Sustained safety, quality programs deliver ROI in food and beverage

Feb. 1, 2015

The North American food & beverage industry believes in a sound workplace and food-safety environment, yet unacceptable accidents and oversights continue to happen.

The North American food and beverage industry believes in a sound workplace and food-safety environment, yet unacceptable accidents and oversights continue to happen.

For proof, scan any weekly U.S. FDA report to find a long list of voluntary or mandatory food processing industry recalls. Here are just a few examples from a weekly FDA summary in October 2014:

  • The agency orders the recall of a pasta sauce after routine testing reveals the presence of potentially "life-threatening" bacterium.
  • A breadcrumb provider is ordered to recall product because of undeclared wheat, soy and milk.
  • A packing company voluntarily recalls fresh and frozen crabmeat because of Listeria concerns.

Prohibitive costs associated with recalls can crush profitability. According to a 2012 report published by the U.S. Public Interest Research Group, "contaminated food makes 48 million Americans sick every year and costs over $77 billion in aggregated economic costs" — a figure borne out with specific information about recalls provided by the U.S. Department of Agriculture:

  • USDA estimates the cost to the industry and consumers for recalls associated with non-typhoid Salmonella in 2013 at $3.6 billion.
  • Listeria took its toll on the bottom line in 2013 as well: $2.6 billion.

Many of these recalls have been traced by investigators to flawed process or training protocols at processing plants. These deficiencies also apply to workplace safety.

According to OSHA, the top three most frequently cited safety violations in 2014 were fall protection, hazard communications and scaffolding. One need not be a visionary to imagine how much the industry could have profited had a better food-quality and workplace safety culture existed.

Dollars and cents

What does a food-quality and workplace safety culture cost a company?

Any doubts about the financial return from a more focused, enhanced culture should be balanced by an awareness of the unsustainable costs of not having this culture.

Moreover, no hard and fast answer exists. Employee safety and enterprise profitability, at end of day, hinge on over-all company culture, workforce training, process, production and product complexities and supply-chain interactions.

Bottom lines are threatened, however, by out-of-specification product and customer dissatisfactions with market withdrawals or recalls. These customers expectations, regulatory requirements and audit compliances can compound into a financial, and accounting, challenge. It’s no wonder executives lose sleep worrying about product quality, worker safety and potential for losses tied to lack of customer or consumer confidence.

Segue to benefits

Analyzing the benefits of food quality and workplace safety reveals a different aspect of a shared reality. Unnecessary expenditure is forestalled by trained and empowered employees, well-established processes, safety supervision and robust food-safety and quality programs. The latter can and will avert costly recalls.

Consistent quality that meets expectations results in repeat sales and customer retention. Workplace accidents are reduced or prevented in a safe environment. That helps manage compensation costs.

More is involved in food-quality and workplace safety than risk mitigation. Creating a food-quality and workplace safety culture is fundamental to better return on investment and enhanced profitability. The latest technology tools can make this culture a reality, while delivering a positive return on investment.

The ideal corporate culture

To determine what constitutes an ideal food-safety and workplace safety culture, start by examining employee and management behavior.

For employees, confirm food quality and safety are embedded in their on-the-job behavior as evidenced by their knowing and practicing the right actions, even when no supervision is present. As for managers, simply imploring workers to execute their responsibilities is never enough. Rather, it is important for managers and executives to exemplify that the rules apply to them as well and act accordingly.

Unfortunately, that is not always the case. For example, if executives visit a plant but fail to wear the appropriate clothing, it sends a wrong message. Good management practices and safety rules are for everyone. Such conduct will always send the wrong message.

Pudding-like proof

Engaged and committed employees display attitudes and work skills indicative of the paramount importance of culture in their work environment.

Companies with highly engaged employees report significantly better quality and safety as a result. Ronald Benson, corporate trainer for the National Beef Packing Co. facility in Moultrie, Georgia, cites a never-ending emphasis on training to positively influence worker behavior and productivity.

"A better trained or engaged employee will allow us to have a greater impact on quality, safety, yield and productivity," Benson said. "Workers have better retention and understanding, and they take it out on the floor."

Employee engagement in food safety needs to be a top priority. Technology facilitates engagement with making safety and quality the top priority.

As Benson points out, it starts with training. A lecture series with little or no interaction is less effective than one engaging with employees at each training step. Interactive, computer-based training improves concept comprehension and pinpoints areas for improvement.

Such training, though effective, may not be enough. Without follow-up, employees will drift away from even well-established health, safety or quality guidelines within months, or even weeks. Many companies lack time and resources for consistent follow-up, which increases risk for workers, company and public.

What’s needed is ongoing supervision. Technology tools make possible the kind of follow-up and supervision that even recently was too expensive and time-consuming for over-burdened managements. Supervisors can rely, for example, on "real-time" technologies in the form of a tablet-based coaching apps.

Coaching technology at work

Wireless technology allows "corrective observations" with less time-consuming paperwork or data entry.

Observations and corrective actions are automatically transferred into a learning-management system and into the employee’s file. Correct guidance is conveyed through customizable templates that assure relevant coaching. One big benefit is the system’s ability to engage the employee as well as supervisor. This type of coaching creates a positive learning environment for improving performance, potential and quality production.

Benson agrees real-time coaching is a necessity to keep workers focused while on the plant floor. "I served on a test board to help develop Alchemy’s coaching app, and it’s something we’re excited about," he says.

Employee communications improve, and, with multi-language capabilities, this is true even when English fluency is lacking. Mistakes are quickly corrected with real-time feedback, data tracking and trending, both integral to ensure best practices. Employees focused on everyday food safety and quality, coaching helps avert and eliminate challenges.

Summing up

Food safety, food quality and workplace safety should never be viewed as obstructions to ROI and profitability. Dollars spent to ensure that employees have the training and education along with supervisory technology that focuses on safety and consistent product quality every hour of the workday are well worth the budgetary considerations. The money saved by preventing mistakes in every process may not be quantifiable, but the FDA’s weekly reports graphically disclose how expensive mistakes can be, especially when those errors are preventable.

Instead of focusing on the cost of quality and safety, it makes more sense to analyze the impact on profitability if such a culture is not emphasized every day in every process. Based on FDA documentation, the answer is evident. Profitability in the short- and long-term will suffer and so will ROI. No company can afford that.

Holly Mockus is a product manager with Alchemy Systems, Austin, Texas.

Alchemy Systems is a supplier of innovative technologies and services designed to align employee behavior with a company’s quality and safety commitments. For additional information, please call 888 988-1832.

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