The emerging use of COIN (Community of Interest) networks to manage compliance reporting within the supply chain<br />Pres...
The SQF Code requires Compliance Communication<br />4.3 Specification and Product Development<br />4.3.2 Raw Materials<br ...
How does it work in practice?<br />Corrective actions also need to be sent out and actioned<br />Also need to collect Cert...
The duplication across the industry<br />Across an industry, over 90% of all copies of compliance documents are waste.<br ...
Time wasted filing documents
Cost of storage
Missed information</li></li></ul><li>iCiX Global Survey on Compliance Management<br />As a knock on effect of drowning in ...
Some open responses from our global survey<br />A number of respondents expressed concern that Supplier Compliance Managem...
Some research results<br />What type of system do you use to manage your suppliers compliance?<br /><ul><li>79.6% of organ...
It’s expensive<br />
And it’s expensive<br />In 2003 Food Standards ANZ reported example recall costs<br />Major retailer conducting national r...
The current way of tracking compliance<br />Distribution<br />64.2% lack coherent standards of what documents actually req...
A day in the life of....<br />“It’s a  mind numbing,  soul destroying, never ending task”<br />
The four stages of Compliance Management<br />The Uninformed<br />Are we supposed to be tracking supplier compliance?<br /...
Isn’t that the responsibility of our suppliers?
What should we track anyway?</li></ul>The Grudgingly Compliant<br />We track supplier compliance but<br /><ul><li>it’s ver...
It’s time consuming</li></ul>The Risk Takers<br />We know we should track it but we don’t.  <br /><ul><li>It’s too expensive
It’s too time consuming
We’re not sure what we need to track
We keep our fingers crossed nothing goes wrong
We hope the auditor doesn’t notice all the missing supplier information</li></ul>The Sorted<br />We are COINing it.<br /><...
It takes very little time.</li></li></ul><li>The top three reasons for inaction<br />Insufficient time<br />Inadequate bud...
Community of Interest (COIN) networks<br />COINing It<br />
The COIN Approach<br />Buyers post all their policies and procedures to their secure site.  May also post technical specif...
The COIN – COA’s and Audits<br />Auditing and certification companies  and laboratories are also part of the COIN.<br />Bu...
The COIN - Recall<br />Customers also join iCiX.<br />This allows for recalls, CAR’s, smartforms, etc<br />Buyers<br />COI...
Key Characteristics<br />Each organisation has it’s own site<br />The responsibility changes from <br />“Buyer collects” t...
Follow on benefits of COIN networks<br />Real time reports with high confidence<br />Broadcast  messages to suppliers<br /...
Cost Savings<br />
The top three reasons for inaction<br />Insufficient time<br />Inadequate budget<br />Insufficient administrative resource...
Analysis<br />
Recalls, Withdrawals and CAR’s on iCiX<br />Recalls and Withdrawals<br />1,426 recalls covering over 111,000 products with...
Urgent Class 2 Recall
Upcoming SlideShare
Loading in...5
×

The Emerging Use of Community of Interest Networks to Manage Compliance within the Supply Chain

826

Published on

by Nigel Dalton Brown

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
826
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
15
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • Effective hourly cost based on annual salary of $60k with 1.5 uplift to account for sick days, leave, PC heating.... etc.
  • Anecdotal evidence of talking a large number of clients and prospects gives me the following four types of
  • Research has shown that organisations and individuals fail to comply for various resaons cost of regulatory compliance insufficient resources and expertise to address compliance requirements lack of knowledge of requirements or even indifferenceFrom a 2008 survey by Integrity InteractiveTo counter the “no time”, 86% of respondents have decided that someone else (i.e. Suppliers themselves or and independent third party) should take on the actual day to day grind of driving supplier participation in the purchasers ethics and compliance initiativesTo circumvent the “no budget”, 75% of respondents have decided that suppliers should share or bear the cost of participating in the purchasers ethics and compliance initiatives
  • From a 2008 survey by Integrity InteractiveTo counter the “no time”, 86% of respondents have decided that someone else (i.e. Suppliers themselves or and independent third party) should take on the actual day to day grind of driving supplier participation in the purchasers ethics and compliance initiativesTo circumvent the “no budget”, 75% of respondents have decided that suppliers should share or bear the cost of participating in the purchasers ethics and compliance initiatives
  • Effective hourly cost based on annual salary of $60k with 1.5 uplift to account for sick days, leave, PC heating.... etc.
