Advertising Expenditures and the Return on Investment

One of the most challenging things for a business is to measure the return on investment in advertising.

Product safety and quality management certification forms part of the business promotion campaigns of many companies. Some customers also require their suppliers to be certified by third parties.

I have found that many operations gain some improvements in their product safety and quality management systems through the certification process. There is often an infused consistency of implementing and maintaining the measures for ensuring product safety and quality. At the same time, it is apparent that some certified operations may not necessarily have poor safety and quality standards prior to the certification process. For example, I have received direct comments from operators that they have always produced and will continue to produce safe and high quality products even without certification. They have also said that the added expenses of additional personnel, required construction if applicable, and paperwork management expenses associated with the certification process are not directly recoverable as customers do not necessarily accept increased pricing to compensate for the added expenses.

Product safety and quality management certification expenses are often described as the cost of doing business with anticipated returns. As such, it is only prudent for these investments to be measured against the returns.

From my experience and observation as a food safety specialist I have calculated and I strongly believe that current spending for food safety and quality management and certification programs can be reduced across the board (i.e. for all companies). Even something as small as a reassessment of the focus, administration, effectiveness and utility of voluntary or imposed third party certification could lead to a substantial operating cost reduction for companies. Up to 50% or greater cost reduction can be achieved without jeopardizing the safety and quality of the products under the SSQA Concept.

Posted By Felix Amiri

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Felix Amiri is the current Food Sector Chair of GCSE-Food & Health Protection

Adopting the GCSE-Food & Health Protection SSQA - Safety, Security and Quality Assurance Model

Various concepts for product safety and quality management have evolved over the years. Adopted systems have progressed from periods of complete absence of formal approaches to the adoption of various quality and product safety management models by different companies in different industries. We have: TQM (Total Quality Management); the Six Sigma; the 5-S or 6-S systems (Sorting, Stabilizing or Straightening, Sweeping or Shining, Standardizing, Sustaining the Practice); the SWOT (Strength, Weakness, Opportunity, Threat) analysis and the FMEA (Failure Mode and Effects Analysis) models, Statistical Process Control, Statistical Quality Control, etc. We also have Lean Manufacturing approaches, ISO (International Standards Organization) system, HACCP (Hazard Analysis and Critical Control Point) system, GFSI (Global Food Safety Initiative) Benchmarking system, and many more.

The evolution continues with the Safety, Security and Quality Assurance (SSQA) concept. Why do we need this concept and where does it fit in the scheme of things? Several areas of key differences are listed: GCSE-Food & Health Protection SSQA.

Here are some of the significant differences:

Many of the current approaches force operations to adopt them exclusively and in isolation. In contrast, the SSQA model is an open-minded yet focused approach to product safety and quality management. The adoption of the SSQA concept by an operation means that the operation actively encourages its personnel to search, investigate, recognize, adopt and expand upon winning ideas. Such ideas could come from current and future excellence-producing management approaches. The SSQA model is didactic, eclectic, organic and progressive in producing continuous improvement in any operation. The SSQA concept brings together the theory and reality of product safety and quality assurance. 

There is another salient difference. GCSE-FHP SSQA does not only require continuing, and direct contributions from all parties; it also directly and actively drives the engagement of all parties. Through its Participatory Alliance Principles, the SSQA concept actively engages the entire material supply and utilization chain. It drives continuous improvement processes and loss mitigation  actions with strategies for measuring and expanding successful achievements.

Other Differentiating Key Concepts and Strategies:

The SSQA system involves strategies that ensure resource-efficient and effective implementation of programs, procedures and actions.These strategies can be represented in this short instructive phrase: "Entice team-mates who care about facts". A brief explanation of the specific strategies is  provided as follows:

Entire Chain Engagement – otherwise known as “ENTI-CE”

Through the ENTI-CE strategy, SSQA drives the active engagement of the entire material supply, processing, distribution, product utilization, regulators and assessors chain in the continuous improvement process with measurable success. ENTI-CE is one of the primary strategies in the SSQA concept.

Team Mobilization to Action through Tracking of Exceptional Success – “Team-MATES”      

Engaging the entire team with the incorporated Extra Pay Incentive in the tracking of successes (positive internal achievements and positive consumer feedback) and the contributing factors as part of the strategy for maintaining continuous improvement action. 

