Traceability & Recall: How To Avoid FSMA Compliance Risk

The need to comply with new FSMA traceability and recall requirements is prompting food and beverage processors to evaluate their processes and technology.

Traditionally, traceability procedures are cumbersome when time is of the essence. The FDA intends to change that. If your current traceability and recall records are housed in paper files and/or disconnected systems, you are accepting compliance risk. Piecing together fragmented data to provide traceability history in a recall situation is time-consuming and error-prone. New FSMA requirements mandate change and empower the FDA to enforce mandatory recalls when traceability requirements cannot be demonstrated.

Today, purpose-built ERP systems for the food and beverage industry significantly improve the ease, speed, and accuracy of traceability, helping you to react quickly and minimize risk in a recall. In addition to meeting regulatory requirements and customer standards for mock recalls, food- and beverage-specific technology can offer prevention and efficiency benefits that general ERPs do not.

TRACEABILITY AND RECALL REQUIREMENTS

But first, what capabilities do you need? FSMA regulations require food processors to be able to trace a product one step backward to suppliers and one step forward to customers within a “reasonable amount of time.”

Starting at any point in the supply chain, you must be able to go backward or forward rapidly to trace the source of contamination and contain a recall. The FDA has been intentionally vague about the “reasonable amount of time” requirement, but the understanding is that it will depend on the severity of the circumstance. Many industry experts interpret this to mean two to four hours for the most common scenarios. However, in cases where a consumer has become severely ill or even died, a reasonable amount of time could be just minutes. The risk and complications of not containing an outbreak are severe. Let’s consider some common scenarios and the capabilities you would need.

Scenario: Product Contamination Alert

A customer has just informed you of an outbreak related to one of your products and provides you with the invoice number. What do you need to do to comply with new FSMA rules?

You very quickly need to identify which lot of product you sold to that customer and which other customers received that same product or lot of product. You must find out what ingredients went into it, the source of those ingredients, what quality tests were done, and the test results.

From there, you must quickly determine every product that was made with the ingredients, every customer who received potentially contaminated products, and the location of any remaining inventory.

If you received 100 pounds of an ingredient that must be recalled, you must be able to account for all 100 pounds in a reasonable time. In addition, you must notify the supplier of the ingredient.

If your records are spread across multiple systems and filing cabinets, this process can become extremely complex and time-consuming. The cost implications and safety risks associated with any delays are significant. When a recall is required, isolating the issue quickly can help expedite communication and contain the recall, which has obvious consumer safety and business benefits.

Scenario: “Typhoid Mary”

In another example, an operator with a contagious disease was working on your packaging line. Two days later you are notified about this exposure, and you must recall the affected products. Would you be able to quickly identify all the products that person had contact with? Can you do this in a reasonable amount of time? If not, you may have to recall all products packaged over a certain date range.

In this case, you need a system with quick traceability of processes and personnel, enabling you to limit your recall to only the products on one line instead of having to recall all products over a certain date range.

That may sound simple, but unless you have quick access to all of the data required to evaluate the situation, it is very difficult and time-consuming.

Unfortunately, most systems fall short. Not all ERP options have the capability to track inventory by lot. Not all ERP systems have the capability to connect and map the complete journey of an ingredient through the process. Even fewer ERP systems can provide traceability down to the level of specific personnel and processes. Why should you care?

THE RISKS YOU CAN REDUCE

Traceability and recall containment are your insurance policy against several significant risks associated with foodborne illness.

Regulatory — In the past, recalls were voluntary decisions made by the food processor. Now that traceability and recall containment are required, the FDA can mandate a recall of all products from the marketplace and consumers if traceability cannot be demonstrated.

Strategic — Large retailers require a mock-recall demonstration as part of the supplier qualification process. Food processors that want to grow by selling to large retailers need to have this capability.

Financial — The financial risks of recalls are well-documented. The costs of a massive recall and the consequences can destroy a business. Traceability can reduce the scope of the recall and therefore limit the financial risk. Further, the ability to perform timely and efficient mock recalls saves dollars on the front end and can limit damages in the case of an actual recall.

Reputational – When your business is exposed to a recall your brand reputation is on the line. A poor response can destroy your business beyond the financial impact. We all want to be good corporate citizens, but when the circumstances that lead to a recall are out of our control, we can at the very least prove our investment in preparedness and act quickly to limit the consumer’s exposure.

In addition to requiring traceability and recall containment, FSMA imparts a sense of urgency by requiring the time frame to be reasonable. That time frame adds a new challenge that instantly antiquates the paper-based record-keeping processes some food processors still use and even outdates some disconnected systems that provide fragmented data. Now, time is of the essence for all food processors to become compliant.

