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Learning from Crisis – Building a Robust Supply Chain

By Dileep Kulkarni

During the Covid crisis, many companies have experienced supply chain issues.    This current recovery period is an opportunity assess the lessons learned.   Here are four “do it yourself” assessments that will help you build a robust supply chain that gives you competitive advantage.

Identify Critical Supply Chain:

Many companies procure large numbers of products and services, but not all of these have the same criticality.   It is important to assess and document your Critical Supply Chain.     Critical Supply Chain consists of components or services needed to build and ship products.  Most of the us think of the bill of materials when we imagine our Critical Supply Chain, but other services such as logistics and consumable products like gloves, etc. are also part of the Critical Supply Chain.  During this crisis – Personal Protection Equipment (PPE) has become a Critical Supply Chain component.   The rest of the supply chain is important but offers more leeway.

Take stock.  What does your Critical Supply Chain look like?

Availability and Flexibility Assessment:

Once the Critical Supply Chain is identified, the next step is to assess its availability and flexibility.    The first consideration is to understand which of these components or services are custom made – unique for the company, and which are commodity items.

Custom products normally have longer lead times and are likely to be single sourced.    It is good to have contractual agreements for upside volume in case of spike in demand (as seen by some food manufacturers), and downside flexibility to minimize financial exposure in case of sudden downturn.   Many businesses are shifting from their overseas suppliers, where the lead times including transportation have been more than three months, to regional suppliers with shorter lead times.

Even in commodity products, many companies have no backup suppliers identified.   This crisis has resulted in longer than normal lead times and lack of availability of certain items.  It is important for all the critical commodity items to have alternate suppliers not only identified but validated.  Validation may require small changes internally (machine setting etc.) to accommodate alternate supplier products as well as ensuring that quality is acceptable.

Take stock.  Does your Critical Supply Chain ensure availability and flexibility?

Supplier Risk Assessment:

Periodic reviews of the suppliers delivering critical components is a key aspect of supply chain risk management.    Supplier quality procedures and remediation processes are important to ensure that you get quality products every time.  When exceptions occur, you need to know your suppler can take fast, corrective action.   Supplier risk assessments includes understanding their ability to do rush orders, move production between different facilities, and their potential bottlenecks and remediation plans.    These supplier assessments need not be complex.   Most major suppliers already have these plans in place; you just need to understand and assess them.

Take stock.  Do your suppliers meet your performance needs and risk management criteria?

Cost Assessment:

With supply chain costs making up one of the biggest operating expenses at many companies, clear focus in this area is essential to maintain the competitiveness of your products.    Some commodities and markets fluctuate often – such as freight, paper, and tech products.   Other components and services are more stable but even there, the competitive landscape can shift between the major players.    It is important that companies periodically assess market and supplier costs.   Additionally, companies should evaluate their custom components and services to see if they are providing value – as invariably there are both hard and soft costs of these customizations.

Take stock.  Do you understand where price shocks are most likely to impact your cost structure and what you are doing to mitigate them?

This crisis has shone light on many supply chain shortcomings.   As you move to the recovery phase, these assessments will strengthen your company’s competitive edge.

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Dileep Kulkarni is a former director of supply chain at Intel and currently consults with Expense Reduction Analysts.  If you would like to add some external leadership to improving your supply chain Dileep and his ERA team are here to help you.    He is   committed to making regional middle market companies more competitive.   Please do not hesitate to reach out to Dileep Kulkarni at dkulkarni@expensereduction.com or by phone 503-781-9367.

Navigating the Future

by Teri Danielson

As we enter week 8 of the “stay at home orders” in Oregon, I have been reflecting on what the future might hold for the food industry, and other industries and businesses in our state and country.  After talking to people throughout manufacturing and other industries about how they are managing during this crisis, I am seeing many companies demonstrating exceptional leadership, engagement and focus.

This got me wondering, given the challenges that COVID-19 is presenting, why are some businesses performing so well, what is it businesses are doing well to address the changing environment and how do businesses keep these practices going as we move forward?

What I would like to suggest, based on my observations:  The exceptional performance many companies are exhibiting is an example of how we are more effective when priorities are clear, businesses are focused and aligned around the work that needs to get done and there are minimal distractions.

When the stay at home orders were first issued, most of Northwest Food Solutions current projects were postponed.  And rightfully so.  Our food manufacturing clients were facing loss of their food service and restaurant volume and larger than normal growth of grocery volume, coupled with resource constraints and general difficulties associated with navigating COVID implications to the workforce.  The food industry is considered “critical infrastructure” and companies have been heads down in triage mode.

