Supply chains are not equipped to cope with disruptions at the magnitude recently experienced. Some “leading-class” supply chain practices, such as carrying less product on hand and utilizing the cheapest sources, no longer work. “Leading-class” must now embrace building strategic reserves and enabling diversity in food-safe sourcing.
Many food safety and quality groups do not have the available staffing and technology to be a proactive partner. Companies should engage in a concerted effort to explore, identify and implement the right balance of bold strategic choices to sustain business today and transform for relevance tomorrow.
Here are five key investment areas:
1. Begin with the end
Consumer expectations that drive purchases should be the first priority. Trends that have met the test of time include organic, gluten-free, peanut-free, fair trade and non-GMO products. These trends require compliant suppliers. Supplier vetting must also fundamentally validate food safety and quality expectations. Inputs from different suppliers are not interchangeable.
Conduct scenario planning to holistically assess supplier vulnerabilities. Expand scenarios beyond tier 1 suppliers. Leverage existing relationships within the supply chain, such as procurement, to identify external factors that increase supplier vulnerabilities such as COVID-19-related shutdowns or bankruptcy. Recognize the value of redundancy and geographic diversity over time to match risk tolerance. Invest in food safety and quality resources to meet the increased demands of supplier vetting, monitoring and assessment on a redundant and diversified supply chain.
2. Know the data
Although companies have a wealth of data, it is spread across divergent systems, spreadsheets, databases and even paper. Comprehending and managing the universe of data is the price of admission to both smart food safety and a smart supply chain.
Key data sources include recall history, inherent product risk, external supplier audits, company audits, quality checks, quality complaints, corrective action response times, certificate of analysis results and raw product microbial test results. Analysis of these sources provides insights into what is going on with suppliers.
By leveraging this operational data, the food safety and quality function can prevent incidents and anticipate undesirable states. Additionally, the food safety function can provide data-backed recommendations on supplier diversity, supplier requirements and supply-related investments.
3. Realize the potential of data
Businesses must be nimble to overcome contemporary hurdles. Decision-making and risk management are needed at lightning speed. Food businesses must enable their food safety and quality teams with integrated data to facilitate business fluidity.
While it may be common to work with disaggregated and antiquated systems, the implicit inefficiency slows procurement, supplier audits, product specification, nutrition and sustainability work streams relative to competitors with integrated solutions.
Integrated systems can embed various data sources and supplier management modules into a parent/child relationship where data sources automatically trigger notifications to key stakeholders and feed corrective and preventative action (CAPA) management. For example, digital temperature readings can be used to monitor and alert management to temperature abuse. The key is to recognize what is possible and choose efficient investments that provide the greatest long-term value to the business.
4. Challenge current processes and structures
Empower resources to use their advanced skill sets and eliminate wasted or misdirected efforts. Challenge current process design and execution. Encourage uniform data collection, scalable solutions and continual improvement on safety as well as efficiency. Differentiate activities that could be completed by machines or less-experienced personnel.
Consider the potential value of third-party outsourcing for activities such as aggregating and managing supplier information, conducting initial supplier evaluations, planning audits and training auditors to drive consistency and conducting audits on behalf of the company.
Logical and technology-enabled processes foster trust in the supplier relationship. An adversarial relationship with suppliers is often counterproductive. Better processes drive meaningful communication and collaboration toward resolving issues.