April 23, 2012

Global Best Practice in Cold ChainManagement

Food Safety and Supply Forum

INTRODUCTION

NSF International - The Public Health and Safety Company

NSF International is an independent, non-governmental publichealth and safety organization, based in Ann Arbor, US.

Our core mission is to protect and improve human health.

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NSF International Commitment to Food Safety

• Working to promote food safety since 1944

• Developed over 70 public health standards (food equipment,bottled water, plumbing)

• With over 700 auditors globally, a leading provider of food safetyaudits to the food industry.

• The global leader in providing certification to GFSI benchmarkedschemes.

• Steadfast ties with industry associations and Government

agencies.

• A Collaborating Center for the World Health Organization.

• Service provider to over 12,000 companies in 100+ countries

Food Safety Solutions Across the Supply Chain

• Food Safety Certification – SQF, BRC, Global-GAP, IFS, FSSC 22000

• Food Safety & Quality Auditing: NSF Cook & Thurber

• Education and Training – SQF & BRC Training Center

• Product Specification, Testing, and Development.

• Strategic, Tactical, & Technical consulting services

• Food Equipment Certification

• Beverage Certification

• Regulatory Acceptance Assistance

• Retail/Food Service auditing and quality programs

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COLD CHAIN

A Little Cold Chain History

Reefers

Increasing Importance…

Cold Chain Success

• Different products require different temperature levelmaintenance to ensure their integrity throughout thetravel process:– ‘Banana’ (13 °C),

– ‘Chill’ (2 °C),

– ‘Pharma’ (2-8°C)

– ‘Frozen’ (-18 °C) and

– ‘Deep frozen’ (-29 °C).

• Staying within temperature is vital to the integrity of ashipment along the supply chain and for perishables itenables an optimal shelf life.

• Any divergence can result in irrevocable and expensivedamage; a product can simply lose any market or usefulvalue.

Many Links…

• Shipment Preparation

• Transit Route

• Modal Choice

• Customs

• The Last Mile

The Cold Chain

Integrated Cold Chain Strategies

• At a high level, three major areas provide an overview ofthe tactics or operating structure required in most coldchains

– Planning and Risk Assessment

– Policies and Processes

– Management Practices

• Planning and Risk Assessment addresses the overallstructure under which the cold chain operates - in thisarea that overall performance expectations andobjectives for cold chain functionality must bedeveloped.

Risk Assessment

• A risk assessment of the cold chain process is essential

– to ensure that a clear understanding of the performance of theintegrated, end-to-end cold chain is obtained

– to identify the highest risk areas of the cold chain so thatmanagement plans and controls may be implemented to mitigatethese risks e.g. the points of product handoffs or transfers

• This may include ports, transfer facilities, distribution centresand customer deliveries

• Once risks are identified, the plan for addressing these risksand for general cold chain performance should be developed

– handling policies, exception protocols, critical control points andwork flow

• An overall management plan should be included as part of theprocess as well

Policies and Processes

• Should address both the product(s) requirements as well as thehandling for the products throughout the cold chain.

• Product requirements

– temperature thresholds, stability, humidity, packaging, etc.

– acceptable ranges for these requirements should also beaddressed.

• Handling requirements

– receiving practices, product put-away, storage, picking, loading,transit and delivery

• The documentation of these cold chain operating proceduresprovides the cold chain operator the “how-to’s” of proper coldchain handling for its product(s) and operating environment.

Management Practices

Factors

Controllable:

• Packaging

• Routes

• Carriers

• Transport

• Delivery time?

Uncontrollable:

• Weather

• Handling

• Cargo placement

• Delays

Other Thoughts

• Better monitoring

– Real-time

– Accuracy

– Reporting

• Source loading

• Load balancing

• Environmental conditions and recognition

INNOVATION

Definition of Innovation

Oxford Dictionary

Innovation:

Make changes in something established, especially by introducingnew methods, ideas, or products

A wide range of events drive change inconsumer products industries

• Anthrax attacks• Lead in Toys• Contaminated Toothpaste• Melamine in Foods• Heparin Contamination• Food-borne Illnesses• Product Recalls• Malicious contamination• Industry failures• Government/regulatory failures

