The United
States Food and Drug Administration (FDA) regulates may items including food,
drugs, medical devices, electronics that emit radiation, as well as many other
products that could potentially harm public health, safety, or cause death. The
FDA enforces laws and regulations that are becoming increasingly complex
challenging the food and beverage industry. Industry leaders and professional associations
are encouraged to join the process of developing government approved industry
standard to protect the health and welfare of consumers.
There are many
organizations across the food and beverage industry that have worked with
government agencies developing policies and procedures to protect the supply
chain. Manufacturers and retail
distributors are challenged when importing products although the FDA has
increased their presence in foreign countries providing assistance to enhance
food safety measures for foreign exporters.
The FDA has
traditionally acted in reaction to an event or loss but in recent years has
changed their organization to focus on prevention by implementing “farm to
table” security measures. Manufacturers
are becoming more committed to conducting self-audits to detect food
contamination before a health risk or death occurs. Recalls are now voluntarily initiated where
the manufacturer can initiate action, or, the government can mandate a
recall.
Most manufacturers
of food products are working in conjunction with professional associations and
the FDA developing procedures that limit risk to food contamination. Regardless the efforts an organization in the
supply chain may implement, there is always the possibility of a recall whether
due to a supplier issue, an internal problem, or intentional act of tampering
or contamination. Taking immediate
corrective action and implementing crisis management plans will mitigate the
crisis. What are the best methods of preparing
for a recall event? Will the development
of a comprehensive response plan including communications, recall processes, and
technology; is it possible to minimize risk and potential liability?
Risk Management
A food recall
occurs when any corrective action is taken by a company protecting consumers
from contaminated or mislabeled products that could potentially bankrupt the
organization. Strategic planning to
develop best practices and quality control checkpoints throughout the
manufacturing process assists reducing liability. Although a company may have liability
insurance, “it will not cover the expense of product retrieval nor will it
impact customer trust” (Kaletunc
& Ozadali, 2012).
A company at any point throughout the supply chain should
consider not only regulatory food safety requirements, but develop internal
safety policies. The primary goals of
structuring a recall policy should be in place to protect consumer health,
comply with existing government regulations, minimize recall costs, and rebuild
brand and reputation with the public.
Maple Leaf Foods suffered a significant loss due to listeria
contamination at a Toronto facility. From
the point of suspicion of contamination to Maple Leaf sending notification to
distributors to stop shipping products was approximately a two month gap. It took an additional two weeks before Maple
Leaf announced a nationwide recall of three deli meats. Two weeks later, the recall was expanded to
223 product lines. Ultimately, there
were twenty deaths and the company suffered over $250 million in damages. “The United States faced a similar listeria
crisis resulting in 15 deaths from listeria contamination that resulted with
increased food safety requirements such as boiling meat or adding
anti-microbial agents, however, the Canadian government did not require this
process” (Stanwick & Stanwick, 2012).
By examining industry standards, a company should implement additional
safety measures to reduce risk of contamination.
Maple Leaf discovered the listeria bacteria inside two
automated slicing machines after they had been dismantled for extensive
testing. The machines were sanitized
daily, but the bacterium was found to be growing inside the equipment beyond
the reach of their sanitization process.
This identifies the need for manufacturers to seek continual process
improvements identifying potential food safety gaps as well as developing
cooperative and communicative relationships with vendors and suppliers creating
a knowledge base for food safety and mutual profitability.
Maple Leaf struggled to manage the crisis, delayed in
confirming suspicions, and had difficulty tracking contaminated foods that had
already left their warehouse which contributed to the significance of the total
loss.
Inventory Management
and Recalls
In the event of
a recall, crisis management plans should be implemented. Distributors and suppliers should be
contacted immediately to stop shipments, but developing a system to identify the
location of product is critical. Radio
Frequency Identification (RFID) tagging is the most effective technology that
provides efficient and accurate data.
Maintaining a controlled inventory process can limit exposure and
expedite the recall process. A
manufacturing plant has an opportunity to identify critical information such as
the food supplier, date the shipment was received, weight, and any other
pertinent information such as temperature that will reduce the opportunity for
contamination or spoilage. As food
travels from the original source throughout the manufacturing process and
distribution chain, it is handled by a significant number of people before it
is consumed. There are many
opportunities along the supply chain for accidental or malicious mishandling
that can lead to contamination or spoilage” (Motorola, 2008). RFID should be used to catalogue a history of
the food throughout the manufacturing and distribution channels.