  • Research has shown that organisations and individuals fail to comply for various resaons cost of regulatory compliance insufficient resources and expertise to address compliance requirements lack of knowledge of requirements or even indifferenceOur recetn survey, 64.2% of respondants said they were Partially or not fully aware of their regulatory responsibilities for managing supplier compliance
  • The Emerging Use of Community of Interest Networks to Manage Compliance within the Supply Chain

    1. 1. The emerging use of COIN (Community of Interest) networks to manage compliance reporting within the supply chain<br />Presented at the 17th Australian HACCP Conference and 5th SQF International Conference<br />August 2010<br />Melbourne, Australia<br />Nigel Dalton-Brown, iCiX Asia<br />
    2. 2. The SQF Code requires Compliance Communication<br />4.3 Specification and Product Development<br />4.3.2 Raw Materials<br />4.3.3 Packaging<br />4.3.4 Contract Service Providers<br />4.3.5 Contract Manufacturers<br />4.3.6 Finished Product<br />Distribution<br />4.4 Attaining Food Safety<br />4.4.5 Incoming Goods and Services<br />4.4.6 Corrective and Preventative Action<br />4.6 Product Identification, Trace, Withdrawal and Recall<br />4.6.2 Product Trace<br />4.6.3 Product Withdrawal and Recall<br />5.3 Water and Ice Supply<br />5.3.1 Water Supply<br />5.3.3 Ice Supply<br />6.8 Monitoring Water Microbiology and Quality<br />6.8.3 Analysis<br />6.10 Supplier Approval<br />6.10.1 Selecting Approved Suppliers<br />6.10.2 Approved Supplier Program<br />6.10.3 Monitoring Approved Suppliers<br />6.10.4 Register<br />6.10.5 Records<br />Supply<br />6.13 Allergen Control<br />6.13.2 Risk Assessment<br />
    3. 3. How does it work in practice?<br />Corrective actions also need to be sent out and actioned<br />Also need to collect Certificates of Analysis from Laboratories and testing houses<br />Buyer sends copies of policies and procedures to all suppliers<br />We also need to carry out mock recalls and Product Withdrawals<br />Distribute Policies and Procedures<br />Collect Compliance Certificates<br />Certificates of Analysis and Audits<br />Corrective Actions<br />Product Withdrawals and Recalls<br />Now need to store and manage multiple certificates from multiple suppliers all with different expiry dates<br />Now have multiple copies of policies and procedures across all suppliers<br />Buyer sets up relationships with suppliers<br />
    4. 4. The duplication across the industry<br />Across an industry, over 90% of all copies of compliance documents are waste.<br />What is the cost to an industry in terms of <br /><ul><li>Time wasted looking for information
    5. 5. Time wasted filing documents
    6. 6. Cost of storage
    7. 7. Missed information</li></li></ul><li>iCiX Global Survey on Compliance Management<br />As a knock on effect of drowning in paperwork, 64.2% of respondents said they were not aware or partially aware of all their self regulatory and regulatory responsibilities for managing supplier compliance. <br />iCiX/IPcubed Global Survey into the perceived importance of compliance management – May 2010<br />
    8. 8. Some open responses from our global survey<br />A number of respondents expressed concern that Supplier Compliance Management was not getting the attention it deserved.....<br />Supplier Compliance is an issue that is at times neglected when minor issue are ignored. However it is the minor issue that eventually contribute to major fallout's<br />Totally ignored till it is too late.<br />As part of the contract commencement, we request the required docs/certs before the contract is signed. Where we are not so good, is managing the document expiry during the life of the contract.<br />My company does not have a central repository for tracking contracts let alone compliance. Each department is allowed to manage or not manage as they deem appropriate<br />A real time system would be very helpful but cost is a constant constraint<br />iCiX/IPcubed Global Survey into the perceived importance of compliance management – May 2010<br />
