According to the Grocery Manufacturers Association, the majority of companies who go through a Class I recall can expect to see $10 million or more in losses as a result. In fact, nearly one in four companies report losses in excess of $30 million for a single recall.
A big part of the problem is traceability in food manufacturing. Not only do traceability issues allow problems to spread, they also lead to increased recall scope and cost.
Recordkeeping problems
One of the biggest traceability challenges goes back to recordkeeping. Without effective procedures to capture multiple dimensions of product information, it becomes difficult to track products and comply with recall requirements. The result? You have to cast a much wider net to capture potentially contaminated product, driving up recall costs.
It’s especially problematic with manual recordkeeping, which is prone to error and makes sorting and tracing difficult. It’s one reason why industry experts are urging companies to get on board with automated food safety software.
When integrated with areas such as shipping and receiving, an automated Food Safety Management System (FSMS) allows you to see exactly where products are in the supply chain. It also helps you comply with U.S. Food and Drug Administration (FDA) requirements in the event of a recall, allowing you to instantly access data, including lot codes and production dates, expiration dates and product order numbers.
Supply chain complexity
Today’s complex global supply chains are one of the biggest sources of risk for food manufacturers today. Poor supply chain visibility means companies recall as much as 50 percent more product than necessary just to be on the safe side.
Supplier quality management tools make it easier to trace product forward to retailers as well as backwards to suppliers, also helping companies link receipt of raw materials; assign a risk rating to individual suppliers based on related quality issues; detect problems earlier with inspection; and extend compliance to the supply chain with cloud-based portals for assigning corrective actions.
Lag time in identification
One problem that hinders traceability and increases the scope and cost of recalls is the lag time between when a problem occurs and when a company detects it.
FSMS integration plays a crucial role in helping reduce the lag time in identification of problems. Steps to focus on here include:
- Effectively managing complaints: Rather than having a standalone complaint handling system, integrating complaints within a larger FSMS allows you to link them to related areas such as production and quality records.
- Managing equipment maintenance: Integrating equipment calibration and maintenance records with the FSMS helps you prevent equipment malfunctions from causing food safety issues.
It’s clear that when we’re talking about traceability, what we’re really talking about is visibility and control. With an automated FSMS, you have the ability to lift the lid and look inside your processes at any time.
Sources:
Grocery Manufacturers Association – Capturing Recall Costs: http://www.gmaonline.org/file-manager/images/gmapublications/Capturing_Recall_Costs_GMA_Whitepaper_FINAL.pdf
Spend Matters – What’s Keeping Food Companies from Improving Traceability in the Supply Chain: http://spendmatters.com/2016/07/08/whats-keeping-food-companies-from-improving-traceability-in-the-supply-chain/
