Chapter 4: Supplier safety assessment in the food supply chain and the role of standards – Delivering Performance in Food Supply Chains

4

Supplier safety assessment in the food supply chain and the role of standards

D.M. Julien,     Cranfield University, UK

Abstract:

Food supply chains of today are increasingly global, with organisations having to source materials from outside traditional boundaries in order to remain competitive. Additionally, the interconnectivity of these global supply networks can mean that a problem in one country often results in a global crisis. These and other trends bring with them many challenges that need to be managed to safeguard the end consumer. The safety and quality of the finished product is dependent on the integrity of the entire chain from the farm to the fork, which requires systems and approaches to be in place to ensure that there are no breaks or deviations that will result in adverse effects further downstream. This chapter will review an approach to evaluating and assessing suppliers in the food sector, advances in the sector in order to harmonise standards globally with the introduction of ISO 22000 and the Global Food Safety Initiative (GFSI). Also included are examples from industry of a number of approaches followed.

Key words

supplier evaluation

supplier assessment

supplier audits

food and beverage sector

ISO 22000

GFSI

standards

quality management

food safety

HACCP

4.1 Introduction

Supplier selection, assessment and ongoing evaluation is of paramount importance to the food and beverage sector. In particular, the control of issues relating to food safety is key at all stages of the supply chain, as bad practices on the farm can result in contamination of the finished consumer product if the problem is not detected. Food safety is always at the heart of any supplier evaluation process in the sector as it is the minimum requirement that must be met at all stages of the process. Non-compliance issues in this area will result in large public recalls which are extremely damaging to the brand and potentially to the business.

The global marketplace of today, where food processors and retailers are having to source materials from outside traditional boundaries in order to remain competitive, brings with it many challenges that need to be managed to safeguard the end consumer. This shift away from small traditional/local manufacturers with local supply chains to a dispersed network of companies with a global manufacturing and supplier base has been the result of a diverse set of business drivers such as reduced costs, growth potential, access to new markets, competitive pressures and access to qualified personnel.

Understanding local cultures and regulations is fundamental to avoiding the pitfalls that come from assuming that product and process requirements are interpreted consistently and will operate in the same way. Careful translation of specifications and the transfer of intrinsic knowledge to new partners is vital. Given the interconnectivity of supply networks today, a problem in one country often results in a global crisis, as evidenced by the recent melamine in milk scandal (BBC, 2008a).

The problem shows how big food companies can struggle to impose food safety standards on suppliers in the developing markets they increasingly rely on for sales growth. (Patrick et al., 2008)

One lesson learned from this and other examples is the importance of understanding your supply base, knowing where the risks are, and having confidence in the suppliers’ practices and monitoring their ongoing performance. Midler (2007) discusses what he calls quality fade on products from some Chinese subcontractors where the quality is deliberately reduced to increase the profit margins on the products. One of the reasons for this is the lack of effective government controls and the overwhelming short-term view held by many manufacturers where their future existence is always in question. Despite these problems, organisations cannot turn their backs on China or other developing economies as their long-term growth and competitiveness will involve understanding how to operate and manage their supply chains in these countries.

Whether a company views China as a manufacturing base, an attractive market or both, world-class execution will be necessary to succeed, and success in China will be needed to survive not only there but around the globe. (Hexter and Woetzel, 2007)

The current trend of tiering the supply base in parallel with the reduction in the number of core suppliers who interact with the focal company helps to reduce the management burden for the focal company. In parallel supply networks have become more complex in the last few years partly owing to the increased levels of outsourcing and offshoring of key stages in the manufacture of products to low cost countries around the world (Christopher, 2005; Harland et al., 2003). So whilst the focal company may be interacting with fewer suppliers they tend to be located globally and may also be managing critical materials flows into the company that were previously managed by the focal company.

