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Parker Associates, LLC
Food Safety Management Consulting
The SQF Standard:
Brought to You by Your Retail Customers
Alan Parker
Parker Associates, LLC
June 15, 2010
Copyright 2010 Parker Associates, LLC
Our Standards of Conduct
1. Share everything.
2. Play fair.
3. Don't hit people.
4. Put things back where you found them.
5. Clean up your own mess.
6. Flush.
7. Take a nap every afternoon.
8. Don't take things that aren't yours.
9. Say you're sorry when you hurt somebody.
10. Wash your hands before you eat.
11. Warm cookies and cold milk are good for you.
12. When you go out in the world, watch out for traffic, hold hands and stick together.
ALL I REALLY NEED TO KNOW I LEARNED IN KINDERGARTEN
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Parker Associates, LLC
Food Safety Management Consulting
Our Food Safety Standards
• Public Sector Organizations– Food and Drug Administration enforces
Good Manufacturing Practices regulations (GMP’s)
– GMP’s essentially unchanged since early 1970’s
– Certain industry sectors have specific requirements
• Low Acid & Acidified Canned Foods
• Seafood Industry – mandatory HACCP
• Juice Industry – mandatory HACCP
• Meat & Poultry Industries – USDA has stringent requirements
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Parker Associates, LLC
Food Safety Management Consulting
FDA Science Board: “The demands on the FDA have soared.”
• Extraordinary advances of scientific discoveries,
• Complexity of the new products and claims submitted to FDA for review and approval,
• Emergence of challenging safety problems,
• Globalization of the industries that FDA regulates.
FDA Has Been Overmatched
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Parker Associates, LLC
Food Safety Management Consulting
FDA Inspectional Activity
• On average, FDA inspects less than a quarter of food facilities
each year, and the number of facilities inspected has declined
over time.
• Fifty-six percent of food facilities have gone 5 or more years
without an FDA inspection.
• The number of facilities that received OAI classifications has
declined over time.
• FDA took regulatory action against 46 percent of the facilities
with initial OAI classifications; for the remainder, FDA either
lowered the classification or took no regulatory action
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Parker Associates, LLC
Food Safety Management Consulting
FY
No. Facilities
Subject to FDA
Inspection
No. Facilities
Inspected
Percentage of
Facilities Inspected
2004 59,305 17,032 29%
2005 61,930 15,773 25%
2006 62,929 14,547 23%
2007 65,520 14,339 22%
2008 67,819 14,966 22%
Source: OIG analysis of FDA data, 2009.
Food Facilities Inspected by FDA, 2004–2008
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Parker Associates, LLC
Food Safety Management Consulting
During this 20 year period:
• FDA gained only 646 employees — an increase of 9
percent.
• The number of FDA employees in 2007 was roughly the
same number as 15 years earlier.
• FDA lost more than $300 million to inflation.
• The appropriated budget of all of FDA for 2007 was
approximately $1.6 billion.
• Food Safety programs represented only 36% of that
budget.
FDA Resources 1988 - 2007
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Parker Associates, LLC
Food Safety Management Consulting
FDA Food Safety Funding
Since 2007
• $1.05 billion in 2010, an 18% increase over 2009;
• 30% increase forecast for 2011, to $1.37 billion;
0
200
400
600
800
1000
1200
1400
2007 2008 2009 2010 2011
• 75% of the increase to come from
industry as user fees
• Two points of comparison:
• FSIS (USDA) to receive less than
2 percent increase to $1.046
billion for 2011;
• HHS allocates $3 billion for
HIV/AIDS prevention and
treatment activities in 2010.
FDA Food Safety Budget (in millions)
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Parker Associates, LLC
Food Safety Management Consulting
Into the Breach: Private Sector
Standards
• Over the past 20 years, grocery retailers have taken
the lead role in dictating food safety programs for
their suppliers.