    9. 9. Some research results<br />What type of system do you use to manage your suppliers compliance?<br /><ul><li>79.6% of organisation have no system or a manual system for managing thousands of compliance documents </li></ul>Approx how many compliance documents do you believe your organisation needs to manage?<br /><ul><li>60.4% of organisations are trying to manage over 1,000 compliance documents each with different expiry dates. </li></ul>28.9% of companies are dealing with over 10,000 documents<br />44.0% of companies are dealing with over 5,000 documents<br />60.4% of companies are dealing with over 1,000 documents<br />As a result, almost 50% of companies responded that they did not remove suppliers for non-compliance because they could not track it well enough. <br />These organisations are definitely at risk!<br />iCiX/IPcubed Global Survey into the perceived importance of compliance management – May 2010<br />
    10. 10. It’s expensive<br />
    11. 11. And it’s expensive<br />In 2003 Food Standards ANZ reported example recall costs<br />Major retailer conducting national recall of 17,680 cartons of frozen processed chicken: <br />press advertisements $51,521<br />stock costs $75,709<br />cost of recovery $119,425<br />labour costs $4,000<br />other associated costs $7,217 <br />Total cost of recall $257,872<br />FSANZ did not account for consequential loss such as<br />Loss of revenue<br />Damage to brand<br />Data from Food Standards ANZ, 2003<br />
    12. 12. The current way of tracking compliance<br />Distribution<br />64.2% lack coherent standards of what documents actually required<br />79.6% use a manual, labour intensive, paper based system (excel or a database)<br />44% deal with over 1,000 documents<br />50% do not remove suppliers for non-compliance because they could not track it well enough. <br />Staff waste hours chasing<br />missing documents<br />out of date documents<br />Generally<br />inaccurate<br />costly<br />lower quality due to lack of tracking of COPQ<br />exposes the organisation to risk<br />Supply<br />
    13. 13. A day in the life of....<br />“It’s a mind numbing, soul destroying, never ending task”<br />
    14. 14. The four stages of Compliance Management<br />The Uninformed<br />Are we supposed to be tracking supplier compliance?<br /><ul><li>Why?
    15. 15. Isn’t that the responsibility of our suppliers?
    16. 16. What should we track anyway?</li></ul>The Grudgingly Compliant<br />We track supplier compliance but<br /><ul><li>it’s very expensive
    17. 17. It’s time consuming</li></ul>The Risk Takers<br />We know we should track it but we don’t. <br /><ul><li>It’s too expensive
    18. 18. It’s too time consuming
    19. 19. We’re not sure what we need to track
    20. 20. We keep our fingers crossed nothing goes wrong
    21. 21. We hope the auditor doesn’t notice all the missing supplier information</li></ul>The Sorted<br />We are COINing it.<br /><ul><li>It’s inexpensive
    22. 22. It takes very little time.</li></li></ul><li>The top three reasons for inaction<br />Insufficient time<br />Inadequate budget<br />Insufficient administrative resources<br />To counter the “no time”, 86% of respondents have decided that someone else (i.e. suppliers themselves or an independent third party) should take on the actual day to day grind of driving supplier participation in the purchasers ethics and compliance initiatives<br />To circumvent the “no budget”, 75% of respondents have decided that suppliers should share or bear the cost of participating in the purchasers ethics and compliance initiatives<br />The emerging solution has a great deal to do with collaboration<br />Source: Building an ethical supply chain. Michael Levin, 2008<br /> Integrity Interactive Survey, 2008<br />
    23. 23. Community of Interest (COIN) networks<br />COINing It<br />
    24. 24. The COIN Approach<br />Buyers post all their policies and procedures to their secure site. May also post technical specifications for suppliers to reference.<br />Only ONE copy is posted on the COIN network. This single copy is then made available to relevant suppliers<br />Each organisation, buyers and suppliers, joins and creates their own secure site<br />The COIN network exists to provide many-to-many connections between trading partners<br />Documents are no longer stored and collected. The key metadata is used to generate reminders and reports in real time.<br />In the same way, suppliers post ONE copy of each relevant compliance certificate, PLUS key metadata, e.g. Type, expiry date, alergens/nutritional data, product specifications...<br />
    25. 25. The COIN – COA’s and Audits<br />Auditing and certification companies and laboratories are also part of the COIN.<br />Buyers can request audits with the results posted onto the suppliers sites for viewing by the buyer.<br />
