The food industry is a constantly evolving industry that faces challenges posed by increasing globalisation, regulation and competition. Supply chain management is an integral part of most businesses, essential to their success and customer satisfaction. It is the efficient management of end-to-end process from a design of the product or service to the time when it is sold, consumed and then disposed of by the consumer.
Interest in supply chain management (SCM) has intensified as a result of global competition, new market and product development, as well as significant advances in information and communication technology that facilitates a more efficient exchange of huge volumes of data to ensure end to end chain transparency and visibility.
Food demand and supply have long crossed local and national borders to become international processes. At the same time, focus has been drawn to cross-border flows of livestock and food products that rely on the formation of international collaborations and alliances in a vertical or horizontal orientation.
SCM is defined as the integrated planning, coordination and control of business processes and activities in the supply chain to deliver superior consumer value at less cost to supply chains, while also satisfying the requirements of stakeholders. As the ultimate aim of SCM is to deliver value for customers, the concept of value-added activity goes beyond financial gain and performance to encompass attributes of social and environmental performance. The latter are closely associated with the qualitative attributes of raw materials used, final products and resources utilised by companies to produce those (social and environmental policies).
Acceptance of the end product by consumers is a measure of supply chain performance and is based on a combination of key quality attributes as well as availability, price, and food safety. Optimisation of those parameters that drive added value can only be achieved through collaboration and appropriate coordination across the whole supply network.
Gathering, processing, handling and communicating the right information is a prerequisite to effective supply risk management and control. A supply chain risk management solution should therefore consist of two highly interconnected elements:
- Ability to gather and process relevant information with the aim of:
- Identifying supply chain risks, threats and vulnerabilities
- Developing a mitigation plan and managing the necessary changes for effective implementation
- Triggering communication and active engagement amongst stakeholders across the supply chain towards a common goal; the provision of traceable and transparent information that would promote food safety
- Use of an information technology control and management tool that is:
- Able to store, monitor, manage and report/communicate information
- Secure to use and can guarantee full traceability
- User friendly and reliable
- Constantly monitored and maintained to ensure continuous functionality, and
- Regularly updated/configured to ensure it meets changing needs
The ability to track a product from farm to fork is a complicated process, especially so given the number of processing cycles a product might need to go through and the potential complexity of the product recipe itself. The latter is often a combination of a number of different ingredients sourced around the world and mixed together at different stages of the supply chain. The requirement for almost instant access to such information, as and when required, means that manual traceability systems become less and less acceptable as they are considered to be much more susceptible to error at best and fraud at worst.
There are a number of reasons why companies would adopt a traceability system, either internal or chain traceability. Literature further suggests ten main drivers of food traceability:
- Production optimisation
- Chain communication
- Competitive advantages
- Food safety
- Bioterrorist threats
Companies would voluntarily adopt a traceability system for different reasons, for example as a means to identify alternative sources of raw ingredients, or to comply with international trading regulations etc. Adoption of a traceability system as a direct means to improve food safety can be less clear given the fact that unlike HACCP, for example, or a number of pathogen reduction approaches such as pasteurisation, preservation etc. traceability does not directly improve the efficacy of a production process. Instead, it is an information generation mechanism which although it may not be able to reduce the probability of a food safety crisis in isolation, it can promote active engagement and facilitate contractual agreements amongst different stakeholders to promote food safety across the food chain.
Cases of fraudulent intentional contamination, unintentional food contamination and food counterfeiting are amongst the key driving forces for the adoption of effective traceability systems able to trace food and food ingredients used in different products, through different stages of production, processing and distribution. Such systems, which are able to combat fraudulent practices and control adulteration, can be very important for economic and cultural but also religious reasons. An additional benefit of effective food traceability systems involves the improvement in food crisis management through access to integrated data covering:
- The origin of food/feed and ingredients
- Processing at all stages in the supply chain
- Resources used, such as transport equipment, people and machinery.
Amongst other things, the availability of a fit-for-purpose traceability system can facilitate the targeted withdrawal and/or recall of contaminated products therefore preventing the significant economic impact of a ‘blanket product withdrawal/recall’ and the subsequent damage to individual operators, an entire food sector and consumer confidence.
Food Supply Chain Management Survey Underway
Evolution in supply chain management industry practices has been the focus of an industry-wide survey conducted by SGS. The results of the survey will be presented at the SGS-sponsored breakfast session titled “Managing Supply Chain Risks – How Has the Food Industry Evolved in Recent Years” that will take place at the 2019 GFSI Conference (Thursday February 28, 2019 at 8:00 am). The session will be moderated by Donna Brown Crockart, SGS AFL business manager in South Africa and speakers include Natalie Dyenson, MPH, Vice President, Food Safety & Quality, Dole Food Company, Inc. and Christine Summers, AGMM Product Safety/Quality Assurance/Environmental Compliance, Costco.
In this session, participants will hear perspectives and practices of key professionals on assessing the risks and vulnerabilities of their supply chains. The extent as to which regulations help mitigate risks and drive food safety culture will be presented along with a discussion on the latest methods for identifying emerging risks and minimising their impact.
This post was written and contributed by:
Global 2nd Party/Customised Solutions Manager