This transfer of responsibility into the supply network depends on the suppliers at all levels of the network acting in an ethical manner and accepting responsibility for their part of the chain, it also assumes that legislative bodies in the new economies have the expertise and capability to regulate the sector to the required level. Recent crises in the sector have illustrated that this is not always the case and there is room for improvement in the management and development of the supply base to the appropriate level.

Despite a nationwide campaign to raise food safety standards and reassure consumers, China’s broken-down food safety inspectorate is still failing to catch and report lapses in standards when they happen. (BBC, 2008b)

The safety and quality of the finished product is dependent on the integrity of the entire chain from the farm to the fork requiring systems and approaches to be in place to ensure that there are no breaks or deviations that will result in adverse effects further downstream.

Various approaches to evaluating and assessing suppliers in the food sector will be reviewed. Additionally, advances in the sector to harmonise standards globally by the introduction of ISO 22000 and the Global Food Safety Initiative (GFSI) and their importance in reducing waste and improving food safety will be considered.

4.2 Material risk assessment

Understanding food ingredients and the variances among them is a must in order to ensure food quality and safety. (Stier, 2006)

An important precursor to the sourcing decision for any material used in the manufacture of food and beverages is to complete a risk assessment of the material. The risk assessment should include the inherent food safety risk of the material, the planned use of the material and the nature of the operation. The planned use of the material is important, as further processing may eliminate certain hazards that may be present and so it is less of a concern, compared to a material which will not be processed any further and used in the assembly of the final product. Good examples of this can be found in the chill chain where materials are purchased in and used directly in the assembly of fresh sandwiches and salads (CFA, 2006).

Alternatively, the same material used in two different products can have a very different level of risk associated with it because of the target group of consumers, for example milk powder for infant formula is assessed as high risk compared to milk powder blended and processed into a yoghurt.

The risk classification of the material is independent of the supplier. Many companies use three different classifications for materials: high, medium and low risk. Table 4.1 illustrates the various risk categories for a range of raw and packaging materials based on examples from both large and medium sized food manufacturers.

Table 4.1

Examples of risk categories for different raw materials

The Chilled Food Association (CFA) (2006) in the UK has developed a decision tree to help its members to target their supplier quality assurance resources at the riskiest raw materials. In many of the larger food companies a network of material experts are being developed as an important internal competency; these material experts provide key support for the regional purchasing groups. The material experts are responsible for scanning the environment to stay up-to-date on the latest developments related to their particular incoming material group. In addition, they codify their knowledge in the form of material-specific lists that will be shared with assessors and other concerned groups. The material experts typically participate in the assessment of the key suppliers for their material whenever possible as this helps keep them in touch with current practices in the supply chain and they may also be more likely to identify possible innovations at the supplier site. On the other hand they are also better able to spot possible deviations from the norm that need to be managed. The selection of these individuals should take into consideration both their technical expertise and their communication skills.

4.3 Supplier assessment and management

Food processors need a well organised and rigid vendor quality program, which includes a vendor selection and approval process. (Stier, 2006)

The management of the inbound quality of materials is concerned with the sourcing, evaluation and selection of suppliers, provision of education and training, monitoring of supplier performance and supplier certification. The supplier management process involves individuals with a range of functions who are in contact with suppliers. Stier (2006) emphasises the importance of purchasing, quality and technical staff being involved as their skills complement each other and provide for a more thorough evaluation of the suppliers. The following functions tend to be core of any supplier management team:

• quality

• purchasing

• manufacturing.

Suppliers must be very carefully selected. The purchasing function typically evaluates the business-related factors such as:

• management structure and competence

• financial situation

• ownership of the company and

• business reputation of the company.

Purchasing will also determine if the supplier’s offer is competitive and makes good business sense for the company. Depending on the material that the potential supplier will be providing, the technical know-how of the supplier also needs to be evaluated. At this point, the quality and manufacturing functions take the lead role in the evaluation of the supplier’s:

• manufacturing capabilities

• quality assurance system

• technical capabilities

• HACCP (hazard analysis and critical control points) study and

• openness and acceptance of assessments and inspections.