As the crisis progressed, I started reaching out to clients to find out how it was going.  I also began attending industry meetings and talking to others in the industry trying to see what companies might need and how Northwest Food Solutions could provide support.

One assumption I made was that companies would need help implementing COVID best practices, and we offered this help pro bono to our clients.  But the clients I talked with had already done this relatively quickly and painlessly.  In fact, during these conversations, clients related some great examples of the creative solutions they had come up with to ensure supply of raw materials, to social distance, to split shifts and protect employees, to find PPE, to share resources with other companies, to prioritize manufacture of products that were selling well in grocery and stop manufacturing products that had low volume.  That concept of focus and prioritization struck me again and again as I listened to industry leaders sharing their strategies and the creative workarounds they implemented.

This idea of focus and prioritization is a common theme in the consulting services we provide to companies.  Usually at the start of a project, when a client has brought us in to help solve a specific problem, we often see that people and resources are stretched thin by too many projects and distractions.  Leaders do not always know how to prioritize, so as a result, their teams are doing everything.  No matter what “project” we work on with a team, we always are working with the team to prioritize the project within the larger scope of company work and help teams figure out how to get the project work done effectively.  It is at the core of what we teach, even though it is almost never what we are hired to do.

So, what is different in the COVID world?  Now, we are all being forced to prioritize.  Some things we have seen change:  The ten new product launches planned for this year…not happening.  The twenty-five low volume skus that consume 70% of the teams resources to produce…shelved.  Sales travel to customers…it’s temporarily not happening or happening via Zoom.  Vendor and auditor visits…they have been reduced or eliminated.  In the COVID world, companies are aligned around a few common goals and those goals are clear to everyone.  1) Protect the workforce and 2) meet the increased demand of the most needed product.  So simple and so clear.

This idea of focusing on the few important things as a more productive approach is backed up by science.  There are a multitude of papers that have been published on the how multi-tasking or working on too many things at once destroys capacity and creativity.  According to Teresa Amabile, who wrote the Harvard Business Review paper “Creativity Under the Gun”, “It’s not so much the deadline that’s the problem; it’s the distractions that rob people of the time to make that creative breakthrough.”

Without all the distractions, companies can focus on work that adds the most value to the customer and develop creative ways to manage through the unique challenges they are facing.  Companies are effectively moving mountains to keep their product in stock and their workforce safe.

To be fair, not every company is doing this successfully, but I am heartened to see so many food and beverage manufacturers performing admirably in this crisis using their own resources.  We are going to return to a new normal soon, and it is likely that the way we do business will also be altered as the country opens back up.

Looking to the future, the rules have changed, and things are going to be different for all of us going forward.  With that in mind, I would love to see companies commit time to sit down with their teams, recognize what has been accomplished, how it was achieved, and take a hard look at how narrowing focus and prioritizing has impacted the company operations.  What are the learnings from this crisis that can be implemented into regular operations?   Reflecting on the accomplishments, what made them possible and charting a new path with resulting actions will help all of us in the food and beverage industry continue to navigate and prosper as we move forward.

And of course, Northwest Food Solutions would love to help with this work.  We are in this together and committed to continuing to support the organizational health of the food and beverage industry in the Northwest.  Please don’t hesitate to reach out to us with feedback and questions.

Northwest Food Solutions is an Earth Day Oregon Business Partner!

by Teri Danielson

Northwest Food Solutions is proud to be an Earth Day Oregon Business Partner.  Earth Day Oregon is a statewide campaign to AMPLIFY the impact of Earth Day, by directing donations to the nonprofit organization’s in our community that work to create a more sustainable world.  Northwest Food Solutions recognizes the good work that ECOTRUST – THE REDD does in Oregon and has made a donation to this nonprofit in honor of Earth Day.

Please visit Ecotrust’s website for The Redd to learn more about the important work they do.  Learn more about the Earth Day Oregon campaign, and check out some Earth Day volunteer activities on their website:  www.earthdayor.org

 

Keeping Your Workplace Safe

By Teri Danielson

Right now, your employees and customers’ safety is top priority for your food or farm business.  Two stories in the news over the past week have brought home the importance of developing and implementing COVID-19 practices in the food industry workplace:

1)  Oregon OSHA received over a year’s worth of workplace complaints in the past month as a result of the pandemic.
2) Several large meat packing plants in the U.S. have closed their doors as they have become hot spots for the COVID-19 virus with large numbers of employees testing positive.

