FSMA: How s your food traceability? Learn best practices to stay compliant utilizing cloud ERP technologies
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1 FSMA: How s your food traceability? Learn best practices to stay compliant utilizing cloud ERP technologies 2013 Baker Tilly Virchow Krause, LLP Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. 1
2 Agenda > FSMA recent developments Preventive controls for human food Standards for produce safety > Cloud computing for food and beverage manufacturers > Plex System demonstration 2
3 FSMA recent developments 3
4 Overview of FSMA Signed into law on January 4, 2011 > Impacts food facilities including: Factory or warehouse that manufactures, processes, packs or holds food, excluding retail and farms (other exclusions) > Major elements Preventive controls Inspection and compliance Imported food safety Response Enhanced partnerships Source: 4
5 Overview of FSMA (continued) > Increases FDA authority Immediate Regulation and guidance documents > Process to issue rules FDA proposes rule and requests comments FDA considers comments and issues final rule Company complies with rule based on effective date Significant delays to date Source: 5
6 Preventive controls for human food Section 103 > Required facilities to evaluate hazards, identify and implement preventive controls to address these hazards, verify the controls were adequate based on hazards identified, take corrective action when needed, and maintain a written plan and documentation. Proposed rule > Contains new provisions requiring hazard analysis and risk-based preventive controls > Revise the existing Current Good Manufacturing Practice (cgmp) Compliance > Proposed rule: Issued January 16, 2013 with a 120 day comment period > Effective date: 60 days after the final rule is published > Compliance dates: Small businesses two years after final rule is published Very small businesses three years after final rule is published Other businesses one year after final rule is published 6
7 Preventive controls for human food (continued) Hazard Analysis and Risk-Based Preventative Controls (HARPC) Hazard analysis > Identify and evaluate known or REASONABLY FORESEEABLE hazards Preventive controls > Process, food allergen, sanitation, and recall plan controls Monitoring > Controls are being performed and documented Corrective action > If controls are not performed or required for each owner, operator or agent in charge of a facility Verifications > Required for each owner, operator or agent in charge of a facility Recordkeeping > Required for each owner, operator or agent in charge of a facility 7
8 Preventive controls for human food (continued) What to know: Does the rule apply to me? > Do you register as a food facility? Who is responsible for the plan? > Owner/operator/agent What happens after the plan is written? > Everyday obligations > Reanalyzed > Changes What records must be kept? > Prompt availability > Signed and dated > Two years Source: 8
9 Standards for the growing, harvesting, packing, and holding of produce for human consumption Section 105 > Directed FDA to set science-based standards for the safe production and harvesting of fruits and vegetables that the agency determines minimize risk of serious adverse health consequences or death. Proposed rule > Establishes science-based minimum standards for the safe growing, harvesting, packing, and holding of produce in its raw or natural (unprocessed) state on farms. > Farms are partially exempt if: Foods sales < $500K per year (three year average) AND Sales to qualified end users exceed sales to others. Source: 9
10 Standards for the growing, harvesting, packing, and holding of produce for human consumption (continued) Agricultural water > Testing to identify pathogens Biological soil amendments of animal origin > Types of treatment, methods of application, and time intervals Health and hygiene > Requirement of farm personnel Domesticated and wild animals > Required waiting period between grazing and harvesting, monitoring animal intrusion events Equipment, tools, and buildings > Set standards for certain equipment and tools, buildings, and sanitation used for produce operations 10
11 Preventive controls for human food (continued) What to know: Does the rule apply to me? > Farms, imported produce, growing, harvesting, packing Are the proposed rules commodity specific? > No!! risk-based versus commodity-based approach What records must be kept? > Must include basic information, be accurate, legible, signed, dated > Two years Requirements for personnel? > Training > Product inspection Key elements regarding ag water? > Inspect and maintain water system > Must be tested 11
12 Cloud computing for food and beverage manufacturers 12
13 Food for thought > New Economy Agility > Information Decision Making > Enablement Mobility > Workforce No longer accepts Status Quo 13
14 Convergence in the cloud Big Data In-Memory Analytics Geospatial Data Mobility Social Media 14
15 Companies evaluating business technology should consider the following list as enablers of business value > Cloud as the overall enabler; delivered in a single instance multi-tenant environment for economies of scale > Mobile which shifts power to consumers in most every value chain > Analytics to improve decision making > BPM to connect, control, and adjust processes > Event logic that interrogates internal & external factors > In-memory DB which makes big data parsing viable > Collaboration technologies connecting more than employees > Social media which facilitates sharing with countless other stakeholders > Integration technologies which bring cloud and on-premise data together > PaaS and PaaS ecosystems that deliver low cost development environments and hundreds of thousands of new apps cheaply 15
