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Approved Supplier Management

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Training participants will gain a basic understanding of Approved Supplier Management and its applications within food safety and quality systems. Basic knowledge competency will be verified through successful completion of the accompanying Approved Supplier Management assessment activity. Basic skill competency can be verified through the Approved Supplier Management competency checklist available as a resource for this training activity.

Key Definitions For Approved Supplier Management
- Approved Service Provider: Service Providers are generally classed as businesses that supply a “service” into a food business.
- Approved Supplier: Suppliers are generally classed as businesses that supply a “physical” element into a food business.
 
Approved Supplier Management Development
When considering the development, documentation and implementation of Approved Supplier Management within food safety and quality management systems, the following information should be considered to ensure effective outcomes:
 
About Approved Supplier Management
Approved supplier management programs are implemented to ensure a food business has control of materials and services supplied. An effectively implemented approved supplier management program provides confidence that the supplied materials or services will not negatively impact upon the safety or quality of finished products.
 
In a modern age where information is readily available, bad news travels at speed. Customers of food businesses play a leading role in ensuring the raw materials or services used to manufacture their products meet certain expectations. Ethical Sourcing Standards often play a large role in the continued use of food businesses as elements of the established food supply chains.
 
About Ethical Sourcing Standards
Ethical Sourcing Standards are applied across international food industries to ensure sourcing is facilitated in a responsible manner, to ensure suppliers continually improve their social and environmental practices and shield retailer and brand confidence.
 
Ethical Sourcing Standards is a general expectation of consumers who, over time, have become increasingly aware of purchasing goods and services that have been sourced in a manner that does not include exploitation of humans, wildlife or the environment, or in a manner that does not represent a danger to the health or safety or humans, wildlife or the environment.
 
In an effort to provide food items and general merchandise at competitive prices, retailers are continually forced to source items from a variety of international locations, including from developing countries. Instances of exposed poor working conditions and environmental degradation within developing countries over time have seen retail businesses develop and implement targeted social responsibility requirements for their suppliers.
 
Common elements of Ethical Sourcing Standards policies implemented by progressive retail businesses include:
- Using suppliers that source, manufacture and package their products in a responsible manner;
- Working with suppliers to improve their social and environmental practices.
 
The basis of Ethical Sourcing Standards is commonly linked to recognised Ethical Trading and Labour Initiatives. These are often used to define the guidelines for the Ethical Sourcing Standards mandated by retail companies.
 
Suppliers or Service Providers
Within modern food businesses, there is generally a clear distinction between suppliers of raw materials and service providers.
 
Suppliers are generally classed as businesses that supply a “physical” element into a food business, including but not limited to:
- Ingredients;
- Finished products;
- Packaging;
- Chemicals;
- Onsite testing equipment;
- Onsite analytical testing supplies;
- Equipment and utensils;
- Premises construction.
 
Service Providers are generally classed as businesses that supply a “service” into a food business, including but not limited to:
- Analytical testing;
- Calibration or measuring and testing equipment;
- Consulting;
- Pest control;
- Cleaning and sanitation;
- Maintenance and repairs;
- Sub-contract manufacturers;
- Sub-contract processors;
- Sub-contract packers;
- Transport providers;
- Logistics and storage providers.
 
Within the following content, we will use the term “suppliers”, for which the requirements should be considered equally for both product suppliers and service providers.
 
Procurement Protocols
Before purchasing agreements are initiated with specified suppliers, it is important to obtain as much information as possible about the products and raw materials to be supplied. Product information from the pending or existing supplier will outline details regarding basic product specifications. It is important here to consider any additional details that may impact upon the potentially of the product to become unsafe for use within your business.
 
The following factors may be considered:
- The shelf life of the product – Will the product be used before organoleptic, chemical and microbiological changes render the item unsafe for consumption?
- The product availability – Will the product be available for the duration for which it is required by your business?
- The product specifications – Are your specifications for the product maintainable? Is there a record of specifications kept within your business for the items supplied?
 
 Procurement Process Considerations Logical Sequence
- Supplier Invitation – Provide potential supplier with a questionnaire regarding their products and services;
- Supplier Input – Potential supplier provides samples and information for assessment. Samples, information and supplier quality details are reviewed;
- Supplier Technical Review – Purchasing team members reviews all materials submitted by the potential supplier and indicates conditions of supply including audit schedules and hazard rating. It is important at this step to ensure that the proposed products or services are suitable for their intended cope and purpose of use for foodstuffs;
- Supplier Price review – Potential supplier’s products and services are compared to those of current or other potential suppliers regarding quality and price;
- Supplier Acceptance – Supplier is accepted and added to the nominated supplier listing. A file should be created for the supplier if one doesn’t exist;
- Use of Supplier – Procurement process is complete. Continue use of approved suppliers and initiate reviews and auditing as scheduled.
 