With the Food Industry being considered critical infrastructure in the country, most food manufacturing facilities have remained open to ensure the nations food supply chain can meet the demand.  The FDA and CDC have both stated that there is no evidence that the virus can be transmitted via food due to the nature of the virus itself.  The risk at this time, is to our food industry workers and their health and safety.

To protect employees and ensure a stable food supply chain, it is critical that food manufacturing companies take time to assess their COVID-19 practices including:

  • Developing a written COVID-19 best practices document
  • Training and implementing best practices in the workplace
  • Checking that the best practices are effective
  • Engaging the workforce in improving those practices

Adapting new practices into your workplace to prevent the spread of COVID-19 is a challenge.  Northwest Food Solutions has posted resources for food companies looking for help and ideas in implementing best practices.  If you have resources or ideas for best practices, please share them with us via email at info@nwfoodsolutions.com.  We will share these in our next newsletter.

Thank you to all the food industry and other critical infrastructure workers who are continuing to do the heavy lifting to keep our nation functioning. Stay safe!

Need Support to Keep Your Supply Chain Moving? We Can Help.

By Cheryl Collins

One thing is certain right now:  we are all experiencing some sort of disruption, and with disruption comes problems.  If you’re like most people right now, you are facing new and unprecedented challenges, and we’re here to help.

Problem solving is the core of our business; it’s what we do.  We have decades of experience working with clients helping them understand root causes of business challenges as well as helping them discover innovative solutions.  A problem solving mentality is needed now more than ever because “business as usual” no longer applies.  It’s time to challenge the status quo and implement solutions that will help with your business continuity.

Here are some examples of questions we’ve received that we can help with remotely:

  • I need help thinking through a reasonable leadership response in this escalating situation. Can we talk this through?
  • My team are scared. How should I lead through this situation?
  • I’m afraid about client continuity and cash flow. What can I do?
  • What do I do if someone my team gets sick?
  • We aren’t set up to work remotely.  What do I need to do to make this happen as efficiently as possible?
  • A lot of people are calling in sick and I’m struggling to meet demand, what options are available to me?
  • I’m trying to implement social distancing in the workplace but can’t figure it out, can you help?
  • My grocery business has tripled.  What can I do to keep up with demand?

We’ve compiled a list of resources for your reference  (here) and are updating that as we find more information.

In an effort to better meet your needs, we’ve also added a remote support service offering on our web page (here).

If you have a problem, please don’t hesitate to reach out.  We’re here to help!

Cheryl, Teri and Amy

Is Your Brand Built on a Strong Foundation?

By Amy Yukas
December 16, 2019

A brand, by simple definition, is a product manufactured by a particular company under a particular name.  As business and consumerism has evolved, so has this meaning.  A brand encompasses much more than just a product.  And yes, of course, it is the qualities, benefits and attributes of the product but ultimately it is the consumer perception that is the brand’s value or equity.

The consumer expectations of a brand are developed through all interactions and communication touch-points the brand has with the consumer.  This includes packaging (all packaging not necessarily just the primary packaging), website or retailer websites, sales materials, signage, social posts/responses, partnerships, advertising and if you own your own retail store – the consumer retail experience. These are all opportunities to talk to and with your consumers and to build long lasting, trusting relationships.

If you are just starting out or are thinking about a brand refresh, here are some key elements to think about when building a foundation for the brand:

  1. What does the brand stand for?  What does it believe in?  How is it different?
  2. What is attitude that comes out in written communication – copy and responses?  Is it humble?  Confident?  Humorous? Straight-forward? Smart? Witty? Reliable? Trusted?
  3. Visual Identity. What is the overall visual communication – logo, color palette, font(s), other visual assets that can be used, packaging, web design, photography? Is it sophisticated?  Approachable?  Whimsical? Clinical? Fun?
  4. Who are you trying to engage with?  Who is your target?  Millennials?  Gen X?  Gen Y?  Female?  Male? Interests? Values? Geography?
  5. What do you want to say to the consumer?  What is important for consumers to know?  What will resonate with consumers/customers?  Focus on 2-3, tops.

Building a successful brand means delivering on the brand/product promise and creating a strong emotional connection to the consumer. The result is consumer trust and loyalty.

As an example, look at Volvo – this iconic brand stands for safety, sustainability and luxury.  How do I know that?  It is clearly communicated in everything – from the website to social posts to the information I receive as a Volvo owner via email and snail mail.  It is visually appealing and high end.  They are always reminding me of how safe their cars are and how they continue to innovate on my behalf.  I am a believer and a loyal customer.  I have owned Volvo’s for the last 15 years.  And because I trust Volvo, not only do I drive one, last year, we bought one for my daughter.

