Executives in the food and beverage processing industry share a common nightmare: Despite every effort to deliver safe products, someone falls sick or even dies as a result of accidental product contamination. This nightmare is not because the industry is plagued by contamination problems, but rather because food and beverage suppliers are held to standards that are higher than those faced by other consumer products companies. If a toddler dies as a result of E. coli, Hepatitis A, or salmonella contamination, the public outcry, not to mention the legal repercussions, canbe enormous.

Collectively, the food and beverage industry has paid hundreds of millions in fines and legal settlements. In some cases, companies have been blamed, and financially punished, for accidents over which they had little direct control. Independent bottlers or distributors may, for example, accidentally contaminate products bearing the brand name and thereby put the firm at risk. If brand name appears on the packaging of a contaminated product, the company can be held accountable for any resultant injuries. Indeed, there have been cases in which original manufacturers were cleared of any wrongdoing, but have been obliged to make reparations anyway. Similarly, distributors can be held liable for distributing products contaminated by the original manufacturer.

The Challenges
This unforgiving regulatory and legal climate has put food and beverage manufacturers and distributors on the defensive at a time when they are being asked to deliver a greater number and variety of products than ever before. For example, in the past, beverage companies manufactured and delivered products for mass markets. Today, however, many are using technology to directly link the requirements of individual customers to the design and production of products that have unique characteristics. We have moved far from the predictable paradigm of mass marketing. Many products are now developed according to the specifications defined by customers. We are moving from mass marketing towards mass customisation. And the Internet has accelerated the process for many beverage companies. To win in an Internet-driven marketplace, beverage companies must offer a greater variety of products. Many companies, for example, are seeking to differentiate through experience-based marketing over the World Wide Web. Online consumers are often looking for products and services that not only satisfy their basic needs, but also solve problems.

While the Internet has created more selling opportunities, it has also added complexity to the issue of product liabilities. Complex distribution channels make tracking and recall more difficult. Timeframes to make and deliver products have shortened dramatically, giving manufacturers less time to track and recall contaminated products. The push to provide customers with the right product at the right price at the right place at the right time is redoubling the need for quality and safety control across the supply chain.

Outlining the Issues in a Manageable Context
It is important to remember that while e-commerce may have kicked up the pace of buying and selling, it has not changed the underlying rules of doing business in the beverage industry. It is also important to understand that new enterprise and supply chain technologies are available that make it easier to address safety and regulatory issues, even in the heated environment of e-commerce. But before addressing those solutions, reviewing the key safety and regulatory pressures on the industry is important.

Perception vs Reality
Executive nightmares are partly inspired by the fact that food safety is a primary concern for the public, eclipsing concerns about food additives, pesticide residues, irradiation and genetic re-engineering. Everyone wants to know that the food they eat and the food they give to their children is safe, and every instance of food contamination almost automatically becomes a high-profile media event.

However, incidents of food-borne illness are not necessarily more frequent than in the past. They just seem so. And it has nothing to do with food handling problems among food processors. But more sophisticated detection capabilities are making it easier to pinpoint and report incidents. Seemingly unrelated incidents can now be linked to single sources of contamination, such as occurred in US, in the incident of the E. coli-contaminated hamburger in 1993.

In the US, the Center for Disease Control is expanding and improving its nationwide system of public laboratories—called FoodNet—that trace the source of food-borne illness such as E. coli and salmonella. Such systems help identify outbreaks before they become widespread, but they also increase public concern about food safety. Despite increased publicity about food-borne illnesses, food and beverage companies need to assure their customers that their products, all through the manufacturing and distribution system, are safe and free of disease-producing organisms. In addition, beverage producers are facing increasing scrutiny and regulation as the government responds to public concern over food safety. The government has adopted stricter regulations regarding the manufacture of juices, including asking companies to place warning labels on all non-pasteurised juices. The Food and Drug Administration (FDA) is moving ahead to extend government inspection practices now used for meat, seafood, and poultry to other food products. Food Safety

Regulation and Control Standards
A few of the regulations and standards to check and control food safety are discussed below.

Hazard Analysis and Critical Control Points (HACCP)
In the US, the FDA mandates all meat, seafood, and poultry processing companies to use the HACCP system. HACCP is a system which identifies points in the manufacturing and distribution process where contamination can occur and then institutes measures to prevent such contamination. If contamination or suspected contamination should occur, HACCP provides for product tracing and recall procedures. Though the use of HACCP by  other food and beverage manufacturers is voluntary, it will eventually be mandated for them as well. Prudent companies, in fact, are preparing for that day by formulating HACCP implementation plans.

