Recent announcements that more than $1B will likely be added to the FDA’s proposed budget to improve food safety enforcement does not mean that Consumer Product companies are out of the woods on product safety. A recent survey by IBM found that 80% of consumers do not trust food companies to produce and sell products that are safe (in no small part due to media reports like this, citing Nestle’s refusal to allow FDA inspectors onsite). So there’s a serious perception issue to overcome. Second, even an extra billion dollars will not significantly change the fact that less than 2% of all US food imports are currently inspected and responsibility for US food safety enforcement is spread over multiple agencies including FDA, USDA and USCDC.

Bottom Line: Companies are on their own to take all steps necessary to manage the risk inherent in their supply chain. And as supply chains get longer and more complex, that means getting visibility and accountability into your suppliers performance as well. Doing this requires several core steps:

• Commitment: Executives need to put both their budget dollars and their voices behind a project that may not have an easily quantifiable, short-term ROI.
• Technology: The amount of data involved, the many places it currently resides, and its many formats means that you need a single, consistent repository with exception-based reporting to get you to the “needle in a haystack” of information you really need.
• A plan: We all know that flicking the switch on a system and hoping for the best will not solve a problem. Instead, you need a plan for prioritization and rollout, resources to help, and an experienced partner to help get you there.

While implementing a comprehensive supplier performance and risk management system takes time and resources, the cost is nowhere near that of a public relations disaster … or a ruined summer cookout.

Kris Colby is a Director in Ariba’s Spend Management Services group. Kris specializes in strategic sourcing and risk reduction with retail and CPG companies.