Food safety is a priority for every food company, no matter how large or small the firm may be, or where the provider fits into the supply chain. When tainted foods become public knowledge, failure to meet safety standards can literally put a company out of business.
But no food company works in isolation. Even if the firm has excellent safety processes internally, it’s still at risk if any tainted foods come from outside providers.
Consequently, a number of certifications have been established worldwide to ensure food companies can prove they have ongoing food safety processes in place. These certifications may seem challenging to implement at first, but certified safety processes are more than worth the effort—especially in the food industry.
Three common scenarios are the reasons why.
- The potential for a food recall is a significant risk for every food company.
- Food safety compliance audits can be expensive, especially if the company’s quality controls and reporting processes are deemed inadequate.
- And most importantly, unlike the majority of manufacturing companies, spoilage and contamination are very real concerns for food companies.
In the scramble to meet compliance standards, however, the ability to view certification as an opportunity to improve production and profitability often gets lost in the shuffle. The good news is that all compliance schemes can enhance a company’s ability to achieve key performance indicators (KPIs) and business goals—not just protect it from safety violations.
The Global Food Safety Initiative (GFSI) is a perfect example of how, when customized to meet a company’s own specific needs, certified safety compliance can serve as a major catalyst to increase production and profitability.
GFSI is an industry-driven collaborative platform to promote food safety on a global scale. Consider for a moment what globally certified safety compliance offers a food company from a bottom-line perspective:
- It mitigates risk by confirming the ability to produce the safest food possible;
- It establishes a consistent food-safety management system which, in turn, streamlines productivity and avoids unnecessary waste;
- Third-party inspectors use GFSI schemes as an agreed-upon standard for judging food safety;
- It simplifies migration to new regulations such as the FDA’s Food Safety Modernization Act, or FSMA; and
- Last but not least, proof of compliance makes a company far more competitive, whether it’s a leading industry brand or a small, regional operation.
This doesn’t mean that all GFSI implementation programs are created (and managed) equally. Nor does it mean that one GFSI solution is as effective as another. The difference lies in the company’s ability to integrate GFSI into real-time processes that drive its primary KPIs.
How to Leverage GFSI as an Active Growth Engine
GFSI compliance is straightforward. It requires food companies to do three things transparently.
- Say what you’re going to do to ensure quality and safety.
- Do what you say you’re going to do.
- And finally…prove it.
The optimal way to achieve all three requirements is not to manage GFSI in isolation, but to fully integrate it into the company’s enterprise resource planning (ERP) software system. In fact, it may be the only way to ensure safety compliance is traceable at all times enterprise-wide.
Seamless GFSI/ERP integration provides food companies with real-time, actionable data that enables managers to trace what has happened in the past; understand what is happening now; and control what will happen in the future.
The benefits of real-time integration far outweigh the costs. With real-time analytics, users can drive continuous food safety improvement by identifying which processes are working, which ones aren’t, what needs to be changed, and where the company’s focus must be to improve quality on an ongoing basis.
With integrated ERP software, food companies can safeguard their manufacturing processes by establishing and applying a variety of security and approval levels at critical quality checkpoints. For example, GFSI has requirements to ensure employee competency. These can easily be maintained by placing security levels within the ERP system, and preventing staff from working at stations where they aren’t qualified to be.
A real-time processing-inspection tool also prevents the ability to skip steps in production by validating the correct completion of each step in its assigned order. In addition, recipe and raw material approval checks can prevent unauthorized substitutions during the manufacturing process. If a particular ingredient is unavailable and a substitution is required, the system will then verify the authenticity and pre-approval of all ingredient changes.
The security benefits of integration extend outside of the company as well. Real-time alerts can notify the quality assurance team whenever a product is received from an unauthorized vendor, and allow for immediate intervention and correction.
Minimize Potential Recall Risks—and Costs
The number of food recalls continues to rise in the U.S., and the costs of foodborne illnesses are increasing at a skyrocketing pace. According to a 2015 study by Robert Scharf, associate professor at The Ohio State University, the total cost of foodborne illness could now be as high as $93.3 billion, up from an estimated $77.7 billion in 2012.
But if a recall actually does occur, one of the most important benefits of GFSI and ERP integration is its ability to minimize a food company’s costs. The same is true during a food safety audit. With real-time ERP integration, food companies of any size are more able to contain costs in a crisis situation.
Figure 1 shows the relationship between a food company’s core manufacturing functions and its standard accounting processes. Everything that happens on the shop floor—from receiving to production to shipping—has a corresponding impact in the accounting system; in other words, not at the plant, but at the corporate level.
A food recall requires seamless traceability throughout the entire enterprise, not just the manufacturing operation. Unless a food company can show exactly where everything is at a given point in time, it’s virtually impossible to identify and isolate where the problems lie, both within and outside of the enterprise.
For example, how do you pinpoint where a particular item of inventory is in its production cycle? Is it still in receiving? Is it already in the production process? Is it now part of a finished product? Has it been shipped? And if so, where did it go?
Any discrepancy or even a short-term lag between manufacturing and accounting makes it virtually impossible to ensure accurate traceability. The only solution is to integrate safety processes into a fully integrated real-time system.
Figure 2 shows what an integrated ERP-based safety system should include.
An integrated ERP program should have two key elements to satisfy GFSI compliance.
- A complete batch history that records all ingredients used, including where they came from and when they were added to the production process. It should also record all inspection information, including who did the work. (This type of report can be used by the FDA as well as third-party auditors.)
- Cradle to grave real-time traceability, one forward and one backward, as required by the FDA and USDA.
With the ability for real-time data capture, all processes that are done on the floor should be recorded on the floor. Raw material (RM) lot numbers should be captured and recorded when delivered. Additional inspections should also be made with corrective actions taken at each appropriate stage in the production process.
RM lot numbers should also be recorded throughout the process, and finished goods should be assigned lot numbers of their own that also include all RM lot numbers used in every final product. This way, manufacturers can be assured of real-time traceability, both forward and backward.
So can auditors. In the event of an audit or recall, documentation is critical to prove that a manufacturer has followed all required safety control steps. And when systems aren’t integrated, it’s far more difficult to locate documents and create a solid inspection trail.
The ability to access supporting documentation quickly and accurately will instill auditors with a sense of confidence because they know the manufacturer is being fully transparent. On the other hand, an auditor may become suspicious and far more demanding when necessary documentation isn’t readily available.
Ultimately, integrating GFSI and ERP is about improving safety, productivity, and profits, not just protection against audits and food recalls. As an industry-driven initiative to certify a company’s commitment to continuous food safety improvement, GFSI participation does more than develop a food safety culture. It enhances a food company’s credibility and reputation, both of which drive interest and potential sales.
Bryan is CEO of Tamlin Software, a provider of customized traceability, ERP, and accounting solutions for small- to mid-sized manufacturers. Reach her at [email protected].
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