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From: Food Quality & Safety magazine, August/September 2010

The Peanut Butter and Pistachio Paradox

Ensuring quality in the food manufacturing supply chain

by Mike Jovanis

We’ve all heard the reports. “Peanut Recall Sparks Large-Scale Food Safety Concerns.” “Pistachios-Salmonella Link Probed.” “Fears of Tainted Spinach Sweep the Nation.”

The good news from all this is that the United States Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) are clamping down on food quality standards and regulations to help protect the American people.

One example is the FDA’s 2007 Food Protection Plan, which, according to the FDA, seeks to “… address the changes in food sources, production, and consumption that we face in today’s world … to protect the nation’s food supply from both unintentional contamination and deliberate attack … [through] prevention first, then intervention, and finally, response.”

The government’s efforts are only part of the battle, however. The food manufacturers themselves carry an even heavier burden. It may surprise some to know that over 70% of food and beverage companies in the United States use Excel spreadsheets to capture and track quality data from their complex food manufacturing operations. Over 50% still use paper, according to AMR Research in its March 2009 “Enterprise Quality Management in Food & Beverage” research findings. Furthermore, AMR also found that 23% of companies acquire their manufacturing process quality data manually.

In a country that processes over 15% of the world’s meat, these figures are frightening. How can the public be kept safe from food contaminants with these minimal manufacturing quality management standards? The short answer is, we can’t.

The other side of this equation is the business viability of the food and beverage manufacturers. A single product recall can cost one of these companies millions of dollars in lost inventory and orders, while severely tarnishing their brand image. In light of the dire economic challenges we face today, with customer loyalty rising and dropping along with the cost of a gallon of milk, a recall can be the kiss of death for a manufacturer.

Solutions Are Available

Fortunately, there are solutions that can automate, integrate, and streamline both manufacturing quality and supplier quality processes. Many companies use enterprise software applications at various levels of the manufacturing operation to capture quality control and safety data. These manufacturing intelligence software solutions include enterprise resource planning (ERP), manufacturing operations management (MOM), and manufacturing execution systems (MES), which often involve intensive and costly customization efforts to fit the quality and compliance requirements of the food industry.

Other companies, however, are realizing that there are dedicated software solutions built to immediately address reconciliation of quality issues across the supply chain. Enterprise quality management systems (EQMS) are beginning to replace homegrown, manual, and isolated tools that require extensive customization to manage quality processes for which they are not specifically designed. Furthermore, EQMS systems can be used to implement processes and escalation procedures that essentially drive any centralized quality improvements.

Deploying an EQMS enables companies to seamlessly integrate data from many organizational silos and applications, including ERP, MES, and MOM, to provide a single view of all quality-related processes in manufacturing. With such a comprehensive system in place at the corporate level, manufacturers can achieve better regulatory compliance, reduced manufacturing cost, greater production efficiency, improved customer service, and more. In turn, consumers enjoy safer food and beverage consumption and gain added protection from potential quality issues.

This article will further discuss enterprise quality management as it is employed today—and the value this approach can bring to a troubling scenario.

Enterprise quality management software can track and manage complaints and related investigations and corrective actions.
click for large version
Enterprise quality management software can track and manage complaints and related investigations and corrective actions.

Manufacturers’ Concerns

According to the AMR research referenced above, food and beverage manufacturers cite the need to ensure customer satisfaction and reduce the cost of quality as the two primary pressures driving food safety initiatives. At the executive level in particular, there is significant concern about increasing both the predictability and the reliability of the product supply on the shelf. With so many suppliers and partners typically involved in a manufacturer’s development and procurement of its food products, careful management of the supply chain network is a business imperative.

Another key factor that dramatically affects a manufacturer’s ability to ensure product quality, according to AMR’s findings, is a lack of tools that can analyze and measure the complex data relationships between the multiple sources, systems, and workflows in the food and beverage supply chain. The fallout from this deficiency can be poor food quality, lost revenue due to insufficient product supply on the shelves, and even product recall, potentially disastrous in terms of financial and brand impact.

A quality management system implemented in such a complex supply chain environment can not only streamline and tighten up a manufacturer’s own product operation but can also help foster better supplier collaboration, translating into benefits for all parties involved, including the consumer.

A score card function can help companies track and manage supplier qualifications, non-conformances, and corrective actions.
click for large version
A score card function can help companies track and manage supplier qualifications, non-conformances, and corrective actions.

Centralized Enterprise Quality Management

A centralized approach to enterprise quality management can help a food or beverage manufacturer manage and track goods, information, and resources across the enterprise and the supply chain, while adhering to stringent quality standards. These systems can provide a global view of quality management—across all facilities, suppliers, and departments—as well as environmental health and safety. In addition, centralized and consolidated tracking, workflow management, and reporting of all critical quality processes provides a production environment in which the right information and analytical output are available to those who need them when they need them.

There are a number of other critical functions a centralized and integrated enterprise quality management solution should provide, including:

  • Supporting both internal and external auditing of a manufacturer’s entire supply chain as well as tracking and management of supplier qualifications, non-conformances, and corrective actions for a holistic approach to overall supplier quality management;
  • Automated tracking and verification of the manufacturer’s compliance with industry regulations to avoid non-compliance penalties and minimize risk;
  • Inspection management of materials that are received, including tracking inspection results, item received date, material information, and quantity, to eliminate product quality issues before they can become problematic; and
  • Tracking and managing complaints and related investigations and corrective actions to help ensure customer satisfaction and ensure product safety.

No company can afford to let its guard down when it comes to product quality—especially in the food and beverage industry. Unlike the highly regulated pharmaceutical industry, food and beverage enforcement of regulations just

isn’t that strict; the real burden is on the product manufacturers themselves. Their products are not luxuries but are consumed by regular people each and every day, making the need for food and beverage safety not just a residual business luxury, but a moral company imperative.

By implementing a centralized, integrated, and holistic enterprise quality management system in the production environment and supplier management function, companies can help to ensure that safer food reaches the shelves. They will also benefit as organizations and receive tangible results that include increased revenue, heightened brand loyalty, happier customers, improved regulatory compliance, and much more.

By clamping down on product quality and food safety as an industry, we can start to put an end to the troubling daily headlines we see concerning food contamination, product recalls, failing manufacturers, and consumer health issues.

Jovanis is vice president of product management at Sparta Systems. Reach him at mjovanis@sparta-systems.com or (732) 203-0400.

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