By Sudhakar Kaup, Chief Technology Officer, iRely

On Jan 4, 2011, President Barack Obama signed into law the Food Safety Modernization Act (FSMA), billed by the FDA as the most sweeping reform of our food safety laws in more than 70 years. A measured phasing in of the laws new rules caused initial confusion about which rules would actually be enforced. Finally, after two years, details about regulations for produce and preventive controls were released in January of 2013.

Despite the new guidance, however, it still appears that most process manufacturing organizations are unaware or uncertain at how the stricter regulations will affect their production processes. This is the finding of a new study of food and beverage manufacturing professionals across the county. Conducted by iRely, a leading provider of process manufacturing and commodity trading software, survey data confirms that while food & beverage manufacturing leaders are mostly aware of the new requirements, they are still getting up to speed with the necessary changes.

Of the survey respondents, 71% agreed that the new FSMA regulations would directly affect their operations. But when asked which one requirement would affect them most, the most common answer was “unsure” with 47%. In addition, respondents listed “uncertain or unclear implementations” (44%) as their biggest concern about new FSMA regulations.

The results show that a startling number of manufacturers are still either unaware or unconcerned with the new regulations, ones directly tied to the quality and safety of end products.

Adding to the concern is the fact that according to the survey, many companies don’t have plans to upgrade technology and/or resources in order to meet the regulations.

According to the FDA, FSMA upgrades to ensure full compliance with new tracking rules should cost the average manufacturing facility around $13,000 per plant. Yet when asked if the FSMA regulations have affected their ability to plan/budget for 2013, 45% of respondents answered no, they have not addressed the FSMA guidelines.
 

Many companies still rely on basic ERP systems or even spreadsheets to track and manage the production process. The FSMA regulations clearly define the need for improvement in electronic record keeping and auditing which would require more advanced technology to properly report all the necessary items.

In fact, most did not plan on increasing resources at all. A total of 76% of respondents answered that they were not looking to increase their number of employees or resources to address FSMA requirements. One particularly new stipulation of the FSMA is that mock recalls be carried out more frequently. In most organizations, a mock recall can take days or even weeks to complete and normally require the involvement of staff from multiple departments. Based on that fact alone, an increase in resources would seem to be needed to be prepared for these additional mock recalls. The new regulation gives the FDA new power to levy fines and access fees. This new power along with the new authority to mandate a recall and under certain conditions suspend a company’s registration without a court order should be a wake-up call for food manufacturers. The FDA has already shown that they can and will use this new authority, as proven by their shutdown of Sunland Inc.’s New Mexico plant last November. Companies using new adaptable manufacturing systems would not only be covered from these immediate threats but also be proactively prepared to tackle additional FDA regulations down the line.

The reticence to upgrade plant tracking technology may be a lingering effect of the uneven economic recovery. Companies have generally held more cash as indicators such as unemployment have pointed to both an improving economy and one slipping back into recession. Any investments being made today are directly related to cost cutting or revenue improving. Preparing for more stringent regulations outlined in the FSMA may cut costs in the long run, but in the short term are being viewed by many as purely overhead costs.

Another main factor that could be holding plants back is the current technology in place. Many companies still rely on basic ERP systems or even spreadsheets to track and manage the production process. The FSMA regulations clearly define the need for improvement in electronic record keeping and auditing which would require more advanced technology to properly report all the necessary items.

Survey responses supported this trend. While 76% of respondents did say they currently use a quality control management system, nearly 45% of respondents admitted to using spreadsheets or other manual processes to manage traceability, quality and inventory issues.

A final reason companies are not planning for FSMA-related improvements is skepticism the rules will actually be enforced. If that’s the case, plant owners should be aware that the Congressional Budget Office had budgeted around $280 million per year for enforcement of these new rules. While much less has actually been appropriated to date, President Obama’s administration has already stated the importance of this program and their belief that they have enough political capital to increase funding for enforcement.

In fact, most food & beverage manufacturers don’t need to change their entire ERP to earn FSMA compliance. 

Ultimately, failure to comply with the rules of the FSMA could result in fines that would easily pay for improvements to plant ERPs and tracking platforms.

When asked if they would start using an automated system now that FSMA regulations are in play, 76% of respondents said no because their system is already compliant.

This reveals of startling disconnect between the FDA’s claim that most facilities would need to be updated to meet new regulations and the management’s claim that they do not plan to improve upon their current system.

The answer may lie somewhere in between but the survey indicates a strong need for the FDA and government to better educate and enforce the regulations of the FSMA. Facilities managers also hold the burden of better tracking and tracing technology, allowing them to both meet and pass potential FDA audits or recalls, as well as ensure customers their food and/or beverages have no contamination or quality issues throughout production.

In fact, most food & beverage manufacturers don’t need to change their entire ERP to earn FSMA compliance. Unique manufacturing operations management software is available that can integrate into their current ERP, and help achieve FSMA compliance.

Finally, one of the most compelling reasons for compliance may be that when rules and guidelines are loosely defined, the chance of winning a court case against a manufacturer is pretty hard. But once rules and regulations are more clearly defined, as they have with the release of FSMA guidelines, litigation is more attractive because then lawyers can attack all of the little nuances of the regulations and look for any small mistake or incorrect interpretation a manufacturer may have made.

As Benjamin Franklin said “An ounce of prevention is worth a pound of cure”.

 

About iRely LLC
iRely, LLC is a leading provider of software for physical commodities. iRely serves 400+ customers including feed/food manufacturers, commodity traders and cooperatives in over 12 countries from its headquarters in Fort Wayne, Ind. iRely operates additional offices in USA, UK, India, and the Philippines managed by a 200+ strong team. For more information, visit www.iRely.com.