Extract of speech delivered to business at the China International Food Safety & Quality Conference
Peter Gillson, Director SFI International, spoke at the China International Food Safety & Quality Conference in Shanghai on 11th November 2010. The following is an extract of his speech...
Best Practice in Managing Risk from Farm to Consumer
Everyone in the world is exposed to Risk – China is no different. Some recognize it and act on it better than others and today we will share Best Practice in Managing Risk from Farm to Consumer and look to address key areas that business both local and foreign can limit Risk.
Given the increasing market share that China assumes, Government Agencies will be increasing the inspection process of manufacturing facilities. The increased focus is due to increased demands by today’s consumer groups and federal agencies. This alone drives the need for best practice systems for tracking and traceability over the lifecycle of a product.
Product and Food safety measures are constantly under the microscope due largely to the increased manufacturing numbers, speed to market pressures and competition to gain market share in the global world where opportunity presents itself.
Product contamination and recalls continue. There are growing requirements for increased visibility and traceability of goods – particularly exports.
The Risks are further heightened, as supply chains extend into countries where product safety isn’t a high priority.
Food contamination has a devastating effect on businesses due to the financial consequence and the cost and effort involved in restoring the company image and consumer confidence and rebuilding brand loyalty.
Growing requirements for increased visibility and traceability of goods – particularly exports – is a reality
The US Government now requires mandatory registration for companies involved in the country’s food chain, as well as a 24hr pre-notification of US food shipments and significant additional shipment data. Requirements for the risk details of every step of the food chain are now being introduced!
The ACCC in Australia is leading the way by adopting SOCIAL MEDIA methods to broadcast the release of recall reports by sending tweets through a new food safety twitter account and notifications being directly emailed to hundreds of industry associations and stakeholders – This means you can no longer hide on the domestic or international markets.
The new Product Safety Recalls Australia website, http://www.recalls.gov.au, also allows consumers and businesses to sign up for electronic recall alerts about the types of products of most interest to them, such as children’s products and this will be extended to food items as they impact health.
In Australia from January 1st, 2011 all business must report to Government any food or product issue that threatens a consumers health, causes illness or serious injury including death, within 2 days of becoming aware of such an issue. Failure to do so will result in hefty fines or prosecution. Regulators are growing increasingly concerned about quality and safety failures involving manufactured foods from many different parts of the globe.
China exports approximately 7% of Australia’s food imports (including raw materials used in Australian food manufacturing) and this is growing rapidly. A contamination incident or food emergency in China would have a major impact on Australia’s food industry and economy at large. Companies must have increased visibility and traceability of their goods to mitigate the risk of this occurring. While all food recalls are different and their costs vary significantly, it is a substantial burden on the business.
Political and regulatory risks, cultural risk, supply chain risk, media risk and consumer awareness are now much more focused for business.
Companies now need to understand that they can create an awareness of the risks from the very beginning and regularly review the risks and validate risk plans to limit exposure, hence mitigating many of the operational risks and protecting your brand.
Government and corporate compliance means that we now Manage Risk & adopt Standards set out by authorities such as, HACCP FDA and other Government agencies.
There are Laws and strict Penalties for non-compliance.
In conjunction with changes in law, we now have the Technologies to support the infrastructure.
Business must have best-of-breed Transport Management, Warehouse, Inventory and ERP systems. All information collected is communicated through advanced e-messaging and communication systems. Having put in place systems to meet the need it is Imperative that business deploy effective training so that systems and plans may be managed.
More demanding customer requirements are also evident today
●Product traceability, food safety and quality systems (Particularly export markets)
●Brand positioning
●Social Media
●New trends that management needs to embrace – customer/user innovation
●Deliver innovative value for customers based on what they actually want – not what business thinks they want
●Customer is now a part of the business structure and never more so than via SOCIAL MEDIA, they can make you or they can break you
Today’s consumer is time poor and technology aware. They are demanding and they know their rights. They are not afraid to voice their opinion and if you get it wrong they can destroy your brand by using today’s technology and social media outlets to spread the word.
So given those in the boardroom understand that the consumer is now part of the risk plan, what is it that business can do better and how do they implement best practice in the changing market. Firstly they must understand what it is they need to achieve and deliver the holistic view from the company that addresses the need.
The most common driver for identification of a product issue can often be once the product hits the consumer’s plate or the point of purchase.
It is usually here that they will identify a foreign object, strange odour, indifferent smell or taste, breakages, packaging issues or product contamination. Sophisticated CRM systems will automatically identify possible food issues based on the incoming feedback. This can be derived from verbal comment, social media comments, web forms, phone recordings or other electronic means.
Immediately this drives checking against acceptable risks plans, automated pop-ups based on alert levels linked to rules-based policies and routes the product issue to the investigation area of the business. Quality assurance will then verify the possible food issue and verify steps against the plans.
This can ultimately drive corrective action, validation of plans, changes to plans, audit process, Government requirements for compliance, additional training or executive dashboard reports back to the Board for a new decision making process. Utilising smart built in messaging and communication tools means that information and populated reports reach their destination in a timely and compliant manner.
The important point to note is that you are able to act swiftly and with confidence knowing that all the processes have been validated and that plans are in place to support the next steps.
Thank you.
SFI Director Peter Gillson discusses current trends in consumer expectations around product safety and corporate traceability systems, during a recent trip to China.
