Food for Thought: Part Two - The Product Recall Challenge
By Ann Grackin
on Jul 19, 2011
In foods as diverse as burgers and bean sprouts, pathogens such as E.coli, Salmonella, Listeria and other food pathogens have caused outbreaks and made recent headlines. The challenges in tracing the source of E.coli in Germany, for example, point to the need for better methods and technology for the produce supply chain.
Full Article Below -
You’ve heard the stats: 48 million get sick; 128,000 get hospitalized and over 3,000 die every year due to foodborne illnesses. And that’s just in the US. As far as food traceability policies go, first the EU, then the US, we have been having our share of tragedies lately, especially with E.coli, Listeria, and other pathogens. And globally, tens of thousands die each year from tainted food.
In Part One we showed you the Pizza chart providing a simple view of the challenges of managing a few elements of the produce chain. Whether fresh, packaged or prepared, finding the sources and then executing a complete recall of food (or pharmaceutical products) is a huge challenge. Time is of the essence since both the product as well as people who handle food can continue to spread these deadly diseases.
Here in Part Two we propose a model for organizations to consider, in terms of Recall and Traceability Management.
Prepared food is particularly problematic, since the chain is very complex; it varies a lot, often from day to day; there are many ingredients handlers, all of whom can introduce pathogens; or there can be spoilage due to improper cleaning of work areas and employee habits. Home food storage practices can also lead to cross contamination, making identification of problems a challenge.
Even packaged foods can be challenging to trace due to variables such as recipe, supplier, or other changes in process and handling during transportation. Let’s start with this simple example to demonstrate the challenges in identification. In Figure 1, we see a simple supply chain of packaged items.
Multiple suppliers and ingredients go into the manufactured product. Truckloads, containers, pallets and cases are shipped globally, but even the lowest level—the case—can be further subdivided into items for distribution. Now the challenge comes: who were the ultimate retailers and then the ultimate consumers?
Many systems contain some information about the supply chain and its path to the end consumer. But rarely is all the critical information contained in one system: Figure 1 gives you a hint of all the systems that might have some of that data. Putting together a complete picture, therefore, is a real challenge. Many firms do not have these systems or they may lack the discipline to adhere to existing data systems. Whom do you notify if things go wrong with your product? And how do you find the source of a problem?
My recent vacation had me eating many meals in restaurants, and I found it interesting to watch the delivery of mixed pallets, small shipments of ‘one each’ packaged foods, containers of cut foods, or trays of ‘to be baked on site’ semi-prepared foods. Trays of breads and pastries (without any covers on the trays) were moved by the drivers from non-refrigerated trucks, into the parking lot and then into open kitchens of these restaurants. Pretty informal and non-regimented chains! Hand washing, hair nets—forget it!
Now let’s suppose that a pathogen entered the batch in the factory. Our Patient One becomes ill after opening a can and consuming the contents. Once it is determined that Patient One got sick from that item, the challenge emerges immediately for the retailer and manufacturers. Was contamination introduced on the line, thus contaminating all products that went through that line? Did the contaminant originate in a supplier source? Did the item spoil in transport, and is the rest of the batch OK? Or was there some other source of contamination? Is it just that one batch that is contaminated? Whom do you notify? Do you have to notify all the customers who bought that product, or just the isolated consumers of that one batch? Good luck!
How do groups of trading partners organize a plan to diagnose, notify, recall, and resolve these issues?
Looking at the big picture requires both public and private (corporate) cooperation, and changes to processes, systems, methods and technologies, and education. Figure 2 (below) provides a framework for firms to consider. In this brief article I will not walk through all the elements. Within the industry, I think they are understood. But I will emphasize what I believe are the two most important elements. Number one, a risk/prevention-based approach; and number two, the implementation of visibility, or track and trace technologies in the supply chain.
In highly complex and porous supply chains, prevention and then rapid notification, at the earliest possible moment (vs. recalcitrance that we have today), are the most important elements of a successful recovery, avoiding or reducing injury—both to consumers and to the companies involved.
