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A food product supplier lost 24 hours as a result of a contamination incident. During this critical period of time when a problem is either contained or escalates, customers called, employees worried and operations slowed.
The management team later determined there were serious gaps in the product safety program. While they knew how to recall a problem product, there weren’t sufficient tools and processes in place to communicate with stakeholders, manage the crisis and maintain operations. The result was lost revenue and productivity along with damaged customer confidence.
Like many other manufacturers and processors, the company had a number of product safety measures in place but lacked a formal framework to link them.
What the company needed was an integrated risk-based product safety program covering seven components:
• Product safety management. This includes systems and management of recognized standards and certifications such as traceability, ISO, CSA and GFSI.
• Product recall. Procedures are needed for removing or correcting products that may be a health hazard to users. Ineffective recalls can have extreme consequences for a company’s finances, operations and brand.
• Crisis management. Procedures and processes provide operational and strategic level command and coordination from senior management.
• Business continuity. Strategies and procedures ensure continuation of time critical business processes following an incident or disruption.
• Information technology. Communication, supply chain operations, document management and tracking, and recall procedures require ongoing support.
• Security and defense. This includes protection of products, facilities, people, processes and data.
• Supply chain. Identify the points in the chain that pose the greatest risks to product safety.
Most companies already have some of these components in place but need to identify gaps based on the operation’s
size and requirements to determine the most practical strategies, then link them. Once this protective umbrella is in place, managers and employees devote significantly less time to managing risks.
Moreover, an integrated program delivers benefits beyond solving problems. It also improves operational effectiveness, protects the core business and secures an important competitive advantage: reassurance for prospects and customers. Stakeholders want to know if you have a problem. How will they be affected?
Having a few components of a risk based product safety program is not sufficient to protect a business – all must
be in place for each component to work on its own and with others. An inclusive, effective program comes in three steps:
Determine all of the risks that may affect your company’s ability to achieve its objectives, then select appropriate responses
and controls to minimize them.
Start by assessing the status of risk-based programs. When gaps and weaknesses are identified and appropriate strategies are in place, create a risk register. This central repository includes descriptions of key risks, the probability of their occurrence and the potential impact should they occur. The register also describes the actions your company will take to reduce the likelihood of an event
and the response should one occur.
When you complete this step, test procedures, monitor risk and review the risk register annually to ensure it continues to meet the organization’s needs.
When it comes to product safety regulations, most organizations are compliant with government and industry requirements since they’re generally mandatory. However, it’s also necessary to stay abreast of changes. Include updates to ensure relevant business practices remain compatible.
Documenting clear goals and operating in accordance with them is also important. Ensure internal policies, procedures
and stakeholder commitments align with risk procedures.
Leadership must come from the executive team. Align organizational objectives with the product safety program, set appropriate policies, assign accountability, communicate the importance of the program and monitor performance. Engage key internal and external stakeholders when developing policies to ensure they are relevant and inclusive.
From this point, the executive team reviews the program annually, updating it as required, and encourages everyone to follow policies.
An integrated framework for a risk based product safety program anticipates opportunities and responds quickly to problems. Management will win the first 24 hours by executing a program that protects the core of the business and meets the needs of stakeholders.
Play it safe – check the status of your company’s product safety strategies.
Glenn Fraser is the leader of the GTA region food and ag processing practice of MNP and Cliff Trollope, leader of the firm’s business resilience practice.
This article was featured in the September 2012 issue of PLANT magazine.
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