Public Law 111-353, the "FDA Food Safety Modernization Act" became law on January 4,

2011. The law consists of eighty-eight pages and four titles that are destined to affect every

nation, virtually all food products and practically any company engaged in the growing,

processing, manufacture, distribution and selling of food products.

The Food Safety Modernization Act (FSMA), grants the FDA new authorities that allow the

agency to better ensure the safety of food. The FDA has an expanded legislative mandate to

require comprehensive prevention-based controls across the food supply and new tools to hold

all players in the supply chain accountable, including mandatory recall authority and the

administrative detention of food. The law covers both domestic and foreign producers. Further,

the law represents a significant shift in the area of imports.

Importers will now have the explicit responsibility to verify that their foreign supplies have

adequate preventative controls in place and that the food they ship to the United States is safe.

U.S. producers will have to know that their vendors are in compliance. The FDA has the power

to establish a third-party program for certifying that foreign food facilities comply with U.S.

standards, to require certification as a condition of entry of certain high-risk foods, and to reject

entry of food if the foreign facility or country refuses an inspection by FDA or its designee. The

FSMA also encourages arrangements with foreign governments to leverage resources, provide

for mutual recognition and capacity building.

The 'globalization' of the food and drug supply chain is evident when you consider that between

10% and 15% of all food consumed by U.S. households is imported. Nearly two-thirds of the

fruits and vegetables and 80% of seafood consumed in the United States come from outside the

U.S. Half of all medical devices and nearly 80% of the active pharmaceutical ingredients in

medications sold here are manufactured elsewhere. The FDA calculates that imports to the U.S.

currently arrive from more than 300,000 facilities in 150 different countries and that shipments

will triple by 2015.

Even U.S. based companies face the probability that some ingredient and some point in time will

be imported or exported. Producers and manufacturers face intense pressure to lower costs,

improve productivity and insure an uninterrupted supply chain. The rise of emerging markets,

the scarcity of natural resources, and the increased flow of capital, information and goods across

borders means the distinction between foreign and domestic products will continue to blur while

increasing the complexity for regulators.

Goods entering the U.S will come from new and different markets, flowing through long multi-

step processes to convert globally sourced materials into finished goods. The shift will make it

difficult to identify the source of a product and to ensure that all players along the supply chain

meet their safety and quality responsibilities. Additionally the FDA must contend with even

more sophisticated threats of fraud, product adulteration and even terrorism. In order to cope

with the fundamental shifts in the market, the FDA has committed to substantially and

fundamentally revising its approach to global product safety and quality. Over the next decade,

the FDA will transform itself from a domestic agency operating in a globalized world to a truly

global agency fully prepared for a regulatory environment in which product safety and quality

know no borders.

The FDA plans to achieve this transformation by developing an international operating model

that relies on enhanced intelligence, information sharing, data-driven risk analytics, and the

smart allocation of resources through partnerships.

The FDA’s approach is based on four core building blocks, where the department will:

1. In close partnership with its foreign counterparts, assemble global collations of regulators

dedicated to building and strengthening the product safety net around the world.

2. Push for the development of a global data information system and network in which

regulators worldwide can regularly and proactively share real-time information and

resources across markets.

3. Continue to expand its capabilities in intelligence gathering and use, with an increased

focus on risk analytics and thoroughly modernized IT capabilities.

4. Work to effectively allocate agency resources, based on risk, leveraging the combined

efforts of government, industry, and public and private sector third parties.

What we know is:

1. Ten years from now, the global supply chain be very different than it is today.

2. The coming changes will make the FDA’s -and the consumer goods industry’s- product

safety and quality responsibilities qualitatively and quantitatively more complex.

3. The FDA is substantially changing its operating model to address these challenges such

that CPG companies must correspondingly adjust their vision and capabilities.

4. The FDA has articulated a strategy, with four primary components, to address the coming

challenges.

What This Means for You and Your Company

Globalization is moving from 'business trend' to enforceable regulatory law. The regulatory

foundation is moving from blueprint to construction. Compliance is not optional! What's

next…what’s after next, is implementation.

Implementation starts with one simple question that is the same for C-level and general

management: "How is my organization going to ensure that business-critical information is

available, reliable, consistent, and borderless?"

First, an organization has to brace and prepare itself for an information deluge. Second, an

organization has to be able to make sense of the facts pouring in through easily accessible

decision support systems and actionable reporting capabilities. Third, an organization has to

understand that available, reliable, consistent and borderless business critical information is no

longer a 'want', it is an operational requirement.

The nuts and bolts: Master Data Management! MDM is a powerful equation comprised of

people, processes, and technology.

The objective is a single, common network that allows trading and regulatory partners at all

levels of sophistication to participate to the degree that is most prudent or required for their

needs, and in the media that is best aligned to their capabilities.

Four 'streams' must converge to enable trading and regulatory partners to deliver accurate,

essential product information through all channels, including:

1. Harnessing the Data Explosion - Be prepared to incorporate both structured and non-

structured data. Digital assets, analytics, aggregation, authentication and services to

support integration with business processes and disciplines must be considered.

2. Ensuring Data Quality and Authenticity - There has to be a clear understanding of the

necessary audits and controls to support data accuracy and maintain authenticity through

the product data management network. These disciplines are critical to ensure brand

integrity and mitigate risks of faulty data.

3. Navigating the Complexity - Data flow travels through a complex ecosystem of

processes and systems many of which can fail to maintain the quality and integrity of the

data. Trusted data must flow through the network, regardless of medium ─ XML, flat

file, EDI. Catalogs, or web templates ─ from your own internal base, consumers of data,

regulators, small businesses with limited or no technical capabilities and all variations

between.

4. Removing Barriers - There will always be a wide range of participant capabilities in the

global supply chain ecosystem to consider. The goal is to support technologies that are

open and improve the transmission of accurate and verifiable product data between

partners. Through the use of a standardized methodology organizations will have the

ability to promote the authenticity for the products, alignment, and the effectiveness and

efficiency of business and / or regulatory transactions.

A Master Data Management strategy and capability for most is yet to be known. Over the next

ten years, its development will be mandatory. MDM is not a onetime effort, but rather one that is

regularly redefined, refined and updated. MDM requires organizational awareness and

commitment. The value of MDM is about improving, sustaining and protecting your business

through a continuous stream of available, near real-time, accurate, actionable, regulatory

compliant information.

We already know the answer to 'What's next?'… tough new regulatory requirements. Now we

need to work on 'What's next, after what's next?' … It’s MDM.

About the Authors Michael Forhez, who regularly writes for and speaks on subjects germane to the CPG industry,

is TCS's Director of Business Solutions for the Consumer Markets, a vertical he has served for

over twenty years.

Dan Wilkinson is the Vice President, Industry Development, for 1SYNC, a wholly owned

subsidiary of GS1US, dedicated to the adoption and implementation of standards-based, global

supply-chain solutions.