Continuing Analysis of Realized Effectiveness and Efficiencies – “CARE”

CARE involves a review of implemented actions (identified), expended resources (quantified) and realized benefits (quantified) as part of the Continuous Improvement Accounting. The CARE strategy drives a continuing commitment to ensuring resource efficiencies and optimization.

Failure Analysis and Control Tracking System – “FACTS”

This SSQA strategy ensures the ongoing failure elimination process through the tracking and prevention of real time quality control incidents, as well as the tracking and prevention of the causes of consumer complaints. Note: Positive feedback from consumers or customers are considered under Team-MATES

DMS-HACCP (HACCP with consideration given to DMS - Difficult to Manage Situations). A DMS-HACCP  program incorporates FACTS that are real to the operation.

Key SSQA Roles

In the SSQA model, there are some key universal roles of Assessor (Auditor), Facilitator and Consultant. The general definitions and differentiation are provided briefly as follows:

The Assessor:

This is not a consultant's role but the assessor serves as a provider of technical evaluation of implemented programs. The Assessor evaluates operations against identified effectiveness standard in order to establish the level of effectiveness achieved. Where effectiveness is deemed to have been achieved, the assessment process is expected to conclude until another scheduled assessment. Where the satisfactory effectiveness is not deemed to have been achieved, the program is noted as having failed that requirement. The Auditor submits a corrective action request and awaits the corrective action response in order to determine if a satisfactory level of effectiveness  has been achieved.

Under the SSQA model, the emphasis is always on the validity and effectiveness of implemented programs. In other words, the Assessor’s conclusions about implemented programs are not based merely on the wordings of a written standard. The persistent frame of reference is the effectiveness of what is evaluated to mitigate real concerns that are associated with the evaluated item.   

The Facilitator:

This is an implementation level consultation role. The Facilitator serves as a technical assessment and solution implementation resource. This is in addition to performing the Assessor’s role. Where systems are found to be effective the process does not conclude. It loops into the continuous improvement cycle. Where systems are found to be ineffective, the operation is noted as having failed in that aspect. The Facilitator conducts the root cause analysis investigation (with the facility's full involvement) and works with the facility to assess different available and effective solution options. The Facilitator assists in the solution implementation & re-assessment through the continuous improvement loop.

Consultant:

This is the expert level consultation role. The consultant serves as the technical solution finding and implementation resource. This is in addition to the Facilitator’s role. The Consultant is expected to recommend best solution options and assist the facility in the implementation of recommended solutions. The Consultant also assists the facility in its continuous improvement initiatives.

SSQA is for food businesses that no longer wish to continue with food safety cat and mouse games:

Write your story - leave a lasting legacy - Join the SSQADevelopment (SSQA-D) Community – "the SQUAD": 

If you wish to receive updates about the SSQA concept and programs you may:
 REGISTER HERE:
OR
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Cost of Quality - Simple Calculation Chart

Free Download Termination Notice:

With the release of the SSQA Implementation Manual, we regret to say that the free download of the following tools has ended:

• The Quality Cost Calculation Chart
• Paperwork Reduction Guide
• Detailed Procedure Writing Guide
• Paperwork Importance Determination Scale (MUD Scale)
• Partner Prioritization Chart
• Change Management Control and Tracking Chart
• Operation Function and Department Organization Guide; etc. 

These tools and updates will now be available only to enrolled SSQA Participants. Information about enrolling in the SSQA Program is provided on the Program Enrolment page.

It is always a good thing to stop once in a while to take stock. This also applies to operations that are working hard to establish and maintain effective product safety and quality management systems. Taking stock of how much is spent and how much is gained in return is an essential activity for any business. It provides the picture that guides an operation to more efficiently allocate and utilize its resources. 

The simple calculation chart that is currently provided with the SSQA program serves as a minimum starting point in quality system management ROI determinations. Business owners, quality systems managers, etc. may find it helpful. It can be used to determine how much is spent, what system effectiveness is derived in return, what expenses can be dropped without affecting effectiveness, etc.

It is possible that you already have a tool for determining investment expenses and the returns they generate. The simple calculation chart provided with the SSQA program includes a cost trend graph. A Paperwork Reduction Guide and other tools are also provided with the SSQA program.