In addition, individuals from the research and development, regulatory affairs, agricultural services and new product introduction departments are often required to interact with suppliers, depending on the business requirements.

The total system cost approach implies that when negotiating with a supplier, the focus is not just on the price of the material being purchased (Mangan et al., 2008). Other aspects that add value should also be taken into consideration. Examples of these value-adding aspects, which are harder to quantify are:

• performance of the material on the line

• high quality in terms of food safety

• consistency of the material delivered

• flexibility in meeting delivery requirements

• potential to grow with demand.

The purchasing department is also involved in the selective development of partnerships with certain suppliers in order to develop unique solutions that provide a competitive advantage and mutual benefit for both parties. As in any sector, companies will need to have a process defined for the assessment of new and existing suppliers in their supply network. The most common approach currently taken for new suppliers is to send the prospective supplier a self-assessment questionnaire for completion and return to the focal company; see Fig. 4.1 for an outline of the process.

Fig. 4.1 New supplier assessment process.

Whilst the questionnaire differs between companies, it tends to cover similar topics and the type of information that is requested from the supplier is similar, see Fig. 4.2. Typically at the core is a strong focus on issues relating to food safety with additional details about the business and commercial aspects. Where the focal company has no first hand experience with new suppliers, it is important at this point to ascertain what other companies they supply and what certifications they may already hold to give a sense of the level of their operations. For existing suppliers it tends to be more of an updating exercise in case of changes, either in the products that they supply or to the process.

Fig. 4.2 Focus areas for self assessment questionnaire.

Based on the supplier’s track record and review of the completed questionnaire, a confidence level is assigned to the supplier. Different companies have different naming conventions, be it A, B, or C grade suppliers, or high, medium or low level suppliers. One definition used for the latter of these conventions is as follows:

• High confidence supplier: a supplier previously assessed and formally approved, supplying materials corresponding to the agreed specifications and general conditions, with reliable deliveries and rapid positive response in case of deviations.

• Medium confidence supplier: a supplier previously assessed and formally approved, where deviations from agreed specifications or the general conditions have occurred but the response to complaints has been positively dealt with, or suppliers for whom a previous assessment revealed requests for corrective action(s).

• Low confidence supplier: suppliers that do not totally meet our requirements or have lost our confidence, but which, owing to a lack of alternatives, we are forced to use.

The importance of assessing the suppliers is emphasised by the CFA (2006) as the way to safeguard the safety and quality of the products. It is also recognised that this involves the effective combination of different approaches from on-site audits either using internal auditors or third party auditors and self-assessment questionnaires and certificates of analysis (CFA, 2006).

Depending on the outcome of the review of both the risk level for the material sourced and the supplier ranking, the sourcing company will decide if an on-site audit is required and, for existing suppliers, the frequency of the re-audits. The decision whether or not to visit the supplier for an on-site assessment should also take into consideration the time lapse since the last visit made to the site, whether this is a new supplier, whether the supplier has already been approved by another large food manufacturer and, in the case of existing suppliers, the track record of their performance.

One example from a leading manufacturer is provided in Fig. 4.3, which maps the material risk onto the supplier confidence level to determine the most appropriate approach to their control and management.

Fig. 4.3 Material risk versus supplier confidence.

At this point if an audit is required the focal company will need to decide who will carry out the audit. Similar to many other internal functions, numerous companies have opted to use third party auditors instead of maintaining and developing the resource internally. However, most of the larger organisations will maintain a small in-house auditing function for certain types of audit and outsource the less critical audits to the external auditor.

A Kraft Foods spokesperson says that the company’s auditing program is integral to its food-safety program. All of Kraft’s suppliers must meet its ‘Supplier Quality Expectations’ and are audited before the company buys the ingredients. Across global operations, the company uses internal and external auditors, depending on the circumstances. (ASQ, 2008)

4.4 Hazard Analysis and Critical Control Points (HACCP) overview

The HACCP concept is central to most supplier assessment and certification schemes. HACCP is an international approach followed by the food sector. It is a system of process control that was developed by the National Aeronautic and Space Administration (NASA) in preparation for space flight and has been adopted in many industries. HACCP is designed to ensure product safety and is a preventative approach to food safety that addresses physical, chemical and biological hazards that would result in the product being unsafe for human consumption; it is seen as a means of prevention rather than finished product inspection.

