It only takes one bite to send a food manufacturer spiraling into a quality disaster. Many food companies have found this out the hard way, as recalls and reports of foodborne illnesses have occurred left and right over the past several years.
One of the most recent outbreaks making headlines is Chipotle Mexican Grill’s E. coli incident. This outbreak not only sickened dozens of consumers, but has also devastated the company’s brand reputation and stock value. In fact, Chipotle shares have fallen 40 percent since August 2015, and hit a 52-week low in December, according to MarketWatch. As a result, Chipotle announced that it has reassessed its food safety programs and is revising its standards. The corporation is now implementing measures such as high-resolution and end of shelf-life ingredient testing, continuous improvement in the supply system based on testing data, and enhanced food safety training for team members.
While these actions may help Chipotle turn its luck around in the future, it is impossible to ignore the damage done to the brand’s reputation. Unfortunately, this is too often the case—many food manufacturers do not take the proper quality measures until it’s too late. Add in the 24-hour news cycle and empowered consumers eager to sound off on social media platforms, and it is even more difficult to avoid the repercussions of even a seemingly small quality issue. In today’s increasingly competitive, global marketplace, quality is no longer just a problem to solve. Quality can be a strategic advantage that makes all the difference in a brand’s equity and a company’s bottom line.
Of course, Chipotle’s case is just one example of the detrimental effects of foodborne illnesses. According to the CDC, as many as 1 in 6 Americans (about 48 million people) get sick with a foodborne illness each year. The good news is that this is a preventable epidemic.
Visibility Needed in the Quest for Quality
To reduce recalls, mitigate foodborne illnesses, and ensure consumer safety, the food industry is taking great strides. On a federal level, the Food Safety Modernization Act (FSMA) is the most stringent regulation, requiring food manufacturers to enhance their traceability efforts to prevent, rather than react to, recalls. At the same time, the industry-driven Global Food Safety Initiative (GFSI) continues to advocate its vision, “Safe Food for Consumers Everywhere,” through leadership and guidance on food safety management systems. Given the more stringent regulations, endless stream of recalls, and frightening high-profile outbreaks like Chipotle’s, GFSI’s work is more relevant today than ever before.
One of GFSI’s chief goals is to help organizations reduce food safety risks through end-to-end, supply chain-wide visibility. Without a doubt, visibility across the value chain holds the key to ensuring product quality from farm to fork. However, as supply chains become more global and diverse, achieving 100-percent visibility in tracking and tracing products is a challenge. Here lies the problem: Today’s food manufacturers rely not only on other plants, but also suppliers from around the world, to provide various ingredients and components for incorporation into their finished goods. For example, a food manufacturer in the U.S. may bring in fish from a supplier in China to create frozen fillets. The fish becomes a part of the product that ends up on the grocery store’s shelf.
But, what if, unbeknownst to the manufacturer, the fish received are contaminated? The fillets containing that batch of fish may end up recalled, costing the food company money, damaging its reputation, and compromising consumer safety. Or, what if a potato chip manufacturer receives a shipment of potatoes, only to find that they are rotten just before processing? Although the issue is caught before the potatoes make their way to the assembly line, the manufacturer still wastes time, money, and resources scrapping the goods.
Quality must now go beyond simply obtaining a certificate of analysis from a supplier—it requires real-time visibility into all operations across the supply chain. Moreover, suppliers must become an extension of the enterprise—no longer are manufacturers out to find the cheapest supplier or pin one against the other to get the lowest price.
But, visibility doesn’t end with suppliers. Even if a manufacturer monitors its suppliers’ operations and the quality of incoming components, it still receives only a certain level of information. True supply chain-wide visibility includes post-production processes—from inventory management, to order fulfillment, to shipping, to delivery, to stocking stores’ shelves or restaurants’ kitchens. What happens to the product on the truck during shipment? How long does it take to load onto that truck? What is the shipping temperature? How long was the product exposed to that temperature? There are numerous variables to monitor.
For instance, Grade A milk must, by law, maintain a temperature of 45 degrees Fahrenheit or below to prevent bacteria growth. Although the milk may have met quality checks in the manufacturers’ warehouse, there’s no telling what will happen in transit. If the manufacturer could continue to monitor the temperature of the milk after it leaves its facility, it could easily pull tainted batches before they go on sale at the grocery store or become part of a restaurant’s next recipe.
Quality Management Technology for Visibility
GFSI touts the equivalence and convergence between effective food safety management systems in reducing food safety risks. Indeed, many food companies have invested in various technologies to obtain better quality control. Yet, the food manufacturer, its suppliers, contractors, equipment providers, and other partners often each have their own software systems for managing quality and monitoring processes. With siloed systems, there is little more a manufacturer can do to control quality beyond its four walls. For maximum supply chain-wide visibility, the most promising technology is an advanced enterprise quality management solution.
Leveraging statistical process control methodologies, an enterprise quality management solution allows food manufacturers to integrate every product line, plant, supplier, partner, C-level office, and other pieces of the global value chain into a centralized quality program. By collecting and standardizing manufacturing data and rolling it up into a single repository, such a solution helps manufacturers proactively monitor, analyze, and report on real-time and historical process data.
On the shop floor, operators can monitor the data collected in real time to immediately correct out-of-spec processes, and predict and prevent issues before they occur. Then, at the executive level, quality professionals can analyze enterprise-wide data in aggregate to obtain actionable insight, or Manufacturing Intelligence, which allows them to identify areas for improvement and to make better business decisions. Is there an opportunity to correct an overfill issue at a particular plant? Is one facility producing an abnormal amount of scrap? Has one plant developed a best practice that can be applied to other facilities? These findings can lead to cost savings and new operational efficiencies.
Furthermore, by integrating suppliers and other third parties, food manufacturers can verify that ingredients and other components meet their quality standards before they are incorporated into their products. So, a hamburger manufacturer can ensure the freshness of the beef it receives from its supplier before accepting a shipment. And, a fast food chain can monitor the burgers during transportation to make sure they maintain the proper temperature. This level of traceability closes gaps in the supply chain and offers a holistic view of all processes.
While driving farm-to-fork quality, enterprise quality management solutions can help food companies maintain compliance with federal regulations and industry standards, including FSMA, HACCP, and the FDA’s 21 CFR Part 11. Along with workflow checklists, and lot genealogy and traceability functions, advanced software simplifies the audit process by housing quality records and electronic documentation in a single database.
The Next Steps
Now that the technology to enable real-time, end-to-end supply chain visibility is a reality, it is time for a change. Using legacy or paper-based systems is not sustainable and does not bring world-class results. Food manufacturers that embrace enterprise quality management systems will most readily attain visibility across the value chain to make informed business decisions that improve quality, cut costs, and reduce corporate risk.
So, could Chipotle have mitigated, if not prevented, its debacle if it had been better connected with its supply chain? The answer is “yes.” While it’s too late to undo the damage, perhaps Chipotle’s episode will help reinforce the importance of supply-chain wide integration in reducing food safety risks. That notion, combined with stricter industry standards, ongoing initiatives like GFSI, and the evolution of advanced technology, give manufacturers the motivation and tools to deliver safe, high-quality products. As a result, food companies can uphold their brand’s reputation, improve the bottom line, and keep consumers coming back for another bite.
Fair, chief operating officer for InfinityQS International, Inc., oversees the company’s global business operations and helps clients understand statistical methods and implement InfinityQS’ enterprise quality management software. Reach him at 800-722-7978.