FSMA Compliance - Intelligent Supply Chain Platform - Blog

The US Food and Drug Administration (FDA) changes to its Food Safety Modernization Act (FSMA), otherwise known as Section 204 of the FSMA are slated to come into effect by November 2022.

This critical food traceability rule is being promised as an effective foundation to mitigate and prevent foodborne illness outbreaks from high-risk foods on the FDA’s Food Traceability List (FTL), which encompasses many fresh foods commonly bought by consumers and served at restaurants, including leafy greens, eggs and cheeses.

The FSMA’s Section 204 requires that stakeholders throughout the food supply chain beef up their traceability recordkeeping capacities as well as revamp the technologies, workflows and procedures for FSMA compliance. The ultimate goal is to leverage harmonized and standardized data sharing for complete supply chain visibility.

The FDA’s endorsement of technology-enabled traceability of food products—instead of manual and paper-based methods used in the past—underscores the pressing need for the food supply chain to adapt to modern times. With foodborne illnesses still affecting millions of Americans each year, the federal agency’s New Era of Smarter Food Safety Blueprint has become the foundation for encouraging supply chain stakeholders to adopt digital solutions for both FSMA – Section 204 compliance and to better safeguard the country’s food supply.

THE BUSINESS BENEFITS OF FSMA – SECTION 204 COMPLIANCE

The number-one objective of the FDA and FSMA compliance is understandably better protection of public health and strengthening the food safety system. Prevention of food safety issues—rather than only reacting to them—can drastically reduce cases each year.

However, there are also added business benefits to the FSMA rules for supply chain visibility that should not be ignored when choosing a digital traceability solution to ensure compliance readiness. Let’s take a look at these benefits in more detail:

FAST RESPONSE TIMES AND AUDITING

With the FDA’s FSMA – Section 204 requiring response times of one day if ever a foodborne outbreak or contamination does occur, stakeholders in the supply chain can react quickly with the most up-to-date data on hand. Furthermore, audits by third-party regulators can be simplified as digital information on specific food products and processes are readily available thanks to a single source of truth.

REDUCED COSTS

According to the United States Department of Agriculture (USDA), foodborne illnesses cost the US economy between $10 and 83 billion USD per year. Depending on where a business resides in the global supply chain for a particular product, costs can skyrocket when managing alerting authorities, withdrawing and recalling products, fines (just ask Chipolte who had to shell out $25 million due to foodborne illness outbreaks in 2020), lost products, restocking fees, lawsuits, diminished sales, insurance costs, etc. With digital traceability and prevention, these costs can be reduced substantially.

BRAND PROTECTION

A Harris Poll found one in six Americans will switch to a different brand and never purchase a recalled brand ever again. Food recalls can definitely affect a brand’s reputation, customer loyalty and even shareholder confidence. Repairing a brand after withdrawing food products from the shelves or partners due to consumer illness can cause a business’ costs to skyrocket. Think crisis management, media and public relations, new communication and advertizing strategies, and more. Supply chain traceability therefore not only enables FSMA compliance—but also ensures that an ounce prevention that is worth a pound of cure.

IMPROVED INVENTORY MANAGEMENT

Analytics on product food tracing gives companies invaluable analytics to pinpoint failures in their inventory management processes as well as lessen food shrinkage, spoilage and waste. Increased inventory accuracy also helps food businesses more efficiently meet ebbs and flows in consumer demand.

BETTER DECISION-MAKING

Traceability technologies allow all companies throughout the food value chain to capture data that otherwise may not be accessible or even exist at all. Imagine being able to tap into a wealth of information and dashboards that show the entire supply chain picture. Making data-driven decisions in a very agile and systematic way is now achievable.

As William Fisher wrote in an article in Food and Safety Magazine, traceability is “much more than recalls and animal health: It lowers costs, improves value chain efficiencies and strengthens brand equity. It has more to do with business processes than gathering data and storing it.” Digital traceability of food products as well as legislation like the FSMA – Section 204 are critical components to greater supply chain success. Section 204 of the FSMA are slated to come into effect by November 2022.

Top Benefits of Using an Intelligent Supply Chain Platform for FSMA Compliance