HACCP is built around seven key principles (HACCP, 2008):

• Principle 1: Conduct a hazard analysis.

    Processing plants need to identify any food safety hazards related to their operations that must be prevented, eliminated, or reduced to an acceptable level.

• Principle 2: Identify critical control points.

    A critical control point (CCP) is a point, step, or procedure in a food process at which control is essential to prevent or eliminate a hazard or to reduce it to acceptable levels.

• Principle 3: Establish critical limits for each critical control point.

    A critical limit is the maximum or minimum value to which a physical, biological or chemical hazard must be controlled which separates acceptability from unacceptability.

• Principle 4: Establish critical control point monitoring requirements.

    Effective monitoring activities are necessary to ensure that the process is under control at each critical control point. It is normally a requirement that each monitoring procedure and its frequency be listed in the HACCP plan.

• Principle 5: Establish corrective actions.

    These are actions to be taken when monitoring indicates that a critical control point is not under control.

• Principle 6: Establish record keeping procedures.

    Food regulations require that all processing plants maintain documents which demonstrate the effective application of the measures outlined in the HACCP plan. In addition to the HACCP plan, records documenting the monitoring of critical control points, critical limits, verification activities and the handling of processing deviations should also be maintained.

• Principle 7: Validation of the HACCP system:

    Validation of the HACCP plans ensures that the processing plants do what they were designed to do and are able to ensure the production of safe product.

The HACCP plan aims to map out the entire process and for every stage or step of the process to identify if there are any hazards associated with it. If there is a hazard, it is either classified as a critical control point (CCP) or as just a control point (CP). Once they are all classified, the team will try to understand what are the necessary controls to put in place and the limits for each one. When this has been completed, monitoring and corrective action plans can be put in place. Manning and Baines (2004) have highlighted that globalisation of food supply chains has led to an increase in food safety risks, which increases the likelihood of pandemics of food-borne disease and that HACCP is an essential approach for assessing and managing these inherent risks. In a special report, the FAO/WHO (2002) also reinforce the importance of HACCP and other risk assessment tools in particular for developing nations.

The application of HACCP and risk assessment concepts in recent years are leading to fundamental changes in the approach to food safety. (FAO/WHO, 2002).

4.5 Supplier audits and performance management

Manufacturers have a responsibility to manage their suppliers, to collaborate with the key suppliers to look for possible improvements and also to work with weaker suppliers to eliminate any non-conformities (Humphreys et al., 2001; Chin et al., 2006). The performance of the company’s suppliers will influence customer satisfaction and ultimately long-term market success. Most practitioners view supplier performance as contributing to enhancing the competitive advantage of a firm and it has become key to achieving good quality leading to a world-class success (Lemke et al., 2003).

We want our relationships with suppliers to be mutually beneficial, and to buy from companies that have high standards. We apply very stringent food safety and quality assurance processes across all of our product range. All of our suppliers must meet our requirements to ensure our customers get fresh, wholesome food they can trust from our stores. (Tesco, 2008)

The frequency of re-evaluation of the supplier is dependent on both the supplier and the material classification (see Table 4.2 for an example from one small company). Most companies will express a target frequency for auditing suppliers in their quality manual.

Table 4.2

Audit planning

However, owing to the thinning out of internal audit capabilities, companies recognise that many of their subsidiaries are unable to perform audits of all their suppliers in a timely and regular fashion. This will result in the purchase of raw materials from suppliers who have not been audited on a regular basis. The focal companies in general consider this situation to be undesirable and extremely risky for the safety of their products and, as such, their business and brand. To solve this problem, many organisations are engaging the services of an external auditing body to perform supplier audits on their behalf. The increasing use of external auditors to perform the crucial activity of supplier audits needs to be managed and monitored to ensure that the company’s supplier management is more robust than before.