Driving Innovation in Food Safety

Private Standards and GFSI Early Drivers

• Food-borne illness

• Product withdrawals

• Legal action

• Damage to brands and reputations

• Damage to shareholder/stakeholder

• Damage to consumer confidence

• Audit costs

The Global Food Safety Initiative

GFSI Mission

“Continuous improvement in food safety management systems … to deliversafe food to consumers worldwide”

GFSI Objectives

• Reduce food safety risks

• Manage cost

• Develop competencies and capacity building

• Knowledge exchange and networking

Standards Currently Benchmarked by GFSI

Requirement or Acceptance

Drivers Linked to GFSI & Innovation

• Improved quality

• Creation of new markets – increase in private label products

• Extension of the product range

• Reduced labor costs

• Improved production processes

• Reduced materials

• Reduced environmental damage

• Replacement of products/services

• Reduced energy consumption

• Brand differentiation standards

• Demonstrate conformance to new regulations or new standards

- Food Safety Modernization Act

Innovation and GFSI

Two main types of innovation:

• Radical Innovation

• Incremental Innovation

Sometimes referred to as Disruptive Innovations!!

Giving rise to subsets within those groups and the food industry as -

• Process Innovation

• Supply-chain Innovation

• Service Innovation

GFSI creates an environment for innovation via challenges to meet thestandards requirements and new food safety expectations

Innovation and GFSI

GFSI creates an environment for innovation via challenges to meet therequirements and new safety expectations with two key elements:

• Management commitment

“senior management shall demonstrate they are fully committed to theimplementation of the requirements of the Global Standard for FoodSafety”BRC Global Standard for Food Safety – North American Version

• Continuous improvement

Food Safety and Quality Policy “shall include the commitment forreview and continuous improvement”BRC Global Standard for Food Safety – North American Version

1st Phase Innovation Legacy

• Delivered a “once certified, accepted everywhere, concept”

• “Ticket to trade”

• “Passport to trade” internationally

• Reduced duplication of audits

• Better legal & business metric for success

• Raised the baseline for supply

• Reduced recall/withdrawal costs

• Improved product quality

• Frees up technical teams to focus on key challenges and their owninnovation

What Next and Why?

Two emerging and important developments in the food supply andancillary industries.

GFSI and certification standards and principles being extended tostorage and logistics suppliers and packaging suppliers.

• Both are key partners to a processor and their products and provide anintegral part of the product

• Both are “given” trust items within a product as received by theconsumer

• Both can “make or break” a product

Storage and Logistics

Storage and Logistics Suppliers

• Key partner to processors

• Integral part of the product life-cycle

• Represent potential risk safety/integrity and quality of the product

• Associated with recalls and withdrawals

• Ensure Commercial Value for Money – maximize product life

• Defined by specification

Packaging

Packaging Suppliers

• Provides a protective barrier & maintains optimum quality

• Interacts with product – may be used to enhance the product

• Take in many industries and forms of packaging

• Source of inherent potential risks – chemical/microbiological/physical

• Delivers key messages – storage, use, trust marks, allergens

• Creates expectations for consumers

• Direct and indirect use by consumers

• Input to storage and logistics management

Why not?

Why won’t you cascade certification to theses groups to ensureregulatory and commercial compliance?

• Will you be assured of a safe and legal, quality product?

• Will you be assured of the product as specified?

• Will the product be commercially what you are paying for?

• Is this a way of controlling/mitigating risks

• Could it drive innovation in your supply-chain?

Zero risk does not exist but certification provides one method tomanage risks

Perfect people, perfect machines, perfect environment, perfectpartners...not just yet!

Certification Logistics and Packaging

Utilize the existing food safety certification standards to manage thesupply chain

Utilize the emerging logistics and packaging certification standards tomanage the packaging supply chain

Yes, there challenges and potential burdens but focus on the riskreduction, the potential benefits and the opportunity to create innovationin the process

Is failure the challenge?

Is it an option?

“If you find it difficult to accept failure, then you simply won’t get anyinnovation because employees will be too frightened”– Sir Terry Leahy (Tesco)

Food Safety Certification Drives Innovation

• The focus GFSI puts on continuous improvement creates avery good environment for innovation.

• Certification to GFSI benchmarked standards has drivencompanies and individual facility’s to innovate in order tocomply with the requirements of these standards.

• “Management Commitment”: Perhaps the most important newrequirement that companies face through certification.

• Having Senior Management committed and involved in foodsafety can truly foster innovation.

Finally…

"Innovation is a risky business, but not innovating is even riskier"- Anonymous

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