16 Technology s impact on business models New technology New processes New business models 16
17 Big data and analytics Big Data Predictive Analytics 17
18 Concluding thoughts These are very exciting times, providing companies opportunities never before possible! > Not just cloud, but enabling technologies > Opportunities companies have to respond to changing business technology environment > Capabilities organizations must develop in the current business environment 18
19 Plex Systems 19
20 Compliance and brand protection 20
21 Compliance and brand protection (continued) Current recordkeeping requirements > One up/one back traceability Stems from the 2002 Bioterrorism Act > 2005 FDA regulation on recordkeeping Where did you get it from Where did you send it to What did you do with it > Format is not specified > Lot number is only required for manufacturers if available > Exemptions for each end of the supply chain 21
22 Compliance and brand protection (continued) Why change > Compliance should not be a driver > Protect your BRAND When > Now > FDA has proposed additional requirements they haven t been released > Industry initiatives are underway > Don t be the weakest link 22
23 Recordkeeping requirements Trace forward/recall: Where did it go? Grower Processor Manufacturer Distributor Retail Trace back: What is causing illness? 23
24 Traceability with Plex Online (continued) 24
25 Traceability with Plex Online (continued) Limited visibility Costly to maintain Restricts growth Prevents collaboration Static Fragmented Data Sources 25
26 Traceability with Plex Online (continued) Cloud ERP for food and beverage manufacturers and processors 26
27 Traceability with Plex Online (continued) Locations Scanning tracks To and From locations Moves Scan everything that moves Manufacturing Scan and load all material to Work center Scan every WIP move Receiving Label everything that comes in the door VISIBILITY TRACKING TRACEABILITY GENEALOGY Inspection Quality inspection associated with every batch Outside Services Shipping Scan out to and in from outside firms Label each shipping container 27
28 Traceability with Plex Online (continued) 28
29 Traceability with Plex Online (continued) Locations Scanning tracks To and From locations Moves Scan everything that moves Manufacturing Scan and load all material to Workcenter Scan every WIP move Receiving Label everything that comes in the door VISIBILITY TRACKING TRACEABILITY GENEALOGY Inspection Quality inspection associated with every batch Shipping Label each shipping container Outside services Scan out to and in from outside firms 29
30 Traceability with Plex Online (continued) 30
31 Traceability with Plex Online (continued) 31
32 Traceability with Plex Online (continued) 32
33 Traceability with Plex Online (continued) 33
34 Traceability with Plex Online (continued) Moves Scan everything that moves Locations Scanning tracks To and From locations Manufacturing Scan and load all material to Workcenter Scan every WIP move Receiving Label everything that comes in the door VISIBILITY TRACKING TRACEABILITY GENEALOGY Inspection Quality inspection associated with every batch Shipping Label each shipping container Outside services Scan out to and in from outside firms 34
35 Barcode Labels HACCP / Quality Logs Quality Reports Maintenance Work Orders Schedule Boards Notes & Messages Production Records QC Gauge Control Molds & Tooling Work Instructions 35
36 Traceability with Plex Online (continued) 36
37 Plex Online Control Panel Welcome Food Safety Webinar Participants 37
38 Traceability with Plex Online (continued) Moves Scan everything that moves Locations Scanning tracks To and From locations Manufacturing Scan and load all material to Workcenter Scan every WIP move Receiving Label everything that comes in the door VISIBILITY TRACKING TRACEABILITY GENEALOGY Inspection Quality inspection associated with every batch Shipping Label each shipping container Outside services Scan out to and in from outside firms 38
39 Traceability with Plex Online (continued) Locations Scanning tracks To and From locations Moves Scan everything that moves Manufacturing Scan and load all material to Work center Scan every WIP move Receiving Label everything that comes in the door VISIBILITY TRACKING TRACEABILITY GENEALOGY Inspection Quality inspection associated with every batch Outside services Shipping Scan out to and in from outside firms Label each shipping container 39
40 Traceability with Plex Online (continued) Limited visibility Costly to maintain Restricts growth Prevents collaboration Static Fragmented Data Sources 40
41 Traceability with Plex Online (continued) 41
42 Traceability with Plex Online (continued) 42
43 Question and answer session?????? 43
44 Disclosure Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan, or arrangement to any other party. Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. The information provided here is of a general nature and is not intended to address specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought Baker Tilly Virchow Krause, LLP 44
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