In one large global food manufacturer the approach taken was to select two third party auditors to partner globally and to work with the companies to agree on the content and style of the audits performed on the company’s behalf. In addition, it was recommended that all suppliers of high risk materials and suppliers who are key, owing to the volume of business, should be audited by internal company auditors and not the third party auditor.

Once the audit is complete the report needs to be reviewed and action taken where necessary. The findings from the assessment are classified into the following categories:

• Compliance: no non-conformances reported

• Minor: a sub-section of the audit document has not been fully met but this would not affect the quality or safety of the product being supplied

• Major: a failure to comply with any sub-section of the audit document or a situation that would raise significant doubt about the safety or quality of the product being supplied

• Critical: is a failure to comply with a food safety or legal issue or a fundamental requirement within the audit document.

Depending on the list of findings, their classification and their quantity, the focal company will adapt the way of working with the supplier to accommodate these differences. An amalgamation of approaches from several food companies is presented in Table 4.3.

Table 4.3

Audit actions

Findings Action
Compliance No action required
Minor Corrective actions fixed according to a defined action plan, for completion within 4 weeks
Evidence of corrective action required (photos, copies of documents, etc)
Follow-up in 1 year
No additional or special controls need to be implemented before sourcing from them
Major Undertake corrective action within 4 weeks
Corrective actions fixed and should be completed as soon as possible, but in not more than 6 months
Evidence of corrective action required (photos, copies of documents etc)
Follow-up in 3–6 months
Detailed list of the deviations and the potential hazards and financial impacts to control or compensate for each one should be made
Proactive joint improvement plan, or search for alternative sources or development of the supplier base with the goal to replace current supplier
Supplier not approved until corrective action evidence received (new suppliers)
Critical Food safety problems
Undertake corrective action immediately
Supplier should not be used until non-conformance eliminated
Supplier not approved (new suppliers)
Re-audit required before supply can start

Once the supplier has been approved and supply has started the focal company puts in place an appropriate monitoring plan for the supplier. This includes decisions about sampling frequency, where the sample is taken (at the supplier or on receipt), use of external laboratories for producing ‘certificates of analyses’ (COAs), what is being tested for and the method of communication with the supplier about their performance. The majority of companies have performance metrics which track quality (including microbiological issues, foreign bodies, plus other defined quality criteria for the material), on-time delivery and delivery in-full type measures. These three measures are core and apply to any supplier, however, there could be other measures that are linked more to the type of relationship with the supplier, for example, if there is any joint new product development.

4.6 Impact of globalisation and need for a global standard

Increasingly competitive global marketplaces are forcing manufacturers constantly to look for ways to increase and sustain their competitive position. The pressures of globalisation emphasise the need for businesses to overcome cost pressures and improve efficiency throughout their supply chains. Cost reduction is the most quoted benefit of global sourcing (Fagan, 1991; Kohn, 1993; Rajagopal and Bernard, 1993). However, there are many other benefits that can be attained through global sourcing including access to new markets, higher quality goods, access to worldwide technology, better delivery service and better customer service (Birou and Fawcett, 1993; Scully and Fawcett, 1994). The successful implementation of a global sourcing strategy is therefore paramount for manufacturing supply chains in order for businesses to achieve their full potential. The removal of many of the trade barriers between countries has also contributed to this phenomenon by allowing the free movement of goods and services across borders. The EU, EEA and NAFTA are good examples of the types of economic regions that are driving the optimisation of supply chains. The removal of trade barriers has allowed large global organisations to rationalise and optimise their manufacturing and supplier base globally, leverage their purchasing power and streamline their logistics networks.

