Food safety supply chain risk management

Addressing food safety risks

The food industry’s supply chain continues to evolve and grow in complexity. To manage food safety risks in today’s environment, companies need to understand the challenges they face and the potential solutions available.

The evolution of the food supply chain

Supply chain participants are no longer limited to the first-tier supplier, the manufacturer, and the distributor. Today, participants include everyone involved from “farm to fork” in the growing, harvesting, processing, packaging, transporting, holding, and selling of a food product. A participant can have multiple roles within the same supply chain. And it’s more than likely one or more ingredients or raw products are sourced from non-domestic entities. Risks to food safety exist along each step of the farm-to-fork continuum.

Many companies—from food and beverage manufacturers to restaurants and food retailers—find it difficult to document their end-to-end supply chains. Yet it’s essential to understand the supply chain to meet federal regulations, mitigate risks, and satisfy consumer demands for supply chain transparency. Lack of a holistic view and understanding of potential risks can lead to food safety and quality failures, resulting in damage to a company’s—or multiple companies’—brand reputation and bottom line. Companies must understand the challenges they face, and the potential solutions available, to manage food safety risks in today’s complex supply chains.

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Common challenges

Internal and external driving forces affect how companies manage their supply chains and can directly or indirectly shape food safety programs.

These challenges include:
  • Company organization and governance
  • Balance between cost reduction and risk mitigation
  • Recall management
  • Difficulty in defining supply chains beyond tier one
  • Marketplace evolution

Companies should consider addressing these challenges to allow them to proactively identify and respond to food safety and quality risks. Deloitte Risk and Financial Advisory has developed a broad and integrated safe food supplier and service provider risk management framework, which aligns companies with their business objectives using an end-to-end approach.

An effective supplier and service provider risk management program rests on foundational elements. An organization should establish a food safety and quality culture throughout the company—one that is demonstrated by leadership’s actions. Company culture is essential to set the expectation that food safety is a priority across the enterprise, and it supports the governance and oversight structure. Policies and standards that are aligned to and support the culture and governance structure should define the supplier management program.

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The future of food safety

The internal and external food safety challenges facing food and beverage manufacturers, restaurants, and retailers will continue to evolve and expand as the complexity of the supply chain increases, regulations continue to evolve, and consumer demands increase.

Companies need to understand what innovative and disruptive solutions, such as the Internet of Things and blockchain, are in the market to help identify and manage food safety supply chain risks. Deloitte Risk and Financial Advisory’s safe food supplier and service provider risk management framework is designed to help companies proactively manage these challenges and protect their brand reputation and bottom line.

Learn more about Deloitte Risk and Financial Advisory’s safe food program services.

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