The Approved Supplier Management and Procurement Processes are commonly managed on an ongoing basis with scheduled verification activities and reviews to ensure the effectiveness and currency of the established systems.
 
Approved Supplier Program
The suppliers that you choose to use for your business should:
- Demonstrate as a minimum, a proactive commitment to currently recognised good manufacturing practices;
- Meet all relevant certification criteria as suppliers for their nominated range of products; and
- Have made a commitment to a minimum of HACCP based food safety within the entirety of their business operations.
 
Confirming Supplier Suitability
The following methods may be considered when assessing a prospective or existing supplier for approval:
- A desk audit of the suppliers’ Quality and Food Safety Programs regarding propriety and suitability. The aim of this will be to locate essential components of recognised GMP and HACCP based food safety, and the associated identification and control of significant food safety hazards;
- The risk category of the goods being supplied and the suppliers reputation for quality service;
- Reports of microbiological analysis of the suppliers’ potentially hazardous products from accredited sources that show adherence to legislative and/or internationally recognised microbiological guidelines;
- Ongoing random testing of delivered items by appropriate methods to confirm the microbiological safety and suitability;
- Confirmation that all relevant staff have undergone appropriate personal and food hygiene training equal to their vocational activities;
- Auditing of the supplier (including the gathering of objective evidence by a suitable person from your business or a reputable third party) as to the ability of the suppliers’ operations to identify and control significant food safety hazards. The outcomes of such auditing should result in a closeout of any non-conformances higher than minor in rating before proceeding with supplier approval;
- The official, current and relevant certification of a supplier by a reputable certification body.
 
Should an approved supplier fail to:
- Adhere to the seven HACCP principles as nominated in the Codex HACCP guidelines;
- Maintain Internationally accepted food industry GMP practices;
- Continually maintain sufficient control over monitoring and corrective actions at any CCP within their food safety program.

There may be sufficient grounds to remove such a supplier from the approved supplier program regarding the objective evidence in terms of the above mentioned non-conformances.

Commodity Based Supplier Risk Assessment Criteria
It is important to consider the varieties of foods being supplied regarding their potentiality to contain or cause food safety hazards. The acceptance of suppliers should be approached accordingly, initiating differing approval criteria for varying levels of food item risk.
 
Suppliers with products that contain:
- Food of animal origin including red meat, poultry, fish, shellfish, crustaceans, eggs, milk and dairy products;
Any food of plant origin that has been heat-treated and has a history of foodborne disease including potatoes, squash, pumpkin, rice, processed beans, mushrooms, onions, tofu;
- Any untreated food of plant origin with a history of foodborne disease including seed sprouts, cut fruits or vegetables, tightly wrapped produce such as mushrooms and coleslaw;
- Processed fruits or vegetables including variances of marination, drying or cooking;
- Synthetic foods including artificial creams or fillings;
- Foods that are potentially hazardous and not generally subjected to further cooking may require more scrutiny for approval than those who supply foods that have a lower risk of contamination.
 
Foods of lower risk include those that do not have a history of contamination or the normal ability to support the growth of microbiological pathogens. They include grains, nuts, confectionery, carbonated and alcoholic beverages, jams and preserves, commercially canned and bottled products.
 
Whilst traditionally “High Risk” foods are or major concern within Approved Supplier Management systems, it is of utmost importance that the suppliers of all raw materials and services are assessed for risk and treated accordingly.
 
Packaging variants should also be considered within risk based assessments of suppliers. The origin and “food grade status” confirmations for packaging should be defining factors within any risk assessment process. It is important to confirm that packaging will conform to the legal requirements of the country in which the packaged products will be sold.
 
Geography or Status Based Supplier Risk Assessment Criteria
Within modern food industries, it is important to consider that the capability for rapid transfer of information provides substantial opportunities to manage approved supplier systems while considering issues which arise within similar products or food industry sectors in other parts of the globe.
 
It has fast become best practice to use the awareness of food-borne illness or contamination within other countries or continents to apply requirements or sanctions on existing suppliers of materials or services. The following example shows a logical sequence for consideration of geographical based supplier assessment criteria:
- You review an email news report stating that a contaminant is identified within a vegetable product manufactured and packaged within country “X”;
- You receive a similar vegetable product from an approved supplier, and though it is not the same brand as the contaminated vegetable product, you review your product specifications to confirm the country of origin;
- You see that the country of origin for your supplied vegetable product is country “X”, the same as the contaminated vegetable product;
- You immediately discuss this detail with the relevant persons within your food business;
- Upon deciding that you are not totally confident that the vegetable product you are receiving is not also contaminated, you contact the supplier or manufacturer of this vegetable product and request some testing results to confirm that their product is not contaminated;
- You receive and review the testing results and make a decision to continue use based on the outcomes.
 
