Tools for effective vendor management
Compliance, communication and control are the cornerstones of a solid vendor management program. When working with vendors, it is important to ensure they understand the compliance expectations and verify they are meeting the agreed-to standards. Regardless of the size of the processor and the volume of food processed annually, vendor management programs should be a high priority.
Successful vendor management meets the needs of both developers and processors. As the supply chain increasingly turns global, processors must manage vendors from multiple points around the world. It is crucial to set up best practices to ensure food safety is the priority. The program is constantly evolving to meet changing standard and customer needs.
Many processors identify a single point of contact within the company to oversee compliance and eliminate possible risks. At OSI Group, Aurora, Ill., the vendor management program is categorized by ingredient type and storage requirements, such as poultry, beef, dry ingredients, cold storage, etc.
Before agreeing to partner with a new vendor, the processor should institute new vendor guidelines, including:
- Establishing a system for research and development to follow when buying an ingredient from a new vendor.
- Obtaining a pure food guarantee from the supplier.
- Setting up a system where each approval triggers other steps.
- After approval is granted, consistent communication on compliance expectations and alerts is needed, including emails.
- Supplying plants with a checklist of approved vendors is important to the integrity of the program.
OSI requires all new vendors to follow a protocol that includes completion of a questionnaire on the label-country of origin, makeup of ingredients, allergen declarations, storage requirements and shelf life, among other items. It is imperative to know labeling and storage requirements in advance before approving use of any new ingredient. Vendors will be asked to share third-party compliance reports or audits and supply specifications on the new ingredient.
The last step in the process is the review of the vendor, which is conducted before decision on approval is made. If the ingredient is a high-risk category such as meat or poultry, the final review most often includes a site visit. If the ingredient under consideration is non-pathogen carrying (such as bread crumbs or salt), a lower-risk audit review may be performed. A risk assessment is made based on the sourcing process, number of facilities using the same ingredient and risk of pathogens.
In addition, many processors will manage a quality assurance check on new vendors, including communication with existing vendors and key stakeholders on the approved list of vendors. Under this program, a new vendor isn’t finalized and set up in the processor’s system until quality assurance approval is received.
Some processors use third-party services to manage all vendor documents as a resource to channel and organize the large number of documents generated for vendor approval from a quality perspective. In addition, with the enactment of the Food Safety Modernization Act (FSMA) in 2016, processors are required to follow a new level of stringent guidelines. On occasion, suppliers may use the same third-party services, making it easier to link to them and provide the proper documentation. With the same process, it becomes very fluid and efficient to share information.
Even processers that have diligently been tracking vendors through a comprehensive management process need to examine their programs to see what is helping and what may be hurting progress.
Through implementing systems and better understanding of ingredient sourcing, food processors can avoid issues by purchasing single-sourced ingredients, for example. Companies can avoid a problem by identifying risks in advance.
A vendor management program helps manage and approve vendors, but it can also enable processors to develop and use feedback regarding vendor compliance to utilize when evaluating vendor performance. Arranging quarterly reviews of high-risk ingredients or annual reviews of lower-risk ingredients and utilizing readily accessible tools such as audits, compliance reports and email communication are all useful elements in a successful vendor management program.