Voluntary Regulation: Good Manufacturing Practices
Before government regulation through HACCP becomes a reality, most beverage companies will continue to provide their own food safety oversight through the voluntary use of Current Good Manufacturing Practices (CGMP) Guidelines. CGMP for manufacturing and packing food and beverages includes detailed guidelines for sanitary operations and controls for plant buildings, facilities, and equipment. Comprehensive guidelines for production processes and controls include methods of avoiding food contamination during receiving, inspecting, transporting, segregating, preparing, manufacturing, packaging, storing, warehousing and distribution. Defect action levels are also prescribed in CGMP.



Product Consistency
Complicating matters is the fact that beverage producers are increasing the number of packaging varieties, thus involving different plants to manufacture a single product. For instance, Coca Cola may produce Coke in a themed seasonal package-or a country-specific package, all at different plants. Keeping the product and the safety procedures consistent becomes more complex with the proliferation of manufacturing plants for a single product.

Interdependence of Business Processes
Business drivers, supply chain pressures, and the specialised requirements of food and beverage production add up to a highly complex and changing environment. To meet the business objectives of increased sales, lower operating costs, and to become more customercentric, companies must find the right balance of business process consistency and supply chain optimisation. This requires the targeted application of IT solutions specifically developed to meet the needs of food and beverage companies, as well as solutions providers with an in-depth understanding of the complexities inherent in the food and beverage industry.

Most beverages manufacturing companies are turning to automation as a way to minimise contamination liabilities and ensure product consistency worldwide. Today’s enterprise and supply chain systems have the capability to track every aspect of production, packaging, and delivery. But not all enterprise and supply chain systems are created equal.

Building Trust
Companies cannot afford to ignore the food safety issue, even if they have been lucky enough to avoid a high-profile contamination incident. For food and beverage companies, perhaps more than any other manufacturers, trust is the foundation for acquiring and keeping customers. Consumers require a basic trust that a company does its utmost to keep its products safe. Making food safety a welldocumented priority is the way to increase and keep a loyal customer base. Loyalty and brand trust allow companies to not only increase their customers base but to expand their markets as well. In addition, the more companies regulate themselves, the less likely the government will step in to do it for them.

Customer-Driven E-Business Environment
Safety issues have become even more complex in the age of the virtual enterprise. This means that the enterprise and supply chain solutions must be able to support controls both within and outside the enterprise.

Food Safety Issues: Calculating the Risks
Those companies that haven’t planned for all manner of food safety contingencies are leaving themselves susceptible to devastation. One unfortunate accident in processing or handling can cause a tragic outcome. Company executives must live with guilt if there are deaths and serious illnesses involved. Trust in the company is instantly lost and there is little the company can do to defend itself to the public. In addition to loss of sales, the company must absorb the cost of inventory wipeout of the recalled product. Recovering from such devastation is a business and publicity nightmare for all involved. Indeed, some companies never recover.

Strategic Approach for Companies
Companies that adopt good standards can effectively use these as a barrier to entry to those that do not. For their own survival, food and beverage companies need to ensure that their enterprise and supply chain systems support the full range of the food safety requirements. Not only must they be sufficient to support their current processes, but they must be able to easily meet the HACCP requirements when and if mandated by the FDA.

The key components of such a system include lot traceability, lot attribute tracking, recall management, quality document tracking, interface with Manufacturing Executive System (MES), and process and control mapping. In addition, the system should be easy to implement, scalable, possess deep beverage functionality, and provide advanced application support.

Safety First
Identifying a system that supports the food safety requirements can be a daunting undertaking, but it is well worth the effort. There is no need to limit the system evaluation process to features and functions. It is wiser to always keep in mind that technology solutions are only as good as the supplier who builds, maintains, enhances and supports the system being purchased.

Companies must look for solutions providers with a stake in the ongoing success. A key indicator of commitment is the depth of industry-specific functionality built into the system. They must also seek out providers with development groups dedicated to serving the food and beverage industry. Taking the time and building a positive relationship with the prospective solutions provider will enable the company to derive maximum benefit from the business solution.

Courtesy: QAD Inc