Approving new suppliers is often atop the list of the most common nonconformances, and anecdotally, nearly every company we talk with says they struggle with managing their suppliers. So, what’s the solution?
Explore this issueJune/July 2019
The bottom line is, managing supplier quality and safety is hard work. One thing our experience has shown us is that doing a considerable amount of work up front through an effective onboarding program can prevent issues and headaches down the road.
Identifying a solid supplier onboarding process is critical and needs to be defined in a way that accommodates varying circumstances. (How quickly does a supplier need to be qualified? Is this a small supplier? Is this supplier critical to our business?) In all circumstances the outcome should be the same—you’ve evaluated the supplier against a set of requirements and are confident you’ve assessed and managed the risk of introducing the product into your process or served directly to your customers.
Culture Is Critical
Many programs are doomed to fail if the organization doesn’t have a strong quality and safety culture. No QA department alone will be able to support an effective onboarding function if quality and safety aren’t part of the fabric of the organization. Without it a “buy first check later” culture ensues, and we wear ourselves down fighting fires, managing complaints, recalls, upset customers, and, of course, panicked audit days.
Perfecting the Process
Creating a sound process that works for any organization will and should take more time than you think. The process needs to work for your business. The onboarding process should be integrated to meet the needs of all stakeholders in the organization including purchasing, legal, quality, food safety, operations, product development, and marketing. Having the right people engaged in developing and executing the process is key.
A clear strategy on sourcing goals needs to be defined with your brand, and the requirements of your supplies must align with this. For example, a brand that stands for local, small-scale sourcing yet requires Global Food Safety Initiative (GFSI) certification isn’t likely to find anything compatible.
In defining the specific QA and food safety requirements of your suppliers, regulations and standards provide a lot of flexibility in how you structure a supplier approval program (within the confines of making a high-quality and safe food). Think about what it’s going to take to trust your supplier. A risk assessment should help determine exactly what is required and the frequency at which those requirements need to be assessed. Will sharing some documentation be enough, or would a conference call or site visit give you the confidence you need? Do all the onboarding requirements/documents need to be refreshed each year for every supplier?
When considering requirements for onboarding suppliers, take into account:
- Inherent risk of the product/ingredient;
- Regulatory requirements (Food Safety Modernization Act, Foreign Supplier Verification Program, Safe Food for Canadian Act);
- GFSI certification;
- Brand standards (sustainability attributes, food fraud, and social compliance like Non-GMO, Organic, Free From, etc.); and
- Small suppliers (how will you deal with them?).
Once you understand what it will take to trust a supplier, how will you communicate these requirements to the suppliers? This piece is very often missed, and usually takes the shape of a demand rather than a step toward a working partnership. Personalizing the message and having an initial phone call with your supplier QA team can go a long way in building a reliable relationship. Often, the most time-intensive step is encouraging suppliers to provide the needed documents. The request requires a supplier’s cooperation and having the right communication plan can speed this step immensely.
Expanding the Scope
The scope of responsibility of the food safety and QA function is also expanding to include assessment in areas such as social compliance, sustainability, brand standards, and food fraud considerations, along with regulatory compliance. The right people need to be in place to evaluate the supplier to determine the business risk. A produce supplier and a meat supplier are two different creatures; add in social compliance, and it’s difficult to find all the skills needed in a single person. If it does all fall on the QA team, ensuring your team receives the proper professional development to be knowledgeable in all the areas being evaluated is vital.
It’s inevitable that one day we will look back and scratch our heads at how we used to onboard suppliers and manage the data. Plenty has been written on revolutionary technology on its way, but until then, we must evaluate the existing options in the marketplace that can work for us now. There are many ways to ease the onboarding process and ongoing management of data. However, they all require the foundational elements described here and should be evaluated to fit your organizational needs and processes.
McGuire and Arnald work at NSF International Consulting Division providing supplier management services to food and beverage clients including outsourced services in supplier onboarding. Reach McGuire at firstname.lastname@example.org.