Risk and Prevention Management
These are co-mingled elements, but prevention or a risk management approach is now the FDA’s focus since the passage of the Food Modernization Safety Act of 2011. More inspections and more education are part of the program. The FDA also has a lot more power to license and force inspections and recalls than before. But as important as that is, it will not protect a company against serious damage to their customers or their brand. So prevention has to include locking down the processes and introducing better hazard analysis and prevention controls, and supporting, encouraging and monitoring employees to ‘do the right thing.’ Employees may not know (or care), so companies have to ensure that behavioral changes are made.
Of course, the risk industry would like to sell you their products, too. Product liability, reputation risk, supply chain risk and business continuity insurance are a few of these products. Many retailers require these types of insurance from their suppliers as part of the retailers’ supplier agreements. Their real value is in providing the necessary funds to execute a recall and hire professional services to help manage the many issues associated with the recall when things go wrong. Often, a progressive company can positively impact the cost of risk products by proactively assessing risk and putting in place strong business continuity and corrective action programs.
We advise companies to do more in the prevention space by re-evaluating their supplier relationships and changing and enforcing their codes of conduct. As you can read in our recent risk research, companies are often unaware of who their multi-tier partners are. That surely leaves them open to issues in the future.
Recall Management - Public and Private Views
More third-party services are emerging to manage recalls. Recall services, of course, vary for different industries and products. For example, consumer products require mass reach and communications, reverse logistics, and problem resolution.
Walking the Supply Chain—Supply Chain Systems and Methods
What strikes many people when they hear about a recall is how little brand companies often know about who their supply chain partners are. Not only does this represent a challenge in recalls, but it also means that companies may not be able to back up their claims about their products. Consumers are beginning to learn these facts: Organic might not be so organic.1 Fat free may not be fat free. And ‘A Product of Italy,’ or ‘Made in America’ may be somewhat false claims. So whatever the consequences of a particular event due to a tainted product, the industry has created a deep lack of public trust in the products they eat. Not a good reputation for the food industry.
So traceability solutions in use today, the so-called ‘one up/one down,’ may be insufficient for not only effective recalls, but also quality management and brand allure. Therefore, e-pedigree from the source may ultimately be the path forward. There are economical ways to include the smallest growers as part of an effective track and trace process. But often, the noise levels in the market don’t help promote these types of methods.
In the Pharmaceutical industry, which can afford more sophisticated technology, the FDA and various states have toyed with a deeper e-pedigree or ‘mass serialization’ (see Figure 3) policy. However, implementation has been slow. And the ‘e’ in e-pedigree is a very basic method. A company collects data, but does not go all the way in creating a visible supply chain.
We have pointed to better systems in various track and trace, compliance, and food safety articles. What is required are intra-enterprise systems (for recipe management, quality, procurement, and ethics management), as well as cross-enterprise systems for visibility and compliance. And supply chain trace capability, in conjunction with standards such as proposed by GS1, can take various industries—not just the food industry—a long way in providing supply chain visibility as well as the ability to conduct a recall if it is ever required.
Whatever the process or system, the minimum ISO 22005 ‘standard’ may be of help. Although this standard is a few years old and new technology providing potentially some better methods is on the market, it does provide guidance about what should comprise a trace system and process. You should also understand legislation that has already been passed, such as the Bioterrorism Act requiring changes to licensing and labeling for imports. It’s interesting to note that all the legislation over the last ten years still leaves gaps in the food chain. So ultimately it still is the responsibility of each company—not the government—to ensure the quality and safety of their products.
Conclusions: Recall Model Yes, but Prevention is Better
We are starting to see a variety of industries start to address total supply chain visibility and supply chain risk management (SCRM)—getting information about their multi-tier chains and making changes, if needed, to manage their risks. Globalization and outsourcing has increased these risks and incidents of tainted products due to error or illicit activities. Companies need to take responsibility for their outsourcing and take more of an active role in what happens in their supply chains.