Food recalls are costly and risky and can threaten the existence of a company. Research indicates that approximately $20 billion is lost every year in the U.S. due to recalls. This not only includes the cost of product recalls, but also the ripple effect of a single recall on multiple stakeholders, including competing products in the same category. According to a Grocery Manufacturers Association (GMA) survey, 81% of respondents deem financial risk from recalls as significant to catastrophic.
With so much at stake, it is becoming increasingly important for food companies to look at minimizing food recalls. The US Government’s Food Safety Modernization Act (FSMA) 2011 has made food safety a business-critical metric for food manufacturing companies. This has clearly put the onus for food safety on the manufacturers and made it a primary driver for business continuity.
Traditionally food safety was a mere quality metric, but now it can prove to be a key competitive differentiator. Though, a challenge organizations face today is to cross-leverage the investments in food safety to other operational processes of their business. The ability of a manufacturer to manage operational constraints, yet continuously deliver safe food at optimal costs, becomes a competitive edge. The inbuilt capability of a robust PLM system to manage food safety aspects through a combination of process and technology interventions provides the ideal way to drive further operational efficiencies. The key capabilities of a PLM system that makes food safety management an integrated outcome are:
- Information visibility – This helps track product safety, profitability and also lends flexibility to incorporate change at any level
- Automation – This helps in collection and analyses of data that ensures food safety and timely decisions across the supply chain
- Collaboration– The collaborative aspects of PLM are key to minimize losses in the event of recalls and to respond quickly with corrective steps
Given the difficulty in getting financial approvals for technology investments with regards to food safety, it is important to cross-leverage technology embedded in processes across food safety management and product lifecycle management to reach desired goals. An integrated PLM/enterprise apps framework built with a focus on capturing critical compliance data points will help food manufacturers satisfy key provisions of FSMA:
- Auditability of records that are secure
- Traceability of product information to an ingredient level
- Quicker time to recall and response preparedness
The current product design and manufacturing landscape provides a number of opportunities for food manufacturing companies to optimize the potential of existing technologies. Such initiatives can help make these companies responsive to the varying consumer and regulatory demands and mitigate the risk of product recalls.
What are the other ways in which technology can help tackle food safety?