A study carried out by Lewin and Peeters (2006) reinforces the reasons provided for offshoring and highlights the opportunities for growth as one of the key reasons. Certainly the benefits for companies following this route are many but it is important to understand that it brings with it an increased risk to the operating companies. Harland et al. (2003) make the point that risk in supply chains today is far greater than it has been in the past and that there is a need for companies to address these risks. One difficulty is that the risk is shifting around the supply networks and may lie outside the company’s direct control. Understanding the challenges faced by food manufacturers to manage the quality of their inbound materials, because of today’s highly outsourced and offshore supply chains, cannot be underestimated. Companies need to consider the impact on their business of moving production offshore to low cost economies due to different cultures and their interpretation of requirements, language barriers and the increased physical separation of customer and supplier. Once the challenges are better understood, it should be possible to make recommendations about how to manage them better.

The food sector has seen a huge growth in the number of certification and company standards which organisations along the supply chain need to be audited against if they plan to grow their business. Figure 4.4 represents some of the plethora of standards for which organisations operating or supplying to the UK would need to be accredited, depending on their particular customer requirements.

Fig. 4.4 Standards proliferation.

This type of proliferation of standards is not unique to the UK market and similar patterns are observed around the world. A number of countries have developed their own national standards for the supply of safe food. In addition different companies and groups within the industry have developed their own standards for auditing their suppliers. The end result is a proliferation of standards in the food supply chain internationally. The problem with this lack of a single truly internationally accredited and recognised standard is that each of these individual schemes is perceived as being superior by its sponsor country or organisation.

This all leads to lots of confusion in the marketplace over the exact requirements for the suppliers, uneven levels of food safety globally, increased cost and complexity for the suppliers who find themselves obliged to conform to different standards and programmes and disruption to the business activities owing to audits several times a year by different groups. Two groups responded to the need in the marketplace for harmonisation across all the standards and introduced two global standards; the Global Food Safety Initiative (GFSI) launched in May 2000 and ISO 22000 which was ratified in September 2005.

4.7 Global Food Safety Initiative (GFSI)

The Global Food Safety Initiative (GFSI) is coordinated by CIES – The Food Business Forum. It has a retailer-driven board that includes some advisory members from manufacturers (CIES, 2008a).

The GFSI vision of ‘once certified, accepted everywhere’ has now become a reality. Carrefour, Tesco, Metro, Migros, Ahold, Wal-Mart and Delhaize have agreed to reduce duplication in the supply chain through the common acceptance of any of the four GFSI benchmarked schemes. (CIES, 2008a)

The GFSI mission is to work on continuous improvement in food safety management systems to ensure confidence in the delivery of food to consumers (CIES, 2007a). The GFSI objectives (CIES, 2007a) are to:

• maintain a benchmarking process for food safety management schemes to work towards convergence between food safety standards;

• improve cost efficiency throughout the food supply chain through the common acceptance of GFSI recognised standards by retailers around the world;

• provide a unique international stakeholder platform for networking, knowledge exchange and sharing of best food safety practice and information.

The GFSI approved schemes consist of three key elements which cover the range of food safety management criteria: food safety management systems, good practices and HACCP (CIES, 2007a), see Fig. 4.5.

Fig. 4.5 GFSI key elements.

The four currently recognised manufacturing schemes included in the GFSI are (CIES, 2008a):

• BRC – British Retail Consortium Global Food Standard (Version 5)

• Dutch HACCP (Option B)

• IFS – International Food Standard (Version 5)

• SQF 2000 – Safe Quality Food Program (Level 3).

The growth of the GFSI standard was in response to increases in the numbers of private label products, which brought about collaboration between retailers and manufacturers on the development of shared standards.

