Food Forum: Doing the safety dance

By Matt Smith, icix

Transparency is of utmost importance when interacting with shoppers regarding product safety.

We continue to read and hear about unsafe products in the news almost everyday. We know, more than just intuitively, that selling unsafe products will negatively impact a retailer’s reputation with shoppers. And we now have seen examples of the serious legal and financial ramifications when products sold by retailers injure or even kill consumers.

Yet the issue of product safety remains the domain of managers and directors of quality and food safety, often only percolating up to the c-level on rare occasions. It seemingly takes a headline of a million dollar settlement or a major product recall for the c-suite to take note. How can we engage the corner office more proactively to take a lead role in ensuring product safety and driving that down through their organization?

As with everything in retail, let us start to answer that question with the shopper. Shoppers rely on retailers to provide safe products, plain and simple. If the retailer cannot provide this basic service, shoppers will run, not walk, away from their stores.

The frequency and impact of product safety issues continues to increase, with injured parties ever more litigious. This trend is expected to continue as sourcing becomes even more diverse and international, and the call for stricter compliance by government bodies and consumer groups becomes even louder.

There are some bright spots, however, in the field of product safety. Some companies are incorporating product safety into their enterprise risk analysis, addressing the issue head-on by examining the potential negative impact of a product safety lapse to both the bank account and the company’s name. In addition, current technology can address many of the challenges retailers now face on both the practical side of dealing with thousands of suppliers and the regulatory side of dealing with federal, state and local governments.

To tackle product safety issues on a company-wide basis, there are several best practices to consider implementing, starting with a risk assessment. Retailers need to know what they are facing in terms of remediation, litigation and other costs when (not if) a safety scenario hits. Only then can the potential impact be measured and planned for.

Supplier collaboration is critical, not just on procurement and fulfillment interactions, but also on compliance and safety. Not only must expectations on testing and auditing be set at the time of contract negotiation, but contingencies must be established to ensure the process works should a recall be required or an emergency arise. Likewise, trading partners must work together to guarantee regulatory compliance.

The ongoing activity of qualifying supply chain trading partners, monitoring their compliance and ensuring retailers have the right documentation each time a purchase order is placed may seem mundane, but is critical to protecting customers and the retailer’s brand. Similarly, auditing programs and systems need to be put in place with the associating monitoring and reporting to ensure all parties are keeping to their compliance and safety agreements.

Then there is headquarters, in-store and warehouse employee training. All personnel need to be made aware of the potential impact of an outbreak, a recall or another product safety scenario. This starts with training but must be reinforced with constant communication so all teams know the importance management is placing on product safety.

Finally, I started with the retailer’s focus on the customer and I will finish with it. The best way to interact with shoppers on the issue of product safety is to be totally transparent with them. Information moves quicker today than ever before. Retailers that are honest and upfront with customers on what they are doing to keep the whole supply chain safe are likely to be given the benefit of the doubt when issues arise (and they will).

My final suggestion is this—do not wait for your company to be the next headline, act now and get your product safety management system in order.

Matt Smith is the co-founder and chief strategy officer at icix, he can be reached at [email protected].