Customer
Relationships are also critical to mitigate risk, including the retail
level. American consumers often rank
convenience over price resulting in widespread contamination. If a consumer
were to buy a bag of ready to eat clean and cut salad mix instead of a head of
lettuce, instead of one family affected by contaminated lettuce you could
potentially have a food contamination illness in epidemic proportions.
Recordkeeping is critical throughout the supply chain.
The Importance of
Documenting
Formally
documenting a recall plan is critical to establishing commitment and adoption
of the agreed processes and procedures to mitigate risk and initiate a recall
claim. “Effective risk management requires documented policies and procedures
that identify how a product will be handled throughout the supply chain”
(Creedle, 2007). Documentation should
include the processes for quality of goods received, the manufacturing process
identifying procedures for quality control testing at critical checkpoints, how
complaints are handled, and what to do in the event of a recall. By establishing corporate goals and ethical
guidelines, in the event of a crisis the plans can be immediately implemented
reducing loss.
By implementing
and documenting a recall team identifying individuals, their roles and
responsibilities in the event of a crisis will eliminate delays and confusion
while reacting to an event situation.
Roles to consider while planning a team response would be “decision
making, quality assurance, technical advisor, media communications, complaint
investigations, contacting customers, contacting regulatory agencies, and legal
counsel” (Food Software Advisor, 2012).
Documenting
consumer complaints is critical in the recall process to limit risk and
exposure to consumers, utilize information to improve processes or uncover
critical facts, and control potential losses.
Some critical points to record would be the bar code information on the
product itself identifying lot, block, expiration, and any other pertinent
information from that code.
Additionally, a person investigating the complaint should document where
the product was purchased, how the consumer stored and handled the product.
“Every recall
plan should include a step-by-step explanation on what to do when a product
needs to be recalled” (Food Software Advisor, 2012). Developing a communication log identifying
all contacts with vendors, suppliers, and any other stakeholders will be
critical information for any government investigations, consumer law suits, and
will provide the organization valuable data that can assist in continual
process improvement initiatives.
Product Recall Training
Product recall
training is a critical component to improving the recall process. By educating staff on their roles and
responsibilities throughout the organization, and identifying a recall team to
take the lead will help employees manage recall efforts in their area of
responsibility.
Prevention is
always preferable, but even with the best plans and controls in place there is
always risk of a recall. To prepare
employees and gauge the efficacy of documented crisis management plans, a
company may consider conducting mock recall training. With a mock recall, the company will be
provided an opportunity to test their plan, their inventory tracking system,
communication logs, as well as the processes throughout the recall. A mock recall can uncover deficiencies in the
plans and identify opportunities to improve recall strategies.
Conclusion
Maple Leaf food
experiences significant losses greatly attributed to the lack of planning and
quality control checkpoints. The
organization was forced to react to a crisis event, rather than a position of
control to manage the event a limit loss.
Wegman’s food
stores has a vendor management specialist that maintains vendor relationships
and ensure the quality and safety of products sold. This assists the grocer in identifying recall
items as well as making business decisions pertaining to independent recalls in
the event of an unconfirmed contamination, labeling, or food quality
concern. A recall coordinator is in
place that initiates immediate response removing products from the shelves in
retail locations and distribution centers throughout their entire
footprint. The company takes the lead by
educating customer service about the recall and prepares them to respond to
consumer questions or concerns. The
retailer also provides information on their company website. If a consumer has maintained correct contact
information, the customer relationship management software identifies which
consumers purchased recall products and initiates an automated phone call and
email with return instructions.
Automated phone calls are limited to confirmed cases of food
contamination that could cause a health concern.
A well designed
and documented food recall plan must be an extension of day to day operations management. Knowing a vendor and maintaining a
relationship is critical to mitigating potential risk and improving quality of
product. Inventory management, tracking,
and customer relationship management will assist in facilitating communications
to expedite the recall of foods limiting both consumer health and
financial. Testing crisis management
plans and training staff on their roles and responsibilities in a food safety
and product recall incident will be beneficial.
Training will instill confidence and uncover deficiencies that will
ensure an organization is not on acting quickly to respond to a public health
incident, but to control and manage the incident limiting loss.
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