Wal-Mart has announced that suppliers of its private label and other food items, like produce, meat and fish, must comply with Global Food Safety Initiative (GFSI) recognized standards. (CIES, 2008b)

4.8 ISO 22000 – food safety management systems

The international food safety management standard, ISO 22000, was developed in response to a need for a worldwide standard supported by an independent, international organisation, which would encourage harmonisation of national and private standards for food safety management (CIES, 2007b). The development of the standard was undertaken by a working group whose members represented mirror groups of 23 national standard bodies and other organisations with liaison status. The participating countries included Japan, United States, Australia, Canada, Korea, Malta, Belgium, Greece, United Kingdom, Germany, France, The Netherlands, Thailand, Italy, Sweden, Denmark, Switzerland and Ireland. The participating organisations included the Codex Alimentarius Commission, the Confederation of the Food and Drink Industries of the European Union (CIAA), the International Hotel and Restaurant Association and the World Food Safety Organization (WFSO) (CIES 2007b). Unlike the GFSI standard, which was retailer driven, the development of the ISO 22000 standard gathered input from a much broader representation across global food chains. An international generally accepted ISO standard that integrated the necessary food safety principles with accepted quality management principles would also promote consensus in deciding the necessary elements of food safety systems for businesses in the food chain. Last, it would also be aligned with ISO 9001 in order to enhance compatibility with existing overall management approaches in the food businesses concerned (Frost, 2005).

The goal of ... ISO 22000 ... is to harmonize at a global level the requirements for food safety management systems throughout the food chain. (Pillay and Muliyil, 2005)

The standard defines food safety as the concept that foodstuffs should not be harmful to the consumer and recognises that food safety hazards can be introduced at any stage of the food chain. The standard would be applicable at all stages of the supply chain. Recognising that food safety problems can originate at any point in the supply chain, the standard requires that an organisation in the food chain takes into account the safety hazards to the consumer of the final food product and, if necessary, take measures to control those hazards. Companies that adhere to the requirements of the standard should have in place systems to support the effective communication and information exchange between all parties in the chain, so as to promote understanding of the risks at any particular stage in the chain as a whole.

Ultimately, ISO 22000 considers food safety as a joint responsibility that is principally assured by the combined efforts of all parties participating in the food chain and encourages effective communication of food safety issues to suppliers, customers and other relevant interested parties in the chain (Frost, 2005). The key elements of the standard (Færgemand and Jespersen, 2005) are presented in Fig. 4.6 and outlined below.

Fig. 4.6 ISO 22000 key elements.

• Interactive communication implies the communication of the needs of the focal company to organisations both upstream and downstream in the food chain.

• System management understands that the most effective food safety systems are designed, operated and updated within the framework of a structured management system and incorporated into the overall management activities of the organisation.

• Hazard control combines the Codex Alimentarius HACCP principles and application steps with prerequisite programmes which enhance and maintain operational conditions to enable more effective control of food safety hazards.

Numerous benefits have been linked to the introduction of ISO 22000. The most fundamental being that ISO 22000 has been designed to allow all types of organisations across the food chain to implement a food safety management system. These range from feed producers, primary producers, food manufacturers, transport and storage operators and subcontractors to retail and food service outlets – together with related organisations such as producers of equipment, packaging material, cleaning agents, additives and ingredients (Frost, 2005; Pillay and Muliyil, 2005). Figure 4.7 presents an example of the communication links supported between the focal food producer in the centre and the entire supply chain, and also with the shadow supply chain that provides key services and inputs to the core supply network and the linkages with the regulatory bodies and the end consumer.

Fig. 4.7 ISO 22000 communication links (adapted from Frost, 2005).

Other benefits include reduction in duplication and cost through the existence of one single internationally accepted standard. ISO 22000 extends the successful management system approach of the ISO 9001:2000 quality management system standard which is widely implemented in all sectors but does not itself specifically address food safety. The two standards are fully compatible and companies already certified to ISO 9001 will find it easy to extend this certification to include ISO 22000. Some additional cited benefits are:

• Traceability – identification of an organisation’s impact on food safety within the supply chain

• Control/reduction of food safety hazards

• Legal compliance

• Smooth conversion from existing food safety certifications

• Continuous improved business performance in line with the ISO 22000 food safety policy and objectives.

