Is Your Supply Chain Putting Your Company at Risk?
Written by Krista Earl of TagOne | December 7, 2020
Ingredient traceability. Once merely a concern for select consumers and extraordinarily transparent brands, has become a more frequent concern of consumers and has been highlighted in the FDA’s “New Era of Smarter Food Safety” initiative. The FDA, retailers and consumers are increasingly invested in the safety, efficacy and quality of the ingredients and their source that are the foundation of what we are putting in our bodies. This foundation is built on one of the key components in “The New Era of Smarter Food”: Tech Traceability. Tech traceability will combine a culture, best practices and technology to enable your organization to know, at a minimum, who provided your ingredients, and who purchased your ingredients. Sounds simple, right? Well, it depends. Let’s look further at the steps which will help you effectively manage your supply chain.
It Starts with Culture
Implementing a company culture that is focused on quality is critical to ensure that you have a safe, detailed process that keeps your consumers safe. The problem, however, is that many companies are not living up to these standards, and do not have the proper process in place to capture and analyze critical data and documents throughout their supply chain. As recently as August 2020, a salmonella outbreak in onions caused 167 hospitalizations nationally. A study by Countless investigations around the globe have uncovered mislabeled ingredients and unsafe handling of consumable food products. A study by the Journal of American Medicine identified that less than 50% of CBD products had accurate labeling. The result? Consumers aren’t trusting food and supplement companies anymore. Additionally, this drives up legal fees and insurance premiums.
So, what can you do to protect yourself now?
- Develop standard operating procedures. Identify and document your key process areas. And equally important, assign named individuals to own them. When something is assigned to everyone, it’s assigned to no one.
- Get GMP/ GAP certified. This is a long, challenging process, but this will build in the discipline necessary to scale your operation and reduce your risks while you push out a quality product. Additionally, any major retailer or enterprise partner is going to require GMP certification prior to conducting business with you.
- Know your Suppliers and Buyers. You should have a clean database of each of your suppliers (and have documentation of their respective certifications) and also each of your buyers and the products they delivered or purchased (respectively). All documentation needs to be up to date and verified (yes, companies fake their paperwork). Start with a spreadsheet and move to a cloud-based system when you have the budget.
- One up and one back. Once you have your supplier and buyer list locked down (and an approval process to ensure you are working with safe suppliers), make sure you track EVERY transaction that occurs (date, item, lot #, location, CofA’s, etc). If your business is early stage, a spreadsheet and shared cloud drive may suffice, but as you expand, a more sophisticated technology will be required.
- Inactive ingredients matter too. In fact, your packaging could be a risk to your product. Remember, every item that touches your product- adds risk.
- Inspect your processor or contract manufacturer. Many of you may be thinking “I use a partner, and they say they are certified” and then stop. Well, don’t assume. You need to collect and keep all documentation, conduct an audit to ensure that they are meeting your quality standards. Remember, it is your label on the package, so you are liable in the event of an incident.
Taking it to the Next Level
- Risk reduction. Class action lawsuits and civil disputes can put us in court, which is a significant distraction from growth, an undue financial burden and can destroy your reputation. Don’t risk it.
- Product provenance. If you have taken the time to ensure that you have the best quality product on the market (organic, no-GMO, etc) how can you validate this claim? Blockchain traceability systems can help you differentiate your product and increase sales.
- Chain of custody. Having proper documentation, CofA’s and buyer/seller information isn’t only for your records, it is extremely important to illustrate who was in possession of specific ingredients at what time period. This is especially critical with foreign imported items.
- Tech traceability. Consumers want to know where the product they are putting in and on their body came from. Domestic? Organic? Allergens? And equally important, in the event there is a recall, a quick, surgical action can make the difference in lives, and millions in lost revenue. The only way to achieve this is with both a tight supply chain process and a technology system which can “connect” the data from your suppliers, ingredients, products and track to your buyers.
- Get digital. It is time to move on from paper, spreadsheets, dropbox and your accounting system and invest in a digital platform that consolidates, organizes, and measures all of your supply chain and inventory information.
- Predictive Analytics. Anything that is measured improves. Imagine if you could identify your more reliable suppliers based on a graph? Or which seed is going to perform better in a different climate? Being able to track your data and analytics will keep you ahead of the competition.
Building a great brand starts with building a great product. Yes, we can drive sales and have nice packaging, but your product is a compilation of all the ingredients and critical events in your supply chain. The companies that master quality and their supply chain and know where all their ingredients came from, will win by developing a reputation of excellence leading to trust from consumers and retailers.
– Krista Earl, Marketing Coordinator at TagOne.