Food product recall: saving time, costs and reputation

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I recently attended the Food Safety and Compliance Conference in Auckland. When speaking with other delegates, it was clear that focusing attention on managing food traceability and recall processes was of great importance. Many of those in attendance were keen to find out more about the tools and systems available to manage these processes too. In this blog I’ll be laying out recall in NZ and reducing time, costs and protecting your reputation during a recall scenario.

Written by Yuko Saito from Theta's ERP and Business Solutions team. 

Protecting the reputation of NZ as a trusted producer of safe food and being ready for future challenges and opportunities is a key objective of the Ministry of Primary Industries.

As part of the Food Act 1981, Food Act 2014 and Animal Products Act 1999, a food recall plan is a requirement for all food companies in New Zealand. New Zealand Food Safety has also proposed to strengthen food recalls and risk-based plans and programmes, and requires companies to maintain product records for at least 4 years, or longer if the shelf life is longer.

There are three main causes of food product recall:

  • Foreign matter
  • Microbiological/chemical contamination
  • Undeclared allergen/ingredients

Whilst you might be taking every step to mitigate the risk of food recalls in your company, it’s sometimes beyond your control i.e. you are affected by recalls initiated in your supply chain. So far this year 32 recalls have been issued, including February’s much reported chocolate recall due to an undeclared allergen in a chocolate product from one supplier; distributed and used in many products.  

With the growing attention around food traceability and handling a recall in the best way, it seems timely to share some thoughts and conversations I had about the topic.  

 

Where does it cost you?

The number one priority is removing the product from the supply chain and protecting your consumers. If that process is inefficient, it’s going to cost you – both directly and indirectly.

In 2012 the Grocery Manufacturers Association (GMA) and Food Marketing Institute estimated the average cost of food recall in USA was $10 million, just from direct costs such as retrieval, disposal and recall of products. The indirect costs stem from the damage to a company or product’s reputation and loss of sales. After an event there is also a tendency for consumers to avoid the food group affected, regardless of whether the product is from the same company that requested a recall or not.

It’s fair to say you’ll want to minimise those costs, so how do you do it? A good starting point is to look at your current way of doing things and where your inefficiencies and risk lies.

It’s also clear, without a doubt, in a food recall situation time is of the essence. People’s lives could depend on it.

 

Common food recall and traceability shortcomings

 

  1. Manual inefficiencies

An example I like to use is that of a paper diary. Say you write 10 pages every day, and one day you wrote about a cafe that did the best flat white. A year later you want to go back to the cafe, but you can’t remember the name. You go back to your diary, find the date and sift through ten pages to find the name of the cafe. Wouldn’t it be easier if your diary was digital, and you could just type in a search for the term ‘flat white?’

In the case of product recall, you might be sifting through a mountain of information to find all the products that have a recalled ingredient.

Manual inefficiencies occur throughout the supply chain and operation, from when you need to locate an ingredient to when you need to notify the appropriate channels about the issue. Whilst it’s still manageable to use spreadsheets or keep paper files, it’s more time consuming to find what you need. When that time is money, every minute counts.

 

  1. Lost or missing information

If we revisit the diary example, imagine if you (or someone else) were to lose your diary. Not only have you potentially lost confidential information, but you’ve also made it almost impossible to carry on in your quest to find that amazing cafe.

When you’re working with a large team, it’s easy for something to be misplaced, filed in the wrong location or someone just got too busy to update it. During a food recall, this might be extremely costly. Putting your company at risk of not being able to supply the correct information to the correct parties could lead to a massively delayed recall, potential fines and putting your end consumers at risk.

 

  1. Too many people required during a recall

Recalls require multiple steps and channels; including risk identification, sampling, inspections, public communication – to name a few. The more people involved at each stage to carry out the recall, the more your costs will rise, and the higher the likelihood of confusion (think about all the people you need to keep trained, staff changes, supply chain changes, etc). If your business  comes to a halt because it’s ‘all hands-on deck’, you’ll need to rethink your process.

 

  1. Be ready for the future

If New Zealand Food Safety’s proposal of strengthened food recall is implemented, or a customer identifies an issue regarding your product, or your supplier notifies you of an issue that will affect your product, can you confidently say that you are recall ready? Can you easily update your current system to efficiently meet legal requirements as your business grows? You may already have a good food safety plan such as Hazard Analysis and Critical Control Points (HACCP) or Threat Assessment and Critical Control Points (TACCP), but if you don’t it’s a good time to consider it.

Don’t let a recall force you to quickly update your processes and systems. Update and improve your systems before it happens. It could help keep your brand reputation protected and set you up for a better way of managing recalls going forward. Having a well managed, maintained, and demonstrable food recall process will be a desirable differentiator to your customers.

 

From a technology perspective…

You can certainly deal with many of the points above by using a good food recall system.

Here’s how:

  • Reduce the risk of being non-compliant and mismanaging data. Train your staff to use a system that is one source of truth, and where information is put in the correct location.
  • Systems that let you block the remaining batches of the product in question and start a track & trace procedure will save on manual inefficiency. With these, the product is traced up and down the and customers/suppliers can be notified as quickly as possible. You have end to end traceability and can confidently deal with a recall as efficiently and quickly as possible, without the involvement of your entire workforce or human error.
  • Be prepared and act proactively, not retrospectively. Look for technology, and a technology partner, that can help streamline your processes and help with compliance.

Implementing a modern ERP system like Microsoft Dynamics 365 Business Central with Foodware 365 will provide you with all the controls and processes you need to enact a controlled food safety recall.  Theta are an authorised Foodware 365 Partner, so whether you’re already using this technology or want to know more about it – we can give you guidance. We also have a great offer on upgrading to Dynamics 365 Business Central if you’re using a legacy Microsoft ERP or want to switch over from another ERP system.

This blog was written by Yuko Saito, from the Theta ERP & Business Solutions team.