BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.

Business Standards > Articles

Feeding the food chain

28 May 2008
Topics: Food safety, ISO 22000, Supply chain, BRC, Social accountability, SA8000, Sedex

Eating habits have changed dramatically in the last 15 years. From winter strawberries to ready meals, satisfying public demand for the exotic - and even the not so exotic - involves increasingly complex food supply chains.

Catering to these changing public appetites creates new opportunities for the food industry, but there are new risks too. Effective management of those risks, particularly ones associated with extended supply chains, means understanding exactly what's going on in the food market. And the picture is a complex one.

"There are a number of changes as far as food and food markets are concerned," says Dr Geoff Spriegel, director of Global Standards and Technical Services with the British Retail Consortium (BRC). "The market is becoming more global and supply chains are now much longer than they used to be. The problem is that the greater the distance from the point of production to the point of retail sale and consumption, the greater the risk."

The processed foods we eat are becoming ever more complex and traceability of ingredients is now a major challenge. Without proper controls at every level, problems can quickly cascade - not just through one supply chain, but many. The Sudan 1 scare of 2005 illustrates just how easily and quickly that can happen.

Sudan 1 - a banned red food dye - was found in chilli powder used to make a sauce. This sauce, in turn, was widely used as a flavouring agent in other products. The astonishing extent of its use soon became apparent: more than 350 products, including items of processed food from most of the major food retailers, were found to contain the rogue ingredient in the UK alone, triggering a nationwide recall of products from shepherd's pies to sandwich fillings.

"Minor ingredients can have a major impact on the integrity and safety of food," stresses Dr Spriegel. "Complex foods contain a wide range of ingredients and that creates major challenges in terms of getting full traceability."

Scares like Sudan 1 have played a big part in boosting demand for additive-free food, as have worries about salt, sugar and fat. But for food producers and retailers, the battle to provide food that is both additive-free and tasty has seen an increased reliance on so-called fresh convenience foods.

In many cases, these foods require precise temperature control from the point of manufacture right through to the supermarket shelf. Safe management therefore requires a tightly supervised supply chain.

"As customer demand drives the elimination of additives such as preservatives and reduction in salt for health benefit, greater emphasis is placed on the chill chain and the associated disciplines this involves," says Dr Spriegel.

New eating habits are driving food companies into unexplored territory. The public is now more aware of the provenance of food - and increasingly willing to ask questions about where it's come from.

"It is not only the safety and quality of the food, but about where it's produced and under what circumstances it's produced," says Dr Spriegel. "That feeds through in terms of issues such as pesticide residues and animal welfare issues, and into broader questions about environmental impact and ethical trading."

As food supply has become more complex, it's become increasingly difficult for individual companies to police their supply chains themselves. At the same time, obligations to consumers have increased: under EU law, retailers and brand owners have a legal responsibility for their brands. When things go wrong, passing the buck up the food chain is not an option.

The need for a systematic approach to food safety - one that protects both consumers and businesses - is the driving force behind a number of international safety-related standards, including the Global Standard for Food Safety from BRC and ISO 22000 Food safety management systems.

ISO 22000 defines the requirements of a food safety management system. It allows companies to consolidate compliance with existing standards, and fills the gap between Hazard Analysis Critical Control Points (HACCP) and ISO 9001 to create a comprehensive and certifiable food safety management system.

With an emphasis on interactive communication and traceability right through the supply chain, ISO 22000 overcomes the difficulties associated with differing national food safety standards. And because food production is an increasingly global affair, ISO 22000's worldwide recognition is a key benefit.

Independent third party certification of a food safety management system allows a company to demonstrate its commitment to good practice. For a manufacturer of ready meals, for example, certification provides valuable reassurance to customers, such as supermarkets, because it embodies most of the current retailer food safety standards.

Safe foodstuffs

Food safety is one part of the risk picture, but it's not the only one. The influence of external factors - such as energy price hikes - is a reminder that no supply chain is bullet-proof. In the last 12 months, oil costs have leapt more than 60 per cent; wheat has risen by more than 100 per cent. Increases such as these have sent shock waves right through the supply chain and mean higher grocery bills for everyone.

Businesses can't do much to insulate their customers from macroeconomic realities like these. But they underline the need to consider the bigger picture - and that includes food security. The vulnerability of supply chains to external factors is underlined in an independent report published on behalf of Defra, the government's food and environment department, in 2006.

The report - Resilience in the Food Chain - found that while most food businesses were pursuing risk management programmes, business continuity management (BCM) was still in the early stages of implementation. Few companies, the report revealed, had moved beyond reactive crisis management to proactive or preventive BCM.

"As retailers become more dependent on a more limited and, in some cases, a dedicated source of supply, business continuity is going to become increasingly crucial to ensure continuity of supply in times of crisis," says BRC's Dr Spriegel.

The Defra report noted that many food businesses were not aware of the tools available to manage business continuity. In fact, there are a number of standards that can help businesses to operate more efficiently, and to help them keep operating when things go wrong.

