessment by the Audit, Review, and Compliance (ARC) branch. The quality control program must specifically address the management of microbial data to comply with the AMS Process Requirements Flow Chart and the following descriptions.
The contractor’s technical proposal must describe a process plan with a documented quality control program that includes procedures, records, forms, and so on—all demonstrating conformance to the requirements of the specification TRS GB-2006. The successful vendor has an established quality assurance/quality control system that includes staff training and certification, incorporates process monitoring with retrievable data, uses quantitative methods such as SPC and process capability analysis, and demonstrates process stability and capability to meet specifications.
After acceptance, the vendor provides AMS with continuing SPC-based quality reporting and demonstrates that it maintains a continuous improvement program. The goal is not just to receive documentation but also to have the vendor demonstrate that it is actively managing and improving its processes and contributing to reducing the risks of noncompliance in the supply chain. The successful vendor demonstrates the characteristics of a stable and capable process with the ability to deliver timely alerts regarding problems.
The process-based model and awareness make up the core of the system. This model implies knowledge of the history of vendor behavior and the statistically demonstrated confidence to extrapolate performance while maintaining a constant check on process performance and audit. The primary supply chain analytics reporting tools are: Certificate of Analysis, which provides a representative value; Control Chart, which provides a measure of process stability and predictability; and Process Capability Report, which indicates how well the vendor can meet specifications. The results of this program were reported in Food Quality, Oct.-Nov. 2005 in the article “School Food Logistics: A look at supply chain quality management in the USDA’s AMS National School Lunch Program” (www.foodquality.com/mag/09012005/fq_09 012005_FS1.htm).
Improvement in Ground Beef SAFETY, QUALITY
Since the initial specification in 2003, the AMS supply chain quality system has achieved significant improvement in ground beef safety and quality. The Salmonella incidence rate has been reduced from 5.5% to 1.3% and the target fat content moved from 22% to 15%. The lowest Salmonella incidence rate was recorded at 0.9% for 2005-2006. The higher 1.3% rate for the last contract year was largely due to events at one producer. Continuous monitoring and analysis ensured that the problems were quickly detected and that corrective measures were taken. This response demonstrates the value of close monitoring and of having appropriate response measures defined.
This situation is similar to the timely correction that John Surak, PhD, principal, Surak and Associates (Clemson, S.C.), Syed Hussain, PhD, director of product development, product development and technical services, Butterball Turkey Company, (Downers Grove, Ill.), and the author observed at a Butterball turkey processing facility with an active SPC monitoring of Hazard Analysis and Critical Control Point (HACCP) and reported in Food Quality, May 1998, Integrating HACCP and SPC. The integration of statistically based process management, inspection, and audit clearly provides the means to increase process compliance and rapidly correct any process failures (www.nwasoft.com/press/mag_haccp.htm).
Under the AMS-administered program, vendors must demonstrate their capability to meet contract specifications and provide data and SPC deliverables with each test lot. Silliker Inc. (Homewood, Ill.), has the current contract for providing microbiological testing and nutrition services for ground beef to support supply chain quality in the NSLP. To accomplish this, Silliker employs USDA-approved cultural and rapid test methodologies and uses Northwest Analytical Inc.’s (NWA; Portland, Ore.) Quality Analyst to provide data and SPC charts to AMS and ground beef suppliers.
One element of making this safety and quality program work properly has been the use of a third party laboratory and audit services that serve as a source of monitoring data. Because data are provided to both vendor and customer, it provides a common basis for discussion and conflict resolution. Delivering SPC data and charting with NSLP reports, according to Michele Smoot, PhD, director of microbiology for Silliker Inc., has proved to be an important improvement to normal reporting packages.
“In today’s food industry, timely information is integral in proactively managing product safety and quality,” says Dr. Smoot. “These added report capabilities allow ground beef vendors to view their analytical data over specified time frames, detect processing trends of concern, and, if needed, take corrective action.”
AMS to Develop Market Capability
The development and success of the AMS program in the past decade has benefited other companies within the meat and poultry industry. One example is Westland Meats (Chico, Calif.). It spent considerable time and effort to develop the AMS product, but doing so has enabled Westland to ratchet up to a higher level of performance. The in-house laboratory is AOAC certified and ensures that all products are produced in a consistently safe and sanitized environment. Westland has implemented SPC, and all staff members have received basic quality training. For each work cell, two additional people receive extra quality control training.