With over +25 years of experience building brands – like Hidden Valley Ranch, Tazo Tea Company, Starbucks Coffee Company and Pacific Foods – I have learned the most important elements to building brands are consistency and simplicity.  Building a brand is not rocket science, but it does take a discipline, focus and patience.  The consumer loyalty that results from strong brands is built over time and is a powerful marketing tool.

Please let us know if you need any help with developing your brand foundation. We’d be happy to chat with you and your team.

Amy helps small to mid-sized companies with marketing plans, brand management and new product development processes through NW Food Solutions.  Previously she has lead brand and marketing teams at Smith Tea Maker, House Spirits Distillery, Pacific Foods, The Body Shop, Tazo Tea Company and Starbucks Coffee Company. 

You Don’t Have a Culture Problem

By Cheryl Collins
October 29, 2019

Organizational culture is still the hot topic.  As a culture nerd I love that we’re all talking about it.  But the mainstream understanding of culture hasn’t quite caught up with what it actually is.

The problem with thinking of culture as the cause of a company problem is that it perpetuates the misuse of the word “culture”, and interestingly enough, it doesn’t make much sense.

Most people have accepted that culture is, “the way we do things around here.” This is a nice, simple, easy way to think of culture.  But, it’s not quite accurate.  Culture is much more complex than a simple statement.  Culture is a broad, deep, ever-shifting system that is ultimately driven by our underlying assumptions (emphasis on underlying).

Edgar Schein, long time organizational culture guru, offers this definition, “Organizational culture is a pattern of shared basic assumptions learned by a group as it solved problems of external adaptation and internal integration, which has worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.”  There are entire books dedicated to explaining what all of this means, but to make it more understandable here is a shortened version of the same definition:  Culture is a product of joint learning

Think about how that’s different from “the way we do things around here” definition.  “Product of joint learning” implies culture is the result, product, or output of something.  The way we do things around here implies culture is the cause of something.  Culture, by definition, cannot be the root cause of a problem.  Culture cannot be weak or strong, good or bad, it just is.  Your culture exists, it’s constantly shifting, and it’s completely the result of how your teams have learned to solve problems, both big and small.

You might be thinking, if culture is the product of joint learning, then could we just change how we learn to change the culture?  The short answer is yes.   But it’s another example of simple not necessarily meaning easy.  Why?  Because it involves change.  As a species, we humans aren’t wired to embrace change under most circumstances, but that’s a blog post for another day.

For now, just focus on re-framing your understanding of culture.  Remember:  Product of joint learning.  Product of joint learning.  Product of joint learning.  Product of joint learning.  Product of joint learning.  Product of joint learning.

Science suggests repetition helps us learn.

We’d love to hear what you think of this definition.  Does it align with how you think of culture?  How does this definition encourage you to think about culture?

Cheryl helps companies of all sizes with organizational, strategy and leadership development.  Her passion for transforming organization culture and psychological safety comes out of her experiences working with people and teams as the CEO of Ninkasi Brewing Company, as well as her roles at Oregon Community Credit Union and Teach for America.

Mock Recalls – Testing the Front End

It’s your worst nightmare as a food producer – you get the call, whether it be from a consumer or a regulatory agency, and find out your company is in a situation where products need to be recalled.  Are you prepared?  How do you know?  What can you do to ensure you are ready should an event arise that requires you to recall.

First, don’t panic.  Preparation for a recall requires focus on four main areas:

  1. Assessment
  2. Team Preparation
  3. Traceability
  4. Communication

We are going to focus on the first area – assessment.

Assessment

This is an area companies sometimes forget to consider when creating a recall plan or running a mock recall.  The assessment area includes the initial notification that triggers the recall team to get together, data gathering and the decision whether or not to recall.  Questions to ask to help prepare include:

  • What are the ways we might learn about a recall?  Do we have processes in place to ensure that information gets to the right people?
  • Have we trained our employees how to respond and gather information from customers and others when a food safety situation is reported?
  • Do we have a simple way to objectively look at the data and information to decide if we are in a recall situation?

So what should your company have in place to address these questions?  A good starting place is to create a customer complaint record or log that walks through the common questions that should be asked when a customer calls in with a comment or complaint.  You may want to create a similar record for notifications that come from other sources, too, like regulatory agencies, suppliers or a media notification.

Once you have created the record or log, sit down with the employees in your company who typically handle customer calls and walk through some examples of how to gather information using the log, and when to escalate a complaint to the next level.   Having a process in place to quickly identify if a complaint requires further action, and knowing what information to gather from the customer will save time in the event of an actual recall, and help your team make a better decision.