Another important consideration is the compatibility of the standard with existing schemes worldwide based on Codex guidelines for good manufacturing practices and HACCP. This includes many national standards from North American, European and Asian countries. An organisation with an existing food safety programme can incorporate the elements of ISO 22000 into their existing system by using a stepwise approach. All this makes ISO 22000 more than a set of standards as it helps organisations to develop by extending their reach, providing a more logical and structured approach to food safety management, to gain easier access to global markets.

Both GFSI and ISO 22000 have at their core the desire to reduce duplication of activities across supply chains and in so doing improve the efficiency of the chains and reduce costs. However, the difference in ownership will result in difference in the acceptability and the responsiveness of the two standards. Owing to the internationally owned nature of the ISO structure, any changes proposed to the board could be difficult and time consuming to implement, whilst the GFSI board consider that retailer-driven GFSI schemes will have a specific reactivity which helps meet market demand in a timely and efficient manner. That aside, the ISO 22000 standard has the support of governments and food authorities globally and will probably have a wider acceptance across the entire food chain.

4.9 Conclusion and future trends

There are numerous other trends and issues concerning food supply chains that may ultimately have an impact on the supplier base and how they are assessed. Numerous certification schemes exist and are emerging in response to increasing consumer and government sensibilities about environment and animal welfare.

The FAIRTRADE mark is an example of a niche that looks set to continue to grow in the coming years and requires suppliers of Fairtrade branded products to be certified in accordance with Fairtrade standards. Estimated retail sales of Fairtrade products globally during 2007 reached in excess of €2.3 billion, which represented a growth of 47% (FLO, 2008).

Organic food is another significant trend which is claimed to have become mainstream across Europe (CONDOR, 2005). The Condor report (2005) also reports that organic food represented less than 10% of the total food spend in Europe, but was forecast to continue to grow. Organic food and drink sales in the UK nudged the £2 billion mark for the first time in 2006, with a sustained market growth rate of 22% throughout the year (Soil Association, 2008). Based on research from eight EU member states, the motivations and perceived benefits for consumers of organic foods are very similar: improved taste, contribution to a healthier life and a beneficial impact on the environment and society are seen as the major benefits by consumers (CONDOR, 2005).

Many of these schemes have an impact on the farm and whilst we have seen some consolidation in the manufacturing end of the food supply chain, there is still an explosion of different schemes being introduced for primary producers upstream of the manufacturers. In addition, the focus of many of these schemes is not food safety-related but more focussed on organoleptic and sensory aspects of the food, that is better taste and social consciousness and animal welfare.

Changes in global food supply chains during the last 50 years have resulted in a large increase in the distance food travels from the farm to consumer, known as ‘food miles’, with its associated environmental, social and economic impact. Growing concern over this impact has led to a debate about whether to try to measure and ultimately reduce food miles (Smith et al., 2005). The question is will the global debate about social responsibility change behaviour on the ground or do the consumers now expect to have a year-round supply of produce and products, in so doing reinforcing the requirement on organisations to keep sourcing globally to meet the demand? This ultimately results in ever more complex supply networks that need to be managed.

In addition, despite all the progress made to-date, many developing countries are still at an early stage of evolution with respect to strengthening their food safety control programmes. National food safety policies may be limited in scope and food control systems may involve fragmentation and duplication. This results in them experiencing difficulties in prioritising and resourcing their work in relation to food safety. Global organisations need to understand these limitations when sourcing from countries that are less sophisticated in terms of the technical and scientific infrastructure needed to support the sector (FAO/WHO 2002).

Responsibility for protecting the consumer through the provision of safe food will always lie with the brand owner of the product. These organisations need to protect their brand identity through the careful selection and management of their supplier base wherever those suppliers are located. The benefits of global standards like both GFSI and ISO 22000 cannot be underestimated as they play a key role in reducing waste and inefficiencies in the supply networks and also provide a benchmark for suppliers to work towards which will result in better food safety.

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