Automating Supplier Compliance Can Lower Costs and Keep You Audit Ready

By Barbara Levin

Managing suppliers in today’s complex food safety and quality environment is still – for many food & beverage industry companies – a manual, labor-intensive process that presents many challenges to super-busy Food Safety and Quality Assurance (FSQA) departments. The sheer volume of supplier-related paper, such as FSQA test results, audit documentation and registrations – along with tracking of specifications and expiration dates, and the ability to access data for performance benchmarks and continuous improvement – have turned supplier compliance and management into an administrative burden vs. a pro-active practice that can have a positive impact on food safety and quality as well as cost of goods made. And, this challenge is only expected to intensify when FDA announces final rules for FSMA’s Risk Based Preventive Controls, Foreign Supplier Verification and Voluntary Qualified Importer programs.

The emergence of a new breed of cloud-based supplier compliance software solutions for the F&B industry, however, is turning these challenges into automated processes with true return on investment.

How Does It Work?

Before we look at the benefits of technology for supplier compliance, let’s first take a big picture look at how supplier compliance automation works. There are a variety of systems available today and all will have different capabilities depending upon your needs. The high-level steps below generally describe critical supplier compliance automation capabilities and key features to consider when evaluating solutions:

  1. First, all supplier safety and quality specifications, document requirements, expiration dates and Standard Operating Procedures are set up electronically – with automated emails to suppliers when document updates are due.
  2. Suppliers enter data online, or submit inbound COAs that can be read by optical readers and entered automatically into the system. Using mobile handheld devices, FSQA information can be gathered at the earliest point possible – even in the field for a pre-harvest assessment.
  3. Supplier COA data and other information is analyzed against specifications in realtime. If everything “passes” – email alerts are issued to accept supplier ingredients and materials. If deviations are detected, realtime alerts are issued so that immediate corrective actions can be taken
  4. All documents, data and corrective actions are time/date stamped and made available in a central repository of data for trending, continuous improvement and food safety audits – resulting in transparency, compliance and prevention

Now, let’s look at some of the challenges of supplier compliance and how automation provides value:

Eliminate paper and increase efficiencies: Automating supplier compliance goes far beyond “electronic documents” – which can be just as difficult to manage as mounds of paper if they are in databases that do not speak to each other. By automating, you can streamline and improve supplier management processes – saving time and money while minimizing risks. Automation helps you create a globally accessible, central repository for all supplier documents – whether you have one or many plant locations and regardless of how many ingredients or suppliers you have. This helps you respond quickly to inquiries and be audit-ready every day.

Prevent out-of-spec raw materials and ingredients from going into production: Everyone in the food industry is under pressure to reduce costs without sacrificing safety and quality – and manual supplier compliance is costly in many ways. FSQA staff has to spend hours upon hours going through supplier COAs to ensure that ingredients and raw materials meet specifications. In addition to the time/labor costs, there’s also unfortunately yield waste if an ingredient goes into production before an issue is discovered. When food safety and quality results can be analyzed in realtime, however – along with realtime notifications when deviations are detected – FSQA staff can focus on the results that require attention, and production re-work or waste is significantly decreased.

Facilitate continuous improvement while lowering cost of goods made: One of the frustrations I hear most often from FSQA professionals is the inability to do performance trending on supplier data – again mainly due to the fact that the information is in different formats and systems, and very difficult to access. Imagine then, having all supplier-related data in one central repository – along with dashboards and reporting capabilities. This allows you to create scorecards to compare vendor performance, choose the vendors who provide the highest quality at the most efficient cost and even change or narrow specifications to prevent out-of-spec events and rework.

Supplier Compliance Return on Investment

To summarize, automating supplier compliance streamlines and improves vendor management programs with bottom line ROI by:

  • Saving time and labor costs by eliminating manual work
  • Helping to prevent non-compliant ingredients and raw materials from going into production – eliminating waste while maximizing yield and product performance
  • Significantly reducing the risk of error and recalls by automatically alerting you of non-compliant results
  • Helping you understand which suppliers provide the highest quality at the best price

About the Author

Barbara Levin is an SVP and Co-founder of SafetyChain Software, the leading provider of Food Safety Chain Management solutions that help ensure safety and quality compliance while creating operational efficiencies. She is a frequent speaker and author on how food and beverage companies can leverage technology to execute on food safety and quality business initiatives.


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