Six ways food manufacturers can reduce risks through supply chains

There has been an alarming growth in food recalls in Australia: 106 recalls took place in 2018-19, compared with 81 in 2017-18 and 61 in 2016-17. A provider of food safety certification and training is pointing to weak supply chain management as a primary cause and is urging food manufacturers and retailers to put in place robust food safety management systems to reduce supply chain risks.

The message comes from SAI Global, which has audited thousands of food retailers and manufacturers to ensure they comply with food industry regulations, and trains thousands of Australians annually on food safety through its tailored training, public courses and webinars.

SAI Global food safety spokesperson Maidie Wood says: “Food has never been a more global, fast-moving and complex market than it is today. When a food crosses borders of any kind, the familiar health and safety risks are joined by several others, including intentional and inadvertent adulteration, product mislabelling, substitution, spoilage due to any unforeseen circumstance, damage while in transit and unpredictable politics and shifts in regulations.”

She adds: “Food manufacturers need to be continually rethinking their controls, monitor their indirect suppliers and implement key performance indicators to manage downstream supply risks.”

SAI Global reveals six ways food businesses can reduce food safety risks in their supply chain:

  1. Always listen to the consumer. Consumers increasingly care about where their foods come from and are demanding high ethical standards when it comes to the sourcing and manufacturing of food. For example, today’s consumers are better informed about the impact of diet on wellbeing, and expect information about provenance, nutrition and allergens to be supplied on the foods they consume. As organisations are increasingly being held publicly accountable for the poor ethical activities of their first, second, third, and even fourth tier suppliers, staying close to consumers’ needs is now critical to their success.
  1. Use technology to build greater transparency. As technology is connecting food manufacturers and retailers to more suppliers than ever, it is essential they are aware of the risks. The availability of technologies such as sensors to detect temperature changes and smart packaging that changes colour based on expiry dates give manufacturers greater control over potential risks.
  1. Set key performance indicators for suppliers. As tracking performance is key to improving it, a good idea is to motivate suppliers to strive for excellence. For instance, high performing suppliers could be awarded for providing the highest quality products, most on-time delivery, and excellent service. It is best to ensure these indicators are right for the early identification of risk and are set throughout the supply chain.
  2. Monitor indirect suppliers. It can be a challenge to document the end-to-end supply chain – and manufacturers who can source from anywhere are at greater risk of losing control of their supplier relationships. This is where monitoring of indirect suppliers is important. Although this can be both an extensive and expensive process, requiring both time and money, decisions regarding who to target and how far to go depends on the relative risks associated with the ingredients or products being sourced, such as country of origin.
  3. Implement a supplier diversity management program. Supplier diversity management – the process of creating a diverse supply chain to secure the inclusion of different groups – is an increasing focus among food companies looking to move from the ‘preferred supplier’ model to a ‘multi-supplier’ relationship model. Such a program can introduce innovation through new products, services and solutions, and allow a company to explore new opportunities for business expansion. For example, if a food product has been damaged or destroyed by bushfire, having a supplier diversity program allows the manufacturer to be agile in sourcing an ingredient from an alternative supplier, possibly in a difference part of the world. This model does not come without its challenges, however. The need to stay abreast of ever-changing consumer needs makes building holistic relationships of trust and transparency even more critical.
  1. Get food safety training and certification. Although it’s a legal requirement that all food handlers in Australia are trained in food safety, more in-depth Food Safety Supervisor training, such as HACCP certification, is best practice but not mandatory. However, the benefits of this training far outweigh the risks. SAI Global encourages food manufacturers and retailers to get certified to meet internationally recognised food safety standards such as SQF, FSSC, ISO 22000, BRCGS and IFS which all incorporate HACCP, to show their customers that they have a robust food safety management system in place. These standards enable businesses to improve their processes, increase efficiencies, and ultimately, communicate with their partners about risks in the supply chain.