Finally, using an evaluation template to lay out all the information you have gathered is a great way to help the recall team decide whether or not a recall is warranted.  A good evaluation template lays out the information in a way that makes the decision apparent.  We use a form with our clients, that includes sections to identify the category of issue, the type of hazard and the severity and likelihood of the hazard.

When we run mock recalls with our clients, we like to start with a mock customer complaint.  That way, the team handling consumer calls gets practice as well as the recall team.  And the assessment portion of the recall plan gets a good workout, too.  Next time you run your regular scheduled mock recall, try testing your notification and assessment processes, and see what you find.

If you would like to get a copy of our recall assessment form, drop us a note here.

How is your preparation for FSMA going?

How is your preparation for FSMA going?

FSMA as a topic is making its way to almost every client discussion we have these days. Everyone is at a different point with preparation and the same is true for us. Teri has begun her 9 week training on Preventative Controls through Washington State University Extension and I will take a 3 day intensive course through Northwest Food Processors Association in June.

So what is FSMA? FSMA is the Food Safety and Modernization Act which was signed into law in 2011 and the regulation compliance requirements begin this year, 2016, in September. It intends to be the next step towards prevention within our federal food safety regulation. The goals of FSMA are to focus efforts on prevention of problems and implementing food safety controls throughout the supply chain.

Several people have done a great job summarizing the regulations, compliance timelines, and topics. Rather than attempt collating all of the details of the regulations, we’ve gathered together a few websites we found helpful when researching and monitoring FSMA. Below are our collection of helpful links:

Techhelp.org is a good resource for up to date information and they offer a series of different trainings on the FSMA by some of the most experienced and knowledgeable food safety experts on the west coast. If you weren’t aware, the FDA will require completion of specialized training for processors of human food and animal feed/pet food. Their next 3 day Preventative Control Qualified Individuals course begins May 23. http://www.techhelp.org/food-safety-modernization-act-information-training-compliance/

 

WattAgNet.com gives a clear, concise overview on the regulation and timing. The table below is handy summary of compliance dates from the article.

 

Achart

Follow this link for the full article at WattAgNet.com.

http://www.wattagnet.com/articles/24693-fsma-preventive-control-rules-outline-final-requirements

 

FDA.gov is the complete source for complete rulings and history of the regulations. The frequently asked questions section is helpful and you can see past webinars.

http://www.fda.gov/Food/GuidanceRegulation/FSMA/default.htm

 

SQFI.com has some interesting information. For those of you using SQF standards, here’s a matrix comparing SQF and FSMA from the SQFI website.

SQF Level 2        FDA Preventive Control Food Safety Plan (FSMA) FDA GMPs (117 subpart B)
Overarching policy statement Yes No No
Written Plan Yes Yes No
Experienced individual in charge Yes Yes No
Trained Staff Yes Yes* Yes
Prerequisite Programs Yes No Yes
Raw material/ incoming   product safety assurance Yes No No
Supplier Verification Yes Yes, in specific cases** No
Allergen Management Yes Yes Yes
Validation of Controls Yes Yes No
Finished product testing No Yes, in specific cases** No
Sanitation Control Yes Yes Yes
Environmental monitoring Yes Yes, in specific cases** No
Corrective Actions Yes Yes No
Traceability Yes No[1] No
Recall Yes Yes No
Records Retention Yes Yes No
Food Defense Yes No2 No
Internal Audit Yes No3 No

 

For more information on SQF or FSMA, check out their “Are you FSMA ready?” page on their website: http://www.sqfi.com/suppliers/fsma-resource-page/

 

If you find other sites to be helpful, please let us know. We are eager to see how the regulation roles out onto shop floors; we expect lots of learnings on all sides.

The Science of Motivation

Motivation – it’s something we all struggle at some level.  Whether it is our own motivation, or we are trying to incentivize others to perform, it can be difficult to figure out how to get excited and create movement in the direction we are trying to go.  Our tool box consists of a carrot and a stick, and we either alternate between them or as more enlightened members of the 21st century, we lean towards the carrot.  Watch this Ted talk with Dan Pink, to get a different take on motivation and how thinking differently about what gets us moving as people can create some astounding results.  What if people are not motivated by the extrinsic, but by the intrinsic?  What if we are driven by an urge to direct our own lives, the desire to get better at something that matters and the yearning to work in the service of something larger than ourselves?  If this were true, how would you motivate yourself and the people who work for you?