This scenario highlights the importance of “real time” interactions within your Approved Supplier Management systems to ensure outcomes are maintained at their highest levels.
 
Supplier Assessment Considerations
As part of a supplier assessment, it is necessary to address all information appropriate and relevant to the capability of the supplier to constantly supply products to the required standards.
 
Information that may substantiate the supplier’s claims include:
A Certified Food Safety and Quality Management System, which may include:
- Certification registration number;
- Certification standard;
- Agreement to grant access to quality records at any time for inspection and verification of the suppliers quality system;
- Substantiation by a Certification Certificate and Capability Statement from a Government Authority or third party;
- A letter of Substantial Implementation from an appropriate Government Authority or third party – Relevant details may be substantiated by a copy of the letter of Substantial Implementation.
 
Details of a documented and operational quality system that may gain a letter of Substantial Implementation after auditing, which may include:
- Details of quality system elements that are currently documented and operational;
- Details of target dates for the certification of each of the above nominated elements;
- Details of the quality standard on which the elements are based;
- Details of the suppliers’ suppliers – Suppliers of input materials into processing and production of items to be supplied to your business. Do they have documented and operational quality systems in place?
 
Copies of the suppliers’ Quality System documents, which may include:
- Quality Manual;
- Quality System Procedures;
- Internal and External Quality Audit Schedule;
- Contact details for the quality system contact;
- Details of external consultants if applicable;
- Documented specifications including all critical product formulation, organoleptic and physical parameters.
 
Supplier Packaging and Labelling Requirements, which may include:
- Packaging and labelling of goods to appropriate legislative standards and/or to specifications of the buyer;
- Delivery of goods in appropriate condition, free from damage and easily able to be sufficiently inspected upon receipt;
- Sufficient labelling and invoice details to include batch/lot number, use-by/best before date, purchase order number and other relevant information;
- Substantiated ability to comply with all appropriate legislation and guidelines as a carrier of food items;
- Appropriate identification of allergenic ingredients and identified allergen cross contacts.
 
Risk and Property, which may include:
- Title of goods passing to your business only upon acceptance at point of delivery
- Insurance of the goods and delivery capabilities (physical) with a reputable insurer to the full value of the concerned goods and of any damage or injuries sustained to the staff or property of your business during delivery.
 
Supplier Guarantee, which may include:
- That all goods supplied will be new upon delivery;
- That all goods supplied will be of agreed and acceptable quality;
- That all goods supplied will be fit for their intended use;
- That all goods supplied will conform to any given specifications or sample provided by the supplier;
- That all goods supplied will be free from defects in materials and workmanship;
- That all goods supplied will conform to applicable product standards.
 
Mutually Beneficial Supplier Relationships
Businesses rely on their suppliers to provide the products and services required to produce outputs. In conjunction with other inputs, this provides the business with the ability to produce income, which is the primary objective of commerce based businesses.
 
The benefits of mutually beneficial supplier relationships include:
- Increased and maintained market share through strategic and beneficial supplier relationships.
- The ability to optimize the use of budget and resources to create "added value" for both the food business and its suppliers.
- Capabilities in balancing short-term gains with long-term opportunities.
- Opportunities to share resources, technical expertise and beneficial partnerships with suppliers through structured interactions.
 
Approved Supplier and Commodity List
A document containing all approved supplier details and the goods that they supply should be readily accessible. Hazard ratings, such as high, medium or low for each commodity and audit or approved supplier review dates should also be noted.
 
Additional Relevant Information
The following information is provided from other foodindustrycompliance.com Training Activities as the content is relevant to Approved Supplier Management:

Sub-contract Packaging and Labelling
In instances where sub-contracted packaging or labelling activities are conducted, it is of utmost importance that the scope and purpose of interactions of such sub-contractors are documented, and agreed upon, both internally and by relevant customers.
 
It is generally not considered appropriate for food businesses to procure the services of a sub-contracted packaging or labelling supplier without the prior consent of the customer for whom they manufacture foodstuffs. Such customer approvals often include verification of satisfactory standards, including the confirmation of food grade packaging status.
 
