As we enter the final days of 2010 and the 111th Congress, it seems likely that we'll see enactment of S. 510, the FDA Food Safety Modernization Act. Some have taken to calling it the Zombie Food Act, given its miracle resurrection in the face of a promised filibuster by Sen. Tom Coburn (R-OK) and a technical question over the bill's constitutionality. But all that seems to have been ironed out, and we appear to be in for a much tougher regulatory regime for the monitoring of food supply chains.
Frankly, I'm surprised that a similar measure wasn't passed long ago. According to the Centers for Disease Control and Prevention, 48 million Americans get sick from tainted food each year; annual deaths number around 3,000. So much for the efficacy of voluntary action.
S. 510 covers all foods sold in the U.S. except for meat, poultry and egg products already regulated by the U.S. Department of Agriculture. For the first time, it gives the U.S. Food and Drug Administration the authority to mandate recalls, instead of waiting for suppliers to pull their products from shelves. It requires producers to develop, adhere to and monitor methods for preventing contamination of food. And it allows the FDA to examine all relevant data at farms and processing facilities.
"What the government is telling us is that the status quo is unacceptable," says Venkat Rajaji, PLM (product lifecycle management) product manager with Infor. "We need to come up with a better strategy to ensure higher quality [of food] for consumers."
The effort will have to start at the very beginning, says Rajaji - in the design phase. Producers must account for everything from raw materials to the many stages of product formulation and relationships with multiple supply-chain partners. Testing must be carried out under the strictest conditions, according to high standards of quality and purity. Manufacturing equipment needs to be monitored constantly, to avoid contamination from elements such as rust or bacteria remaining from prior use.
Most of all, companies will have to follow the provenance of food products throughout the chain, so that responsibility can be fixed in the event of an incident or recall. As with so many issues related to proper supply-chain management, it all comes down to a question of visibility.
"The passing of the bill means that companies are going to have to be able to trace backwards and forwards, to see where [product] came from and where it's distributed to," says Rene Inzana, product manager with Syspro USA. To put it more succinctly: "from farm to fork."
Syspro USA president Joey Benadretti says the new law will pose a special challenge for small and medium-sized manufacturers and distributors. They're facing the same regulatory burden as multinational competitors, but with fewer resources to address it. They'll need a combination of sophisticated information technology and revamped business processes to follow the progress of each ingredient that goes into a given product. FDA will expect suppliers to make available product information and recall records instantly, rather than the weeks or months it has taken many of them up to now. Proper labeling and shelf placement at the retail store are additional concerns that will have to be factored in.
Companies looking to implement new standards will have help from the Global Food Safety Initiative (GFSI), a private-sector collaboration launched in 2000 by manufacturers, retailers and food-service companies in response to a number of food scares. Participants devised a certification for farmers, producers and processors, creating a system that can serve as the basis for compliance with the new law.
An amendment to S. 510, introduced by Sen. Jon Tester (D-MO), exempts small farms with less than $500,000 in annual revenue from the reporting and tracking requirements of the law, a move that wasn't made without controversy. Still, it ensures that small family farmers won't be overwhelmed by regulatory red tape when they sell their wares directly to consumers.
Those likely to suffer the most from the requirements of the Food Safety Act are mid-sized and regional food processors. "A lot are going to fall by the wayside or be acquired by larger companies," says Jack Payne, vice president of enterprise software with CDC Software. They won't be able to muster the controls, procedures, monitoring systems and paperwork necessary to create a chain of control for every product and ingredient. The result, Payne says, will be a consolidation of producers, and even greater market dominance by the biggest players.
I hope he's wrong - even mid-sized enterprise resource planning systems, supplemented by product lifecycle and enterprise asset management tools, should be able to handle the new reporting requirements. And GFSI offers a clear path to certification for suppliers and processors alike. But there's no denying the need for additional resources and a whole new level of vigilance. We could be witnessing yet another chapter in the death of things that occupy the middle: the medium-sized retailer, the mid-budget movie, the middle class. Survivors will either be too big to fail, or too small to bother with. What a future.
- Robert J. Bowman, SupplyChainBrain
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