Uncomplicating the Supply Planning Process

The hazard analysis method used for HACCP can serve the risk assessment aspect of supply planning. Much of this work is already required at regulated sites or sites certified to a GFSI benchmarked standard. Supply planning, like HACCP analysis, cannot be a one-time analysis because of the dynamic nature of the supply system.

For agricultural products, the growing season, the weather, the economy, crop yield/shortages, and market conditions can all affect food safety and quality risks. Poor growing seasons, drought, or disease may cause reduced yields and increase the vulnerability of the crop to damage and infestation. Difficult growing seasons in some supply regions may led to excess, off-label, more frequent use of agricultural chemicals, or, in certain jurisdictions, use of non-permitted chemicals.

Low yields may tempt suppliers to supplement a poor crop with product from farms that are outside formal contracts and oversight, increasing risk of out-of-specification and less safe product. Another possible risk with some commodities, such as spices, is the dilution with other substances (ground peanut shells in cumin for instance) that may not be food safe. The potential for substitution can increase when supply is short, although the risk of fraudulent dilution for economic gain is always present for some materials no matter what the weather.

The supply chain for agricultural materials can also be affected by market factors such as consumer trends. As the demand for GMO-free and/or organic product increases, the pressure on the supply chain goes up, which also increases potential hazards from new or unproven suppliers. For instance, the current price increases of natural vanilla have been affected by the decision of the major players to change to natural vanilla flavoring.

A Supplier Assessment Tool

A statistical process control tool that may be used to assess suppliers is C_pk, which measures the capability of a process to meet specifications. Some suppliers request that C_pk for each batch is reported on a certificate of analysis. Others may require that a specific process C_pk is reported routinely as a KPI used to monitor supplier performance.

C_pk can be used to assess risk of a supplier not meeting a particular specification or to compare the capability of different suppliers. It can also be used to determine if sampling and testing should be done. Some customers may require a C_pk >2 (or higher) for critical materials in which defect rates are likely to be extremely low (C_pk = 2 defects per 3.4 per million opportunities or 99.99966 percent defect free), see Table 1.

Food safety and quality managers should consider including statistical process control in their supplier requirements. It can be a powerful tool. Sites that use statistical process control are likely to have a better understanding of their processes and a continuous improvement approach to production.

Whether applied in a limited tactical way or routinely as part of supply management, supply planning can be used to improve and enhance the purchasing and supplier management processes. The supply planning process complements existing regulatory or GFSI benchmarked standard certification requirements. Using the expertise from quality, food safety, and production personnel, supply planning continually improves the management of suppliers and helps develop a more robust, safe, and reliable supply base.

Wright is a technical manager of training and education services at NSF International. Reach him at [email protected].