– Multiple control programs: audits & standards
– Mandatory compliance from all suppliers
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Parker Associates, LLC
Food Safety Management Consulting
Food Retailing Has Changed -
that was then...
• Retailers saw
themselves as
caretakers.
• Small number of
sku’s.
• Most foods were
dried or canned.
• Aside from issues of
negligence, there was
little need to focus on
the safety of foods.
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Parker Associates, LLC
Food Safety Management Consulting
….and this is now
• 30,000 or more sku’s per store
• Take-out foods -appetizers, entrees, sides, and desserts;
• Foods often prepared in store;
• Foods sometimes consumed in the store;
• Many PHF’s on the menu.
Dramatic increase in
complexity of stores:
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Parker Associates, LLC
Food Safety Management Consulting
Internal F/S Controls by Retailers
• Follow the U.S. Food Code, although regulated only at state and local level
• Training & exams (ServeSafe or the equivalent)
• Internal audits at store level
• Third party audits
• Computerized temperature control systems
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Parker Associates, LLC
Food Safety Management Consulting
Assertive Supply Chain
Management
• Preferred supplier lists
• Laboratory testing for KPI’s
• 2nd party and/or 3rd party audits required
– Multiplicity of audits: time, expense, complexity for
suppliers
• Adoption of international standards
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Parker Associates, LLC
Food Safety Management Consulting
Globalization of Retail Chains
• North American firms beginning to find international success
– WalMart & Sam’s Club - 3,242 stores in 13 countries
– Costco stores in Mexico, Asia, UK
• Numerous European chains now operating in U.S.
– Royal Ahold: Stop & Shop, Giant Food
– Delhaize: Food Lion, Hannaford Bros.
– Tesco: Fresh & Easy
– Aldi: German retailer
– Carrefour: in Canada and Mexico, U.S. next?
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Parker Associates, LLC
Food Safety Management Consulting
Grocery Trade Associations
• North American grocery retailers belong to the Food Marketing Institute (FMI)
• European grocery retailers founded the Global Food Safety Initiative(GFSI) in 2001
– CIES was former name of the European grocery trade association
– Now merged and part of Consumer Goods Forum
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Parker Associates, LLC
Food Safety Management Consulting
GFSI Approved Standards
• Different standards are benchmarked for equivalence
in food safety requirements
– British Retail Consortium Standard (BRC)
– German/French Standard (IFS)
– Dutch HACCP Standard
– Safe Quality Food Standard (SQF) from Australia
– ISO 22000 Standard approved with modifications in 2009
• WalMart letter to suppliers requires compliance with
any of the GFSI approved standards.
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Parker Associates, LLC
Food Safety Management Consulting
History of the SQF Standard
• Developed in western Australia in late 1990’s
• Very effective tool for Australian retailers
• Received GFSI approval in 2005
• The standard was purchased in its entirety by FMI
and brought to the U.S., also in 2005.
• Under pressure from FMI board, major US retailers
began adopting SQF in 2007.
• WM letter to suppliers written in Jan 2008.
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Parker Associates, LLC
Food Safety Management Consulting
Major US Firms Adopting SQF
• WalMart
• US Foodservice
• Stop & Shop
• Giant
• Price Chopper
• Lund’s & Byerly’s
• HEB
• Food Lion
• Hannaford Bros.
• Under review and
consideration at many other
firms:
– Kroger
– Wegman’s
– Harris Teeter
– Costco
– Sysco
– Yum Brands
– McDonalds
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Parker Associates, LLC
Food Safety Management Consulting
Not Just Another Audit
• Unites Food Safety and Food Quality under one
integrated standard.
