Many of us do our shopping online, where we often first “meet” a product by reading a description and seeing a picture, rather than seeing it on a shelf in a store. Because of that, it can be eye-opening to see that companies are including factors other than the physical quality of their product, and presenting it up-front, rather than burying it in a section labeled “See more information.” Here, for example, is a food-industry description of a product anyone can find online right now.
Premium MCT Oil from Organic Coconuts. Huge 32 Oz. Easier To Absorb and Digest. Triple Filtered. Independent Quality Testing for every batch. Keto & Paleo Friendly. Made in USA.
For our purposes, several things stand out in this marketing material. Given that this product is more expensive than similar ones, here is what the company feels justifies the higher price:
- The process of triple-filtering.
- The QA of independent testing.
- The country of origin.
This is an example of a description we find ever more frequently: one that addresses customers’ interest in various dimensions of process and QA.
An increasing number of sellers across industries are seeing the writing on the wall, and are therefore using factors related to the manufacturing process as leverage for increasing their margins. Obviously, employing QA processes like independent testing also greatly reduces the risk of finding themselves in a supply chain quality breakdown.
In addition to online shopping, at the opposite end of the food spectrum is the burgeoning market share of farmers’ markets, where signs like the one below point to a similar awareness.
The seller is pointing to factors well beyond taste and nutrition. It emphasizes not only the process of how the cattle are raised, but also its effect on the environment. In addition, a margin-building aspect with which they end, as a “piece de resistance,” is another QA factor: traceability. The supply chain is short and transparent.
Legality in the Food chain: the Food Safety Modernization Act (FSMA)
FSMA was signed into law by President Obama on January 4, 2011. It was created during a lengthy, bipartisan process to ensure that the U.S. food supply safety. FSMA shifted the focus of regulation from responding to contamination to preventing it in the first place.
This legislation is much more than a package of new regulations. As the first major change in how our food supply is regulated in 70 years, it is specifically addressing the new reality of how much more complex the system that brings it to the nation’s table has become. Among the many things the act addresses, there are aspects directly related to what companies are identifying as consumer concerns and values. This includes a mandate for testing of goods by accredited laboratories, as well as a demand for much more rigorous record keeping. In addition, the Act demands enhanced product tracing abilities (a system that will enhance its ability to track and trace both domestic and imported foods.)
In addition to the precedent-setting powers and rules above, the FDA’s power is leveraged by a directive to collaborate with other governments and agencies, as well as including inspections performed by other federal, state and local agencies to meet the greatly increased mandates for oversight.
Documentation as a Competitive Advantage and Margin Builder
While not many consumers will contact a company like the one selling the Premium MCT Oil product in order to obtain copies of the laboratory test results, a precedent is even now being established for consumers to take matters into their own hands.
In January of 2015, again for example using the food industry, it was reported that tests found 11 out of 12 pet food varieties contained bacteria considered serious health threats by the U.S. Food and Drug Administration (FDA), such as Staphylococcus and Acinetobacter, including drug-resistant varieties…and 4 out of 8 had medium or high levels of fungal toxins.
One of the most stunning results from the contaminated pet food was that the tests were funded by ordinary people – 240 pet owners who put together a fund of $15,705 to test lots of pet food. People are becoming more proactive, rather than trusting companies to do the right thing.
Consumers are much more aware of the processes used to guarantee quality than they were in the past.
It’s reasonable to assume that:
- Companies should expect inquiries about product testing directly from consumers.
- Companies (at any point in the supply chain) should be able to respond quickly and clearly to such requests in order to have a competitive advantage.
- When breakdowns occur, it is the final (and most visible) brand that bears the cost of the breakdown, no matter how far down in the multi-tier supply chain the breakdown actually occurred.
Responsiveness to consumer concerns
Returning to the examples from above, the oil and the beef, the next issues that are likely to appear on the horizon (and that will be used by innovative companies to gain competitive advantage) are (a) the ability of a company to prove the assertions related to testing, as well as, (b) traceability. Isn’t it possible to imagine consumers being enabled to go online and see laboratory results for themselves? To examine the Country of Origin certifications and Certificates of Analysis? This may seem outlandish today, it is no more outlandish than the idea of consumers funding their own testing of pet food.
More Scrutiny in the World of B2B
Given the interest in QA at the level of consumers across industries, it seems reasonable to expect other players in a supply chain will become interested in seeing documentation, not just hearing about it. Observing the level of recalls in the automotive industry and the disastrous breakdowns around Japanese steel in the past year (but dating back more than a decade), the level of concern is justified. Brand managers are constantly facing decisions to either manufacture in-house, outsource, or to buy from distributors. In any case, the requirement for QA proof is unavoidable.
What kind of documentation is the most convincing, leading to the most stable, long-terms relationship for OEMs and distributors with their customers and suppliers?
The answer is that the documentation must be:
- Easily turned into actionable knowledge
The only kind of supply quality management system fitting those criteria is one that is electronic and powered by Statistical Process Control. Other attempts to respond to these growing demands for quality data, that require taking information on faith, and/or utilize paper or scanned reports are simply not effective. Those approaches are simply not up to the task, since their ability to respond quickly to material performance trends, pinpoint the chain of ownership, and safeguard the underlying processes are questionable. Plus, we want fair warning when disaster may be lurking over the horizon.
EMNS, Inc. has the solution, and it’s easy to read about at www.gsqa.com.