Episode 4

Jack Payne is Aptean’s solutions consulting director, focusing on Food & Beverage ERP. He has more than 30 years of industry experience and has spent much of that time working with manufacturers to understand their challenges and tailor the development of the product accordingly. Over the years, Jack has collaborated with customers, industry analysts and developers to create a strong vision for our ERP solutions. He’s become a respected industry resource for best practices and future technological.

He joined “Ready For What’s Next, Now” host John McCurdy for the episode “Digital Digest: Why Food Safety Matters”.

Transcript:

John McCurdy: Welcome back everyone, for another episode of “Ready for What's Next, Now,” an Aptean podcast. I'm John McCurdy, your host for the week, and I'm thrilled to be joined by one of the thought leaders in our organization, Jack Payne, for this week's episode.

Keeping with this week's observance of World Food Safety Day, Jack is going to share with us the importance of food safety in today's ever-evolving business landscape. With over 30 years of industry experience, he's a wealth of knowledge and a fantastic resource for best practices information. Jack, thanks so much for taking time out of your day to chat with us.

Jack Payne: It's always a pleasure to be here. I'm glad to be back and talk about one of my favorite topics, which is food safety and food quality. Thank you.

JM: So Jack, it seems like, despite the progress the industry has made, food safety might be even more important than ever today. Can you tell us why you think that’s the case, and are there any indications that improvement is underway?

JP: So, the Global Food Safety Initiative came about in 2000. Then, FSMA—the Food Safety Modernization Act—was signed into law in 2011, over 10 years ago now, calling for mandatory compliance. That's actually had global influence with food safety across the world.

But if you look at the statistics, there's still 600 million people per year in the world getting sick from contaminated food. Almost 420,000 people die annually due to contaminated food. It’s very scary.

Then again, if we look at what's happened in the last two years--this may be the only silver lining I've seen with this—foodborne illnesses have actually decreased by 26% compared to the prior years. This has probably just been the impact of people washing their hands and practicing good sanitation—the result is we've had better food safety.

JM: Got it. What's your take on the trends that will impact the area of food safety in the future, and how should these changes inform the priorities for business leaders today?

JP: I'm going to share with you not just my thoughts but also a study that we had commissioned last year with over 700 food and beverage companies. There weren’t a lot of surprises—it just reinforced our thoughts on this.

Sustainability was identified as one of the key trends going on in the industry. Technology as a means of support ranked very highly too. But also in that top five was increased traceability, as well as regulatory and legislative changes. Part of that came from 2020’s New Era of Smarter Food Safety blueprint published by the FDA. They're currently working on those regulations today and they say there will be some guidance by the end of 2022.

JM: Right, and in the UK you have the recently passed Natasha’s Law concerning the proper labeling of allergens.

JP: It kind of falls in line with the trends. With the study, we saw sustainability, reducing waste, recycling—these things are top of mind for everybody—but falling right behind that is food safety and quality, making sure that they have safe food.

Now today, with the advent of social media, if there's a food recall, you’re probably going to see it in just a few minutes. So it's more top of mind—more people are aware of it and cognizant of it. And it’s a more important topic for consumers.

JM: That makes a lot of sense. So Jack, we know the traceability and food safety are definitely linked. Can you tell us a little bit more about how companies have evolved their approach to traceability and what challenges they're still encountering in mastering end to end traceability?

JP: Sure John. So, one of the things that we also included in our survey was the importance of traceability, which plays a key role in food safety. Obviously, prevention is key, but also we have to have traceability along with that. So it was not a surprise that it is seen as very, very important worldwide.

When we look at what I'm going to call the basics of food safety and traceability—being able to track supplier receipts, knowing where those supplier receipts go, what products you shipped to which customers—most people are doing that pretty well. Those are the basics of food safety. But it's the other challenges, those exceptions that come up, that can be an issue.

So anytime there's a recipe change—do we have the proper labeling with that recipe change? Or is maybe the old version of the recipe still out in the factory and batches are being processed using the that old version of the recipe? Are good manufacturing practices being followed in manufacturing?

Also, there’s what's happened with the pandemic in terms of the labor force and labor turnover. So we have to be concerned about training of employees, and maybe even retraining employees who have been out of work for a while—when you get out of practice, you need to do that retraining.

What we found is these are the challenges most people have with food safety. They've got the basics down with traceability, but it's all these exceptions and these new things that come up that cause problems. And you only need one event to cause a food safety contamination—so we need to control all of them.

JM: Right. So taking it up to a higher, more holistic level, let's talk about digital transformation. It's a concept we champion here at Aptean, but can you speak to how such a change initiative can potentially improve food safety outcomes for companies?

JP: That's a great question, and you're not the only person to ask it. Food safety can definitely be improved through digital transformation. Just as a reminder for listeners—digital transformation is not about plugging in a bunch of sensors and starting to collect data. I mean, that's a part of it, but really it's a business transformation and how you use that information, how you use the data you collect.

Unfortunately, what we find to be the current state in too many companies that we go into is their food safety is a manual process, it’s paper-based, or it may be what we call “spaghetti code.” It's not tied into the ERP or other primary business systems. So this is one of the areas that we typically want to address with food safety and digital transformation.

The first part is how we collect the data. Are we collecting the data through basic things like barcode scanning? Do we use sensors? In terms of food quality, you may need to monitor temperatures—if you're cooking food, you need to make sure it's cooked at the proper temperature, and if you cool or freeze food, you have to make sure that you're maintaining a consistent temperature over time.

So we need to be able to collect the data very simply and easily. We also need alerts so we know when things start going out of control. If, for example, we're supposed to cook a meat to a certain temperature and we start seeing that we're not getting close enough to the right temperature, we need to know that so we can take action to prevent the problem.

Then, there’s analytics. If you move specifically into predictive analytics, you can see the trends and what's going on right now. So we can take out those barriers and eliminate the things that cause problems with food safety—that, plus traceability, is what we need to maintain safe food.

JM: Got it. Do most food and beverage companies that are engaging in digital transformation see the same sorts of results, or are there differences in their approaches that affect their outcomes?

JP: Great question, John. One of the things that we've seen over the last year is a lot of food and beverage companies have advanced in their state of digital transformation. A year ago, we saw over 10% of the companies that had not even started and weren’t even thinking about it. Today, that’s less than 1%.

A year ago, we saw only 2 to 5% of companies thought they had really gone through a full digital transformation. That's now up to about 25% of the companies. And in between those two end points, there's been a lot of progress.

Another thing that we looked at in terms of success of digital transformation was how it improved the business in terms of key performance indicators. The results that came back indicated that every part of the business was improving with digital transformation, whether it was food safety, quality, supply chain management, customer service, accounting, maintenance—all areas had improvement. But what was very interesting was the area that had the most improvement in performance was food safety and food quality, followed closely by supply chain.

So the answer is yes, digital transformation drives overall improvements across businesses that have gone through the process or going through the process. Keep in mind it's a journey, it's not a destination, and you have progress as you go along.

We also looked at the bottom line—how did it affect the revenue of the company? How did it affect the profitability of the company? What we saw was that a higher level of maturity in digital transformation was directly related to increased revenue and increased profitability.

JM: Absolutely. I think that's a great way to frame it. Anyway, that about does it for this episode. So I'll just thank you, Jack, one more time for being on the program, as well as our listeners for tuning in. Until next time, we'll be looking forward to getting you Ready for What's Next, Now.