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Overcoming Supply Chain Risks in the Food Industry

Food and Beverages | Friday, January 11, 2019

The supply chain in the food industry is evolving and becoming increasingly complex. Companies must understand the challenges they face and potential solutions to manage food security risks in today’s environment. Some of the key challenges include company organization and governance, recall management, marketplace evolution, a balance between cost reduction and risk mitigation, and difficulty in defining supply chains beyond tier one. These challenges should be addressed by companies so that they can proactively identify and react to food safety and quality risks. An organization, which demonstrates leadership activities, should develop food safety and quality culture across the company. The culture of companies is essential to anticipate that food security is a priority for the company, and it supports the structure of governance and supervision.

To effectively manage the challenges facing the world market, organizations, which provide accurate documentation, traceability, and control, must reduce complexities within their supply chains. Supply chain documentation will proactively identify potential risks and support the mitigation of those risks, thereby protecting brands and meeting ever-changing consumer demands. Investing in integrative IT systems, the blockchain, end-to-end documenting of the supply chain, as well as the creation of food safety capability will be needed to address problems faced by organizations and their supply chain partners.

The safety of inbound ingredients, packaging materials, and other essential process-related equipment arriving at its production facilities is a recognizable weak link for many in the industry. In 2011, the U.S. FDA passed its most comprehensive law on food safety, the Food Safety Modernization Act.

The Foreign Supplier Verification requirement is a key feature of the U.S. legislation. Mostly, all foreign food shipments arriving at the entry ports in the U.S. should meet the same food safety standards as those that domestic producers should.

This part of the FSMA regulation is anticipated to lead to a significant upheaval for many supply chain partners in the U.S.; the regulation is also expected to improve food safety in the whole of the supply chain. Both of these landmarks are based on the acceptance of fundamental scientific principles to confirm food safety. The alleged reason under which these laws are written is the validation and verification, a mark of both the FSMA and the SFCA.

However, food manufacturers, restaurants and retailers will continue to face the challenges posed by internal and external food security challenges as the supply chain complexity increases, regulations continue to evolve, and demands of consumers increase. Companies must understand what innovative and disruptive technologies, like the IoT and blockchain, are available on the market, and leverage them to identify and manage food security risk supply chain.

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