(sqm) supply chain management risk assessing your supply … · supplier quality management: risk...

Pers

pect

ive Supply Chain Management

(SQM) – Risk Assessing Your

Supply Chain

Supplier Quality Management: Risk Assessing your Supply Chain

What is Risk?

“the scientific evaluation of known or potential adverse health effects resulting from human exposure to foodborne hazards” - WHO


Risk Assessment Model - Matrix

RISKProbability Severity

More appropriate for HACCP based assessments focusing on a specific hazard at a specific process step or stage


Typical Food Supply Chain

Facility

YouSupplier

Agent

Facility

Facility

Facility

Facility

Facility

Broker

Agent

Broker

Retailer

Retailer

Retailer

Distributor

RISK RISK RISK RISK RISK RISK

Potential risk added as complexity of chain increases


Supply Chain Mapping

You

Dist

Broker

Material

Agent

Supplier

Facility

Facility

Facility

Agent


ResourcesRisk assessment is a scientific process and requires the input of human, financial and technical resources

Challenges

Data and Collection Risk assessment requires quality data which needs to be sourced, reviewed and used

Increased WorkloadThe volume of assessments have increased dramatically moving from category assessment to individual assessments e.g. facility, materials, production line etc.

Methodology and ModelsMany food businesses are not clear on exactly how risk assessment should be conducted and appropriate models to be employed


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

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Food Safety HazardsTraditional HACCP based food safety risk assessment to identify and control food hazards e.g. bacterial pathogens, chemicals and physical hazards

Types of Supply Chain RA Required

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


Scope of Risk Assessments Required On Your Supply Chain

Suppliers

Supplier entity with title of ownership

3rd Party

Must be within the scope of assessment and addressed as a facility

Facilities

Individual facilities accounting for local objective risks

Raw Materials

Individual raw materials, ingredients, packaging

Agents / Brokers

Assessed as a supplier

Products

Traded products where title of ownerships is assumed - FSMA


DecisionData Collection Correction

Risk Assessment

(without Controls)

Control Measures

Risk Assessment

(with Controls)

Supplier & Materials Risk Assessment Process

Repeat AssessmentProcess 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


Risk Assessment Model – Criteria Model

RISKCriteria

1

More appropriate for Supply Chain risk assessments looking at various risk factors contributing to supplier or material risk

Criteria 2

Criteria 3

Criteria 4

Risk WeightingSome risk criteria will contribute more to the overall risk value – some will contribute less


GFSI / Other Certification Has the supplier / facility achieved some 3rd party certification standard?

Type of Sample Criteria

COA / COC Does the company issue certificates of analysis or conformance?

Country of OriginThis criteria involves referring to public databases on the history of food safety from particular countries or regions including likelihood for food fraud

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 SupplyIntegrating exposure into the RA. The greater the volume the greater the exposure should an issue arise

Assign

risk

values to

criteria

Weight

criteria


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

• http://www.bsci-

intl.org/sites/default/files/countries_risk_classification_final_

version_20140109.pdf


Conducting your risk assessment


Increasing Burden The amount of risk assessments on supply chain will continue to increase

Perspective

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

(sqm) supply chain management risk assessing your supply … · supplier quality management: risk...

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