Perspective. Supply Chain Management (SQM) Risk Assessing Your Supply Chain
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1 Perspective Supply Chain Management (SQM) Risk Assessing Your Supply Chain
2 What is Risk? the scientific evaluation of known or potential adverse health effects resulting from human exposure to foodborne hazards - WHO
3 Risk Assessment Model - Matrix More appropriate for HACCP based assessments focusing on a specific hazard at a specific process step or stage Probability Severity RISK
4 Typical Food Supply Chain Potential risk added as complexity of chain increases Distributor Retailer Agent Supplier You Broker Retailer Broker Agent Retailer RISK RISK RISK RISK RISK RISK
5 Supply Chain Mapping Agent Agent Dist Supplier Material You Broker
6 Challenges Resources Risk assessment is a scientific process and requires the input of human, financial and technical resources Data and Collection Risk assessment requires quality data which needs to be sourced, reviewed and used Increased Workload The volume of assessments have increased dramatically moving from category assessment to individual assessments e.g. facility, materials, production line etc. Methodology and Models Many food businesses are not clear on exactly how risk assessment should be conducted and appropriate models to be employed
7 What is the requirement for conducting risk assessment on your supply chain? GFSI Standards The company shall undertake a documented risk assessment of each raw material BRC I7 3.5 FDA FSMA Rules Supplier Verification - risk assess individual suppliers, supplier facilities and products Retailers All suppliers to the site must be assessed to determine the overall potential risk associated with their materials on an ongoing basis TFMSv6Sec 3
8 Types of Supply Chain RA Required Food Safety Hazards Traditional HACCP based food safety risk assessment to identify and control food hazards e.g. bacterial pathogens, chemicals and physical hazards Food Threats Food Defense Plans, Vulnerability Assessments, TACCP Food Fraud Assessment of food fraud potential and control of risks Legality Assessment of the legal compliance of the supplier, facility and product
9 Scope of Risk Assessments Required On Your Supply Chain Suppliers Supplier entity with title of ownership Facilities Individual facilities accounting for local objective risks Agents / Brokers Assessed as a supplier 3 rd Party Must be within the scope of assessment and addressed as a facility Raw Materials Individual raw materials, ingredients, packaging Products Traded products where title of ownerships is assumed - FSMA
10 Supplier & Materials Risk Assessment Process Data Collection Correction Risk Assessment (without Controls) Control Measures Risk Assessment (with Controls) Decision Repeat Assessment Process needs to be repeated every 1 to 2 years Data Collection Questionnaire Certificates Statements Specifications Hazard Data Correction Missing or incomplete data / documents RA (without controls) Based on data collected Risk assessment of Supplier Supplier site Ingredients Materials Criteria Required Control Measures Appropriate Control Measures are determined Decision Trees Criteria RA (with controls) Additional risk assessment following the identified controls to ensure risk is mitigated to an acceptable level Decision Supplier and / or Material is approved Suppliers List is updated
11 Risk Assessment Model Criteria Model More appropriate for Supply Chain risk assessments looking at various risk factors contributing to supplier or material risk Criteria 1 Criteria 2 Criteria 3 Criteria 4 RISK Risk Weighting Some risk criteria will contribute more to the overall risk value some will contribute less
12 Type of Sample Criteria GFSI / Other Certification Has the supplier / facility achieved some 3 rd party certification standard? Assign risk values to criteria COA / COC Does the company issue certificates of analysis or conformance? Country of Origin This criteria involves referring to public databases on the history of food safety from particular countries or regions including likelihood for food fraud Weight criteria Recall / Alerts in Last 24 Months Measuring the number of recalls, alerts, notifications, withdrawals, sanctions over a recent period may indicate the level of risk with a particular supplier Allergen Controls Are additional allergens handled in the facility Volume of Supply Integrating exposure into the RA. The greater the volume the greater the exposure should an issue arise
13 Country of Origin Criteria Objective Data World Governance Indicators For example, the Worldbank WGI definition, calculating the average of their factors and then putting the threshold at 60%, to get either a risk country (<60%) or a Low Risk Country version_ pdf
14 Conducting your risk assessment
15 Perspective Increasing Burden The amount of risk assessments on supply chain will continue to increase Visibility Timely / real-time visibility over your supply chain Supply Chain Mapping Efficiency The focus will shift to improving the efficiency by which supply chain risk assessment are carried out Model Complexity Move towards multi-criteria based assessments over simple matrix will continue Automations Shift towards IT solutions and use of Portals to collect data and automate renewals Data Increase in the sharing and utilisation of supply chain data for conducting risk assessments
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