These include BS 25999 Business continuity management, which provides a common framework and improves resilience, and ISO/IEC 27001 for information technology, which focuses on the security of critical information systems. Organizations can be certified to both these standards. The recently introduced BS ISO 28000 Specification for security management systems for the supply chain also provides valuable assistance, particularly for logistics businesses.

Certification to standards such as ISO 22000 and BS 25999 represent the gold standard of compliance. But in some cases, particularly where suppliers are based in developing countries with little or no tradition of standardization, driving through a certification-based approach to compliance is not always the most effective approach, at least to start with.

BSI Management Systems' new Global Second Party Compliance solution addresses this and other issues. Due to launch in May 2008, it's a powerful, tailor-made risk management product for large multinational organizations, and it's one that's unique in the industry.

"Suppliers in some countries are not ready for third-party certification," explains Joy Franks, global product manager with BSI Management Systems. "This solution offers an intermediate compliance audit. The checklist we audit against will either be of known standards, such as food safety, information, quality, environment, and health and safety, or against a company's own codes of practice or standards. We can tailor the solution to what the client wants."

Global supply chains allow businesses to offer an ever-increasing range of products. But they also create new threats. Suppliers might deliver on time and within budget - but if they're not running their own businesses ethically, the consequences can be disastrous for well-known brands and retailers.

Global Second Party Compliance helps businesses to monitor and manage the working practices of their suppliers - and that means it's attractive for companies with extended supply chains. It can also be used to monitor a company's own working practices, so it's valuable for big organizations with multiple sites needing regular checks.

"It's an end-to-end solution," says Franks. "We will go to a client and assess their supply chain or inter-company manufacturing sites against set criteria. We will then come up with the audit schedule for how often audits need to be done and against which standards." These can include checks against the internationally-recognized social accountability standard, SA8000 or other recognized ethical trade audits such as the Supplier Ethical Data Exchange (Sedex) and the Business Social Compliance Initiative (BSCI). BSI has recently been approved by Tesco to carry out Sedex audits.

Audit results are uploaded to the BSI Portal, a unique, client-specific website that allows individual companies to view relevant assessment reports online. Logging on to the secure BSI Portal allows firms to access dashboard scorecards for supplier and site compliance, with drill-down detail for non-conformities. Potential problems are flagged up immediately.

As the supply chain takes on ever-increasing importance beyond the boundaries of business, it's essential that controls are in place. Under the circumstances, finding the right standards for the job could make a world of difference.

>>CASE STUDY: Ready for anything?

Many of the conventional compliance-related hazards that food businesses face are predictable to some extent. But what about threats that cannot be so easily predicted? From criminal extortion to ideologically motivated attacks, businesses need to prepare for the unexpected.

PAS 96 Defending food and drink is a new Publicly Available Specification that provides food industry operators with guidance on the deterrence, detection and defeat of malicious attacks on food and drink.

"It's about threats that are not expected," explains Anne Hayes, BSI's head of market development - sustainability. "You can guard against salmonella and you can have controls in place to prevent food poisoning or somebody being injured. But something that is totally unforeseeable, like somebody maliciously contaminating a factory production line, is something that's quite difficult to act against and isn't covered in HACCP."

The new guidance - which allows companies to build on existing HACCP protocols - is applicable to food businesses of all sizes, and it's likely to be of particular value to managers of small and medium-sized firms who may not otherwise have access to specialist advice.

The risks today are real, but thanks to robust standards and rigorous audits, the food we eat today has never been safer.

For more information: www.bsigroup.com/may08pas96

>>CASE STUDY: Swagelok Company Global Second Party

Compliance is a unique end-to-end solution that allows large multinational organizations to manage risks across multiple sites and supply chains.

But it's not just about risk management. It also allows companies to drive business rules right through the supply chain - and through their own organizations too.

Swagelok Company, a leading US-based fluid system manufacturer and distributor, is among the first major customers for Global Second Party Compliance. Swagelok has annual sales of approximately $1.1 billion, with more than 200 authorized sales and service centres in 57 countries.

Global Second Party Compliance assists Swagelok in its management of SQS, the company's global quality control system.

"It's the tool we use to ensure that all of our distributorships are compliant to specific Swagelok requirements," explains Lawrence Kohler, quality improvement leader with Swagelok.

As well as managing quality controls within the business, Global Second Party Compliance helps Swagelok to manage supplier compliance as well, with worldwide auditing carried out by BSI Management Systems. The independence of BSI's compliance assessments helps to reinforce customer confidence.

"It really lends credibility," says Kohler.

For more information: www.bsigroup.com/may08supplychain

Business Standards © 2008. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.

Question: We are under increasing pressure to comply with a growing number of regulations and to maintain growth - while under greater scrutiny than ever before. How can this be good for business?

We are all in the risk management business. In the current climate, as consumers we are encouraged to claim compensation or sue for damages for almost any negative incident we encounter.

Read more

Have a standards-related question for BSI or a comment on the website? We'll find the right person to answer.