Held at the Nice Acropolis Convention Center, February 25-28, the annual Global Food Safety Conference brought together food safety professionals from around the world. It provided a unique opportunity for specialists representing different sectors and regions to meet and share their innovative solutions to improving food safety.
During the event, SGS hosted a special session entitled, “Managing Supply Chain Risks – How Has the Food Industry Evolved in Recent Years?”
Held on February 28, the event featured a panel of experts drawn from leading stakeholders in the supply, retail and certification sectors. Moderated by SGS’s AFL Business Manager in South Africa, Donna Brown Crockart, the panel consisted of:
- Natalie Dyenson, Vice President, Food Safety & Quality, Dole Food Company
- Christine Summers, AGMM, Costco
- Thies Dols, Global Food Safety & GMP Manager at DSM
The special session addressed key questions relating to global food supply chains, including the ways industry is managing and mitigating risk in its supply chains and the extent to which regulations drive food safety culture around the world. The panel also discussed the latest methods being employed to identify supply chain risks and minimize their impact.
Donna began the discussion by putting into context the need to improve the food safety culture in our supply chains. Recent World Health Organization (WHO) figures on foodborne diseases showed 1 in 10 people will be affected by foodborne diseases a year, with 420,000 dying. She then reviewed figures that showed 85% of companies with global supply chain had experienced at least one disruption in the last year and that 90% did not quantify risk when making outsourcing decisions. The need for effective supply chain management systems is clear from these figures, to protect both businesses and their supply chains, and their customers.
Donna concluded her introduction by divulging the results of SGS’s recent survey into current global industry practices. Conducted in Q1 of 2019, the survey combined data from 290 participants, operating in 65 countries, and provided several indications of where supply chain management could be improved to promote better food safety practices.
Supply Chain Management Survey: Selected Findings
The survey found that food safety remained the number one priority for businesses (90%), followed by regulatory compliance (88.62%) and traceability (84.48%). Respondents also expressed the view that regulatory non-compliance had the greatest potential for negative impact on their businesses (70.7%), followed by quality performance (65.5%), food safety crises (63.1%), supply chain interruptions (59.3%) and food fraud (57.9%).
Worryingly, 87% of responders believed their company’s approach to supply chain risk management was “not very effective”, with the survey showing 46% of businesses focused only on Tier-1 suppliers and 68% relying on Tier-1 suppliers to manage their own supply chains. While 57% of responders did see a benefit in implementing a supply chain management tool, only 45% don’t currently employ such a tool.
These figures might contribute towards an explanation for why the industry has such low levels of confidence in its supply chain management practices: only 19% felt their system was effective at managing Tier-1 suppliers and only 8.3% reckoned it was effective at managing Tier-2 downstream. Only 13.8% of responders felt their system could effectively identify and assess risk in the supply chain, with 12.8% feeling their system offered effective risk management and mitigation.
Delegates were surprised to learn that only 28% of those surveyed felt their company employed a supplier selection and approval process that they would describe as “very effective”. 72.4% of respondents stated that supplier certification status was the dominant factor affecting supplier selection, higher than a commitment to quality and safety at 71.4%. Of less concern when selecting a supplier were internal quality and safety standards (48.6%) and technical expertise (47.9%).
The survey also demonstrated that the key obstacles to effective supply chain management were seen as being poor communication and collaboration (60%), poor supplier understanding of the required regulatory compliance (49%), an underestimation of risk impacts (47%), the cost of implementing supply chain risk management strategies (45.2%) and a lack of end-to-end visibility, traceability and transparency (44.8%).
Finally, the survey showed that 54.8% of responders intended to conduct risk audits of key suppliers to improve their supply chain management. In addition, 41% said they expected to create a supplier risk register, 35.9% planned to carry out formal mapping of their suppliers, and 25% would introduce a supply chain management system.
The take out of the session was that effective supply chain risk management strategies require the set up and implementation of appropriate processes and technologies to sense and respond to events as they happen. It requires the introduction of risk and visibility at the center of an organization’s supply chain strategy, allowing businesses to understand and mitigate risks while meeting regulatory and internal quality compliance requirements, as well as satisfying consumer demands for greater transparency.
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