The food & drink supply chain: the threats from food fraud

Guest Blog by Food Journalist Paul Gander

Unless yours is a vertically-integrated food & drink business which runs the entirety of its own ingredients sourcing operation from field to fork-lift, there will always be doubts and concerns about the supply chain.

Periodically, scares and scandals about upstream criminal adulteration – from melamine in milk powder to horse meat – do a particularly good job of eroding consumer and retailer confidence. Out of the 2013 horse meat debacle came the Elliott report and its key recommendation that a National Food Crime Unit (NFCU) be set up in the UK. But, given the Government’s response to that report, is this the best way to shore up downstream confidence, both among manufacturers and their customers?

Apparently in ‘listening mode’, the Government did indeed establish the NFCU under the auspices of the Food Standards Agency (FSA), and last year appointed the experienced Andy Morling as its head.

Several months into his new job, Morling admitted to me that there were serious gaps in the unit’s understanding of the threat from food crime in Britain. That is to be expected, at this stage. Less easy to accept has been the suggestion by the FSA that the NFCU may never have full investigatory powers.

If there is an episode of the Keystone Cops where the cops themselves – rather than the criminals – are handcuffed, this sounds like it. Coincidentally, one insider who worked on the Elliott report did confide that he saw the whole thing as a ‘classic Whitehall farce’ designed to kick the question of food fraud into touch. Let’s hope the drama does not shift from comedy to tragedy.

On a practical note, Morling wondered whether the principles of situational crime prevention (SCP) could be applied to the food arena. For anyone not familiar with it, SCP is defined by Cambridge University’s Institute of Criminology as any strategy aiming to reduce criminal opportunities rooted in everyday routines.

The institute cites CCTV as a prime example of SCP in action. But what would the equivalent be in a food fraud setting?

If we cannot literally ‘watch’ our suppliers every minute of every day, we can collect, collate and access data about them; and data, it could be argued, is the ‘CCTV’ of supply-chain security.

Manufacturers will have to judge how much testing of ingredient consignments (and what sort of testing) should be carried out. At the same time, they are likely to be extremely reliant on third-party auditing and certification at source. Diligent data collection may throw up worrying trends and anomalies among suppliers or their ingredient specifications. This in turn may allow businesses to step in early to avert more serious consequences.

Of course, neither frequent testing nor auditing is likely to produce direct evidence of wrongdoing. That is beside the point. The primary role of a speed camera, for example, and its role from an SCP perspective, is to deter speeding.

It has been said that the food industry supply chain operates on the basis of quality assurance rather than quality control. But ‘assurance’ can (and in many cases should) be improved. Going beyond the legal minimum with overt test procedures and the active use of third-party certification must help to deter fraud, while also reassuring customers.

On this last point, as with the creation of the NFCU (a cynic might say), it would be difficult to separate out the tangible and practical benefits from the ‘soft’ – and, in the case of the NFCU, political – benefit of simply being seen to be doing something.

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Manufacturing Today: Who Needs Process Oriented Bills of Materials?

Manufacturers are well aware that compliance is top priority when it comes to making products that are for public consumption.

However, when it comes to creating recipes and formulations, product structures can be difficult and time consuming to keep track of.  So, the question of how useful process oriented bills of materials would be to process driven manufacturing companies has arisen: is this a ‘nice to have’ or a necessity in 2014 and onwards?

If you are part of a food manufacturing company that deals with recipes or a chemicals company that creates formulations, the answer is relatively simple.

Think about how your business currently completes the following processing to create bills of materials and consider the difference it would make if there was a simple and flexible solution that could keep track of absolutely everything, alongside all of your business functions such as ordering, reporting, accounting etc.

  • Items – define materials  within the product structure
  • CoProducts – define a product that is usually manufactured together with another product
  • ByProducts – define material of value produced as a residual of the production process
  • WIPItems – define work in progress materials for reporting and visibility purposes
  • Scrap – define the scrap that is produced during production
  • Simple or Product Formulas – define simple or formula based relationships between materials and parent products
  • Scrap, Yield and Factors – define value and percentage uplifts for materials
  • Revision – define revision specific product structures
  • Phantoms – define phantom product structures
  • Multi-level – define multi-level product structures
  • Attachments – to define and link to detailed instructions, procedures, videos and other such media files
  • Warehouse – define the warehouse where the product is produced
  • Back Flush Location – define the warehouse where material is back flushed
  • Project – define the project associated with this product for reporting purposes
  • Distribution Rule – define the distribution rule for financial transactions
  • Cost Dimensions – define the dimensions for reporting purposes
  • Issue Type – modify the picking method of inventory transaction per product
  • Mass Replace – replace selected materials and bill of materials within another material

 It is not too good to be true!

The solution exists and it is part of an SAP certified industry solution called ProcessForce, which is a core part of the Signum Solutions Industry Edition for SAP Business One.  What’s more, it’s tried and tested for both food and chemicals companies.  For more information, call us on 01244 676900 or email enquiries@signum-solutions.co.uk

Not convinced?

If you’re still not convinced that this solution can save your business time, money and a great deal many headaches for many years to come, have a look at how this solution has worked for our customers in some of our manufacturing case studies.