LIMITATIONS OF GENERAL ERPs

General ERP systems (i.e., not food-industry specific) allow you to track transactions. For instance, they can tell you which ingredients are purchased from which suppliers, delivery dates, which products were sold to which customers, and delivery locations.

However, these systems fall short for traceability requirements in several key ways:

Inability to trace inventory by lot

Inability to connect the processes from the raw material suppliers to the customers

Lack of complete accountability for a raw material

Typically, general ERP systems are designed for industries that may not need the rigorous traceability capabilities required of food and beverage manufacturers. Therefore, they do not contain the step forward to the customer shipment and the step backward to the supplier receipt. Nor do they connect the pieces of data — requiring you to manually piece the data together in a crisis situation when time is of the essence. For a food processor to get the full range of history when using a general ERP requires accessing information in different systems and then piecing data together, a difficult, time-consuming, and error-prone exercise.

Cost is another limitation of general ERP systems. If you purchase a general ERP system and then have to customize it or piece together multiple systems, the up-front investment and the costs to implement and integrate multiple solutions can be greater than the single fully integrated system that has additional prevention and efficiency byproducts. Costs can further escalate each time you want to upgrade your system or any part of it.

THE RECOMMENDED SOLUTION: FOOD INDUSTRY ERP

Your choice of ERP system will have the greatest impact on the ease and speed of traceability and your ability to contain a recall. ERP systems designed for the food and beverage industry generally have more traceability functionality than a general ERP. Yet, even among purpose-built ERPs, not all are created equal. As you evaluate different ERP systems, what requirements do you need?

All the data you need for traceability must be integrated in one system for ease and speed of response. Traceability must be embedded into all transactions. This enables full bi-directional traceability across the supply chain from supplier receipts to customer shipments. The data for each step of the product journey must be accessible from any starting point in the supply chain, and you should be able to move forward or backward to support recall requirements in just minutes. Traceability must be designed around every piece of data you enter — it should not require extra work or extra systems.

Food- and beverage-specific ERP systems must not only trace ingredients and finished goods but also the processes and personnel — capabilities which are unique and valuable. For example, if you discovered sanitation was not performed as scheduled on one piece of equipment, you must have the ability to identify the products made on that piece of equipment. While there should be controls in place to alert you if that sanitation was not done, if an alert was ignored, the ERP system should show the potential root of the problem was the sanitation. The ability to trace by personnel is valuable when a contagious employee is identified, as mentioned above.

In addition to meeting traceability and recall requirements, food-specific ERPs should meet the unique prevention needs of the food and beverage industry. Built-in quality controls should include:

screening to allow receipt of shipments only from qualified suppliers,

sending alerts when a supplier needs to be recertified,

recording quality control test results on incoming receipts,

alerting you to exceptions and out-of-tolerance results,

maintaining storage requirements, and

controlling shelf life and expiration.

Food-specific ERPs generally increase overall efficiency of your business. Users often experience reduced product cost, improved customer service, and increased revenues. Additionally, access to information provided by a food-specific ERP is highly valued and informs better decisions throughout a food or beverage business.

IMPROVE DATA ACCURACY

Regardless of the ERP system you choose, a system is only as good as the data you put into it. Best practices are needed to reduce errors and increase efficiency when entering data.

Avoid Translation Errors

One common source of data error in the food and beverage industry is translation error. This happens when an operator writes lot numbers on a paper log and then a second person enters the lot numbers into the system. When the handwriting is illegible, the data can be misread and inaccurately entered. To avoid translation errors, the best practice is for the operator handling the lot to enter the lot number into the system.

Automate Data Collection

Scanning tools, such as bar code scanners and vision systems, are more efficient for capturing lot and usage data. Not only do they add to productivity, but they are more accurate because they eliminate transposition and keying errors.

The best practice is to use scanning tools throughout the entire supply chain, all the way from the supplier receipt through all processes, outputs, and shipments.

A food- and beverage-specific ERP system that also is compatible with GS1 standard bar codes offers an additional productivity benefit because it eliminates having to recreate lot labels for incoming shipments from suppliers.

CONCLUSION

Imagine yourself in a recall situation today. Time is of the essence and the stakes are high. Do you trust your systems and your data? Can you quickly contain the recall? A food and beverage purpose-built ERP system is the most efficient solution. There are no third-party systems or multiple systems to access. There is no puzzle to solve. Within minutes, you will have the vital answers you need to contain the scope of a recall and limit consumer safety risks as well as financial and reputational damage. The key is to act quickly.

An ERP system built specifically for food and beverage processors provides additional benefits outside of traceability and recall in the form of preventive controls and processing efficiencies. Your decision to comply with traceability and recall requirements also helps you prevent recalls and run your business more efficiently every day. In short, compliance becomes a benefit to your business.