In instances where Identity Preserved products are handled by sub-contracted packaging or labelling suppliers, it is important to ensure that the integrity and “genuine” status of such foods are maintained. This is often facilitated through the establishment of assessment and testing routines between food businesses that may enter into sub-contracted packaging or labelling arrangements to ensure the status of Identity Preserved products is not compromised.

Contract Review Development
When considering the development, documentation and implementation of Contract Review within food safety and quality management systems, the following information should be considered to ensure effective outcomes:
 
Contract review is a systemic requirement which promotes and nurtures supplier and customer relationships. For legal reasons, and for the transparency of customer expectations, contracts should be developed, documented, implemented and reviewed on an ongoing basis between suppliers and customers. Contract review processes are often closely linked to customer focus related systemic elements.
 
It is also important to consider that Contract Review requirements may not just be applicable to customers; they can be reversed and applied with similar methods for suppliers of materials or services.
 
Product Description – HACCP Step 2
The second step in HACCP implementation involves assessment of the food products that are being produced or handled by the food business. Where a service is being provided rather than a product, a similar method can be applied. The information gathered will assist in the identification of hazards that may be present in either ingredients or materials used in the processing of food. The use of comprehensive standard recipe forms can simplify this task, allowing all input materials and ingredients, as well as processing, storage and treatment methods to be plainly viewed. This step should also include references to appropriate legislative and industry guidelines, or scientific validations regarding the documented Product Description and Intended Use. Generic Product Descriptions may be developed for product groups rather than each individual line where applicable.
 
When compiling a Product Description, the following should be addressed as a minimum:
- Product name – Including its menu name or other names that are used to describe it within the workplace or by consumers;
- Product composition – A comprehensive listing of all ingredients and materials for the product including ingredient specification, packaging, supplier listings and relevant ingredient substitutes;
- Compositional information – It is quite often helpful to include compositional information such as physical or chemical structure, as well as treatments undertaken during processing. May include preservation methods;
- Packaging type – The variety of packaging that is used to contain the product, including both primary and secondary packaging;
- Storage and Handling conditions – The conditions under which the product is stored and handled, which may include several process steps;
- Distribution method – Distribution procedures and documentation;
- Anticipated shelf life – The maximum shelf life under optimum storage conditions;
- Labelling requirements – Includes relevant and required information for consumers required by legislation and industry guidelines. This must include information for at risk consumers;
- Specific requirements - Any extra information that may affect the safety of the product;
- Intended consumers - A nominated scope of consumers for which the product is intended for, or not intended for. Allergens or targeted suitability should be included as specific nominations.
 
About Product Identification and Traceability
When considering the development, documentation and implementation of Product Identification and Traceability within food safety and quality management systems, the following information should be considered to ensure effective outcomes:
 
The primary reason for having a functional traceability system in place is to ensure safe food and to aid in the removal of unsafe food from the market place. A logical and systematic form of product identification is integral in such a system. Such a program must allow tracing back and forward of all finished products, ingredients and other raw materials. This system must be validated, and verified, to ensure it is effective.
 
All raw materials and finished products must be identifiable and traceable at all stages of the process from receipt to finished products, including process steps where process deviations such as work in progress and re-working occur.
 
A food business should have documented policies and procedures that details how products are identified at all stages of the process including the following aspects:
- All foods and ingredients should be labelled at the end of production and prior to storage. Items must also be re-labelled where they have been removed from their previous container. As a minimum, the product label should include the product name and a best before or use by date;
- All foods should be covered before labelling, and must not be compromised by the action of covering or labelling;
- A physical description of how waste, rework, raw materials, work in progress and, where applicable, allergenic materials should be defined;
- A first in first out policy should be applied to all products in storage;
- Raw ingredients are to be stored in original packaging or in sealed containers to prevent the risk of allergen cross contact or foreign body cross-contamination;
- Pre-existing labels should be removed to reduce confusion and to allow sufficient cleaning and sanitising of the container they were adhered to;
- If day type labels of differing colours are used, dates and descriptions should also be used to provide sufficient information about the item;
- If an item is to be frozen, it should contain sufficient details including the date of freezing and any special instructions;
- If coloured utensils, containers, cleaning equipment or chopping boards are used for specific product types or tasks, this should also be outlined in the policy;
- A description of how raw materials and finished products are batch and date coded;
- Frozen items should also be dated when they are removed from frozen storage for defrost;
- The shelf life of perishable products invariably alters from the manufacturers original Use By or Best Before date once the original container or pack has been opened. Appropriate labelling will be used to indicate the new Use By or Best Before date.
 
If your food business supplies foodstuffs manufactured to a customer’s specifications, it is important to consider any specific Approved Supplier Management Development requirements in relation to their items.


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