Westland constantly audits itself and tightens its process management with SPC. This simplifies dealing with the third-party audits that cover all activities from receiving cattle to shipping product. The results are shared with all staff, and the audits are used as training opportunities for employees. Using both the internal and external audits as a force for training and growth is part of the continuous improvement model.
This systematic approach to developing staff skills and improving plant processes is applied to everything Westland does. Stan Mendell, Westland’s plant manager, believes in hands-on plant management and sees his major job as training and coaching. “It is important to show employees how well they do, because it’s the people who make a success,” he says.
In addition to developing a quality organization, Westland works closely with the USDA staff. “All the government agents in the school lunch program have been willing to help. They want us to be a capable vendor and focus on success,” says Mendell.
Such interaction is a characteristic of all successful safety/ quality management systems in which the vendor/customer collaboration enables the vendor to increase production sophistication and become more effective in the marketplace. “Developing our quality systems to meet the USDA requirements and having a demonstrated record of quality performance has also helped us become preferred vendors with our commercial accounts where we supply ground beef to several fast-food restaurants,” says Mendell. “By making employees aware of our customers and their needs, we have increased our success.”
Adopting Lessons from NSLP’s Program
The AMS first proposed the process management-based NSLP safety and quality program in 2000, and it was finally adopted for school year 2003-04. Many in food distribution and supply chain management have observed the effort and decided what elements of the program were beneficial for them.
One example is Sysco Corp., Houston, Texas, the market leader in North American foodservice distribution and a company recognized for the quality of its historically audit-based quality assurance system. The performance of the AMS vendor and supply chain management system has been a significant impetus for Sysco to add SPC and process management methods to its own program for meat vendors.
Sysco requires its vendors to demonstrate that they have in place and deliver SPC and related quality deliverables with their product. In addition, Sysco has expanded its in-house SPC program to support supply chain management.
Enterprise-wide Process Quality Management
The poultry processor Pilgrim’s Pride, Pittsburg, Texas, has developed its system based on the Systems Applications and Products in Data Processing (SAP) enterprise software, coupled with NWA Quality Analyst to provide SPC and manufacturing analytics reporting. Part of the challenge has involved integrating several acquisitions into the system. Developing a standard enterprise system supported by corporate IT has made the process more feasible.
Pilgrim’s Pride uses the system to establish the conditions for success by developing capability-based specifications that enable it to deliver supplier performance. R&D develops achievable specifications based on production data during pilot runs. Active, collaborative work between vendor and customer make the system workable.
The manufacturing and supply chain quality decision support system involves integrated data collection, management, analysis, and reporting to enable capable supplier production performance. Data is transformed into process information through analysis, which forms the basis for decision making and action.
The system uses standard commercial enterprise software. SAP is used to collect and manage the production data, which is fed to NWA Quality Analyst for analysis, reporting, and visualization. Pilgrim’s Pride has developed an in-house dashboard and Web site design that delivers the appropriate role-specific reports and visualization to the staff.
The system handles approximately 15,000 data points per day. The entire system, ranging from initial data collection to final analytics reporting, operates in a Citrix environment. The SAP shop floor server is configured to pull data by characteristic and feed it to the analytics software through an Open DataBase Connectivity (ODBC) link. The quality software is configured to automate specific reporting. The system is generating a large number of histograms, mostly focused on weights and portion control. A typical parameter that is tracked is batter/breading pick-up.
Much like the in-house dashboards that provide status and production management information to the staff, the external Web site is used for customer lot acceptance and to establish the perception of Pilgrim’s competence as a vendor. For example, when a new product was recently delivered to a restaurant chain, the Pilgrim’s staff could irrefutably demonstrate that it had scored a 100.
The enterprise system enables Pilgrim’s Pride to effectively use its production data, analyzed with SPC and process capability, as a tool to demonstrate and to manage compliance. This in-house discipline and external demonstration of capability is a significant contributor to Pilgrim’s Pride’s status as a major poultry supplier to fast food restaurants, casual dining restaurants, and frozen entrée producers.
As the food-processing industry has become dependent on extended supply chains with multiple vendors, risk and quality management has become critical. To reduce risk and produce dependable results, processors must formalize vendor certification, process monitoring, and enforce continuous process improvement in their supply chains.
The systems include accountable data collection, analysis, and supply chain-wide reporting. This reporting should be role specific to maximize usefulness and support timely and effective decision making.
These examples illustrate how well-designed and implemented supply chain safety and quality management systems can reduce risk and improve performance and profitability.
Cawley is vice president of market development at Northwest Analytical, Inc., Portland, Ore. Contact him at 503-224-7727 or firstname.lastname@example.org.