    26. 26. The COIN - Recall<br />Customers also join iCiX.<br />This allows for recalls, CAR’s, smartforms, etc<br />Buyers<br />COIN<br />A many to many Community of Interest<br />Third Party Auditors<br />Certification bodies<br />Laboratories<br />Customers<br />Suppliers and subcontractors<br />
    27. 27. Key Characteristics<br />Each organisation has it’s own site<br />The responsibility changes from <br />“Buyer collects” to <br />“Supplier publishes and shares”<br />Communication paths created with third parties: Auditors, Laboratories, Customers and Regulators<br />Documents are loaded only once<br />Costs are shared across the industry<br />
    28. 28. Follow on benefits of COIN networks<br />Real time reports with high confidence<br />Broadcast messages to suppliers<br />Product Recall/Withdrawl in hours not days or months<br />Corrective action requests with COPQ claims<br />PDF online forms for compliance related work<br />
    29. 29. Cost Savings<br />
    30. 30. The top three reasons for inaction<br />Insufficient time<br />Inadequate budget<br />Insufficient administrative resources<br />To counter the “no time”, 86% of respondents have decided that someone else (i.e. suppliers themselves or an independent third party) should take on the actual day to day grind of driving supplier participation in the purchasers ethics and compliance initiatives<br />With COIN, suppliers carry out the day to day grind of publish documents. COIN also reduces unnecessary copies by approx 99% <br />To circumvent the “no budget”, 75% of respondents have decided that suppliers should share or bear the cost of participating in the purchasers ethics and compliance initiatives<br />Under COIN systems, everyone pays and so the costs are spread.<br />The emerging solution has a great deal to do with collaboration<br />COIN networks are by definition collaborative<br />Source: Building an ethical supply chain. Michael Levin, 2008<br /> Integrity Interactive Survey, 2008<br />
    31. 31. Analysis<br />
    32. 32. Recalls, Withdrawals and CAR’s on iCiX<br />Recalls and Withdrawals<br />1,426 recalls covering over 111,000 products with over 540,000 items pulled off shelves<br />Corrective Action Requests (CARs)<br />22,950 CAR’s from 12 October, 2005<br />IV-Critical 748<br />III-Major 11,922<br />II-Minor 9,920<br /><ul><li>Urgent Class 1 recall
    33. 33. Urgent Class 2 Recall
    34. 34. Urgent Class 3 Recall
    35. 35. Market Withdrawal
    36. 36. Mock recall
    37. 37. Quality Withdrawal
    38. 38. Pull-and-Hold
    39. 39. Voluntary Recall
    40. 40. Stock Check Recall
    41. 41. Quality Check Recall</li></li></ul><li>How does recall work on iCiX COIN<br />Company enters recall information on the iCiX system.<br />User chooses group of customers who need to receive the recall notice.<br />User issues a recall by phone, fax and/or e-mail. <br />Within a few minutes, the iCiX system calls everyone’s phone with details of the recall and asks them to log onto the iCiX system.<br />Users log onto iCiX, check the details and remove items from shelves and storage. Users also confirm the actions taken, the number of items removed and electronically sign their recall action notice.<br />Original user tracks progress hourly.<br />When response rate drops off, generally after 3 hours, the user sends out a follow up phone call to all recipients who have yet to respond.<br />Recall is generally 90% completed within 2.52 hours<br />
    42. 42. Product recalls/withdrawals using iCiX<br />The “less than 1hr” average response rate has grown from 30.7% to 45.1% and is now 59.2%<br />
    43. 43. Product recalls/withdrawals using iCiX<br />We have an average completion rate of 77.1% within 2 hrs<br />Client A is achieving 82.1% within 2hrs across 133 recipients<br />
    44. 44. Incorrectly labelled product96.8% recall within 2hrs<br />Client A recall August 9th, 2010<br />
    45. 45. CAR using iCiX<br />Data taken from iCiX database from 12/10/2005 to 17/08/2010<br />
    46. 46. CAR using iCiX<br />Data taken from iCiX database from 12/10/2005 to 17/08/2010<br />
    47. 47. Key differences<br />
    48. 48. Janet, I need a Risk Management Assessment on our suppliers<br />The assessment showed that there was a high risk of no management<br />Risk Management Assessment.....<br />Framework Software (UK)<br />
    49. 49. It can be different<br />Distribution<br />Supply<br />
    50. 50. FREE iCiX-RECALL<br />Sign up to receive free use of iCiX-RECALL module for 3 years<br />Thank You<br />Nigel Dalton-Brown, iCiX Asia<br />
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×