• For retailers it offers several additional differentiating
features:
– Versatile
– Rigorous Generates confidence in suppliers
– Robust
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Parker Associates, LLC
Food Safety Management Consulting
SQF is Versatile…
• Two SQF standards are applied
to food suppliers:
– SQF 1000 Standard: For Primary
Producers (farming and ranching
operations)
– SQF 2000 Standard: For food
processors
• 34 Food Sector Categories
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Parker Associates, LLC
Food Safety Management Consulting
Three Levels of Implementation
Level 1
Level 2
Level 3
Food Safety
Fundamentals
Food Safety
Management
Integrated Quality
Management
Food Quality
Plan
HACCP Plan
Prerequisite
Programs
Most retailers are asking suppliers for SQF Certification at Level
2 as an initial requirement.
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Parker Associates, LLC
Food Safety Management Consulting
SQF 2000 is Rigorous at All
Three Levels
• Prerequisite Programs required are extensive:
GMP’s
Food Defense Protocol
Allergen Management
Traceability and Recall
Supplier Approval Program
Waste Management Plan
Crisis Management Plan
• SQF promotes a systems approach
• Auditors are SME’s in the commodity being audited
– May challenge logic used in HACCP Plan
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Parker Associates, LLC
Food Safety Management Consulting
SQF is Rigorous at All Levels
• Documentation requirements are very extensive:
Written policies and procedures
Document control program required
Written specifications for ingredients, packaging, finished
products and for contract services
Register of training programs
• Physical site requirements are stringent, but not
significantly different from other standards.
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Parker Associates, LLC
Food Safety Management Consulting
SQF is Robust
• SQFI closely regulates
processes
• Potential Conflict of
Interest is regulated
• Changes managed
carefully thru Technical
Advisory Committees
• Industry input is solicited
• Well-developed
database of certified
suppliers
SQFILicenses
Accreditation
Bodies
Licenses
Certification
Bodies
Registers
Auditors
Registers
Consultants
Licenses
Training
Centers
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Parker Associates, LLC
Food Safety Management Consulting
Managing the Certification Process
Train key staff in
Implementing SQF Systems
Public classes
Private, on-site training
Designate an SQF PractitionerPersonal responsibility for SQF System
Prior HACCP training
Perform a Gap AssessmentPractitioner, Consultant, or CB leads
Close any gaps identified
Schedule Certification AuditAllow for possible delays in availability
Perform required corrective actions
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Parker Associates, LLC
Food Safety Management Consulting
Certification Bodies
CB’s Based in the U.S.• AIB International
• National Sanitation Foundation (NSF)
• Silliker Certification Services
• Steritech Group
CB’s Based Outside U.S.
• Bureau Veritas (France)
• Det Norske Veritas (Norway)
• Societé General du
Surveillance (SGS)
• TUV SUV America
See the SQFI website for a complete listing of CB’s
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Parker Associates, LLC
Food Safety Management Consulting
About the Audit
• Audit generally 2 –3 days in length– Day 1: Document Review
– Day 2: Site Assessment using checklist
• Multi-level scoring of audit– Each non-conformance is classified as Minor, Major, or Critical
– Each has a specified point score
– Numerical and letter grade assigned
• Grade C or better receives certification
• Grades A or B are audited annually
• Grade C requires a 6-month re-audit
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Parker Associates, LLC
Food Safety Management Consulting
Non-Conformances
• Non-conformances are rated Minor, Major or Critical
• Non-conformances within a System Element:
5 or More Major Non-
Minors Conformance
3 or More Critical Non-
Majors Conformance
Audit failure
15 or More Critical Non-
Minors Conformance
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Parker Associates, LLC
Food Safety Management Consulting
To Summarize …
• SQF is a stringent standard – initial compliance costs
are high.
• Broad goal of the SQF program is uniformity of
standards at a reduced cost to suppliers.
• ―Once audited, universally accepted‖
• Accepted by retailers, foodservice firms, even
regulatory agencies
– FDA recognition of 3rd party audits is under discussion
• Pay back for initial investment should come quickly.
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Parker Associates, LLC
Food Safety Management Consulting
Thanks for your attention!
Alan Parker
Parker Associates, LLC
Annapolis, MD
410-349-8708