The volume and severity of food recalls in recent years are enough to scare any consumer away from grocery aisles and frighten any food manufacturer into thinking its product might be next.
Explore this issueOctober/November 2009
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The industry got a taste of that reality this year with the massive recall of Salmonella-contaminated peanut products made from foods manufactured by Peanut Corporation of America (PCA). By March, the recall included more than 3,200 peanut products, with the number rising daily. Then, just as the dust seemed to settle, a separate recall of Salmonella-tainted pistachio products began.
Of course, recalls aren’t unique to the nut industry. In the last quarter of 2008, the U.S. Food and Drug Administration’s Web site listed 33 Class I food recalls and safety alerts—those posing the most serious health risks to consumers—and the U.S. Department of Agriculture reported 18 recalls related to meat and poultry. Some of those highly publicized recalls included cocoa with possible melamine contamination, tomato sauce with labels that did not declare milk ingredients, and several beef products with possible Escherichia coli contamination.
These cases should set off an internal warning alarm for any food industry executive. Indeed, AMR Research’s 2008 survey of 251 food and beverage supply chain decision makers in the United States and Europe showed that more than half participated in a health and safety recall in 2007. And these incidents came at a high cost: More than half the recalls resulted in write-offs exceeding $10 million.
On top of that, companies face a risk of lingering consumer backlash from recalls. According to separate surveys conducted by Deloitte Consulting LLP and Gallup Inc. in 2008, about 60% of Americans have avoided certain foods or brands because of a recall. By February 2009, sales of peanut butter were down 25% for all brands, even those not involved with the recall. Contributing to consumer and industry unrest is the fact that many recalls are slow to get started, take a long time to perform, and produce incomplete results: AMR’s respondents said it takes an average of 14 days to discover the need for a recall and 20 more days to enact it. That kind of recall lag time, and the genesis of some food recalls, can often be associated with the technology used in the manufacture of food products. Manufacturers using multiple software solutions to manage their business may be at the greatest risk for inefficient recalls. This article explains the recall dangers related to that technology setting, and it explores a strategy for solving those problems—so your company won’t be part of the latest recall statistics.
House of Cards
Many recall problems stem from the use of multiple software systems and/or manual processes for managing a food manufacturing business. When you have one program that handles recipes, one for sales, another for accounting, and paper-based systems for inventory and production, you have no way to establish and maintain the process controls essential to product safety and traceability.
Take production, for example. A worker goes into your warehouse—we’ll call this person Mike—and pulls the inventory items listed on the batch ticket. He writes the lot numbers on the ticket and sends the items to production. The problem is, Mike is only human, and he’s bound to make mistakes now and again. And, with this system, you can’t stop him from pulling lot 510 when he’s supposed to pull lot 501. Unfortunately, if his slipup goes unnoticed, it could lead to a major recall.