Supplier Monitoring Programs, Vol.1

Volume 1:  What are supplier monitoring programs?  Why do I need one and how do I start?

What are supplier monitoring programs?

Supplier monitoring programs are used by retailers and food service chains to identify quality deficits in their supply chains.  Discovering quality issues early in their supply chains allows retailers and chains to divert low quality product before it reaches customers or results in losses for operators.  Best practices in supplier monitoring programs result in programs that prioritize high brand impact and/or high cost items and provide quick feedback on product quality at a reasonable fee.  Supplier monitoring programs should be created for each unique product class and there should be clear, defined action plans for out of specification items. 

Why do I need a supplier monitoring program?

Supply chains are more complex than ever.  Most operations source food products from a variety of countries, have multiple suppliers for each product, and may have regional differences in their distribution centers.  On the restaurant side, customer demand for new and different products challenges chains to keep up.  For private label, we see similar challenges.  According to Forbes, currently 87% of consumers are seeking private label products and the National Association of Convenience Stores cited a 17.8% year over year increase in private label sales compared to only a 4% year over year increase for national brands.  To keep consumers coming back for more, the quality of products needs to be consistently high.  In either industry, a dip in quality means financial losses from unsalable product, lost sales revenue, and damage to your brand.  

What are the steps in setting up a supplier monitoring program?

1. Supplier monitoring programs start with robust specifications.  (Don’t worry, these don’t exist in most organizations!)  Good specifications should be more than just a few micro levels and a sensory section that says “flavor typical of [food product].”  They should list microbiological risks, chemistry metrics that affect performance, physical testing parameters, and a detailed sensory section, preferably quantitative data.  

2. Product categories should then be prioritized by quality risk, brand impact, and cost.  Supplier monitoring programs should be created to minimize your risks---that does not mean you need to test every item! The program should be built with careful consideration of the most meaningful tests and testing frequency.   

3. Choosing a testing provider.  I worked in third party testing for 20 years.  Just call me….it’s a long story.

4. Closing the loop.  This is by far the hardest step and it is usually the step that prevents people from instituting a supplier monitoring program in the first place.  It has to be a closed loop---you must know what you will do with the data, how you will manage and organize it, and what steps will take place when an out of spec item is discovered.  The entire program draws strength when the right person is dedicated to these tasks.  

Supplier monitoring programs are necessary if you want to improve your quality metrics.  They can take private label grocery and restaurant chain quality parameters and show tangible decreases in consumer complaints and increases in return purchases.  They need a robust foundation of strong specifications and a dedicated expert to drive changes in supplier behavior.  

When you are ready to embark on your quality journey, contact Food Improved Consulting Group.  We are experts in driving improvement.  (and we are happy to be that dedicated person in step 4.  I know you don't have time.)