 

It is the aim of Global Coalition for Sustained Excellence in Food & Health Protection (GCSE-FHP)  to provide these kinds of assistance and drive initiatives that are beneficial to the food and health industry.  Membership in the Coalition is free and open to anyone and any organization.
 You may JOIN the coalition and participate in its voluntary projects and programs.

Product Safety, Security and Quality Assurance – 2013 Toronto Conference

View Conference Details

Why should you pre-register?
It will help us to know the approximate number of interested participants. It will also help us to contact you directly as soon as the formal registration starts. In return you secure your place at the lowest early registration fee through this free pre-registration.
The early registration fee for individuals is only CDN $300 for the 2 days ($150.0 per day) or CDN$200 if you plan to attend only one day. Lunch is included with these rates.

Discounts:

Your will receive a 10% discount for each participant if 5 or more people attend from your company. You may also qualify to receive a 10% discount for your registration if you invite 5 or more others to attend at the regular rate and they indicate that you invited them. It is your responsibility to ensure that your invitees indicate to us that you invited them. There is an additional 10% discount (for a possible total of 20% discount) for members of GCSE-Food & Health Protection.

Discount offers cannot be combined with any other offer except as specified by GCSE-Food & Health Protection.

Discounts only apply to registrations that are for the full 2-day conference.
So hurry! Space is filling up. Pre-register  today to take advantage of these discount offers. 

Losses Incurred Due to Inadequate Corporate Purchasing Programs and Practices

Good purchasing personnel are tremendous at negotiating prices but one can reasonably assert that they may not always be aware of other hidden costs in what they do. These costs insidiously erode the gains from hard-fought negotiated prices. Let's take a quick look at some of these hidden costs.

There are many losses and unrecoverable costs due to ineffective supplier assessment and approval. 

A large number of organizations have implemented supplier approvals but without adequate attention to the reality of “garbage –in-garbage-out”. Consequently, they do a very poor job of approving their suppliers. Permit me to restate the positive alternative to the understanding of “garbage-in-garbage-out”. Properly selected suppliers deliver safer and higher quality input materials consistently. This is essential in the delivery of safe and quality products to consumers.

TIME & RESOURCE WASTE:

There is usually a collaborative effort between the QA and purchasing departments in the supplier approval process. Even where the need is understood and such collaboration is established, many implemented supplier approval procedures woefully lack proper direction. After several years of auditing, I have found that proper supplier assessment techniques and assessment criteria are not used by many operations. Never mind the time and resources wasted in some redundant “supplier approval” activities. 

In response to or preparation for external audits, particularly the certification varieties, useless supplier approval update activities are common. Many operations request and receive documents from suppliers without ever really looking at these documents. Quality system managers fail to conduct proper and thorough follow up actions in response to supplied material failures because, "after all, the affected suppliers have certificates from reputable third party audits".  

As a specific example, what is the real value of requesting the suppliers’ allergen declaration document and simply placing this on file because “this is an audit requirement”? Copies of third party audit certificates are also requested from suppliers. To what end and how these are actually used remain an enigma. Countless purchasing and QA departments rest satisfied simply because their prospective suppliers have third party audit certificates. I can understand requesting the actual audit results because these contain more information than the plain certificates. At the same time, these audit reports often state that they are snap shots and do not represent or guarantee the continuing good performance of the audited parties. How much then, should purchasing personnel rely on these audit reports for their decisions to continue buying from the suppliers? Should these even be dependable criteria for purchasing decision making? In some organizations, little to no attention is given to other pertinent supplier assessment and monitoring criteria and activities simply because the suppliers submitted their third party certificates.

The supplier approval programs of several companies sadly constitute no more than waste bins for valuable resources. Purchasing and QA personnel are forced to spend valuable time in conducting activities that contribute absolutely nothing to preventing unacceptable materials from coming into their operations. The realities faced everyday are rarely examined and adequately addressed in the development of many supplier approval programs. I have reviewed many supplier approval programs that are no more than window-dressing schemes to impress third party auditors. They are often fanciful but ineffective. Some are not even so fanciful but ineffective all the same.

Purchasing and QA personnel also need to be aware that unrecoverable losses can be attributed to bad corporate purchasing programs and practices. Just to name a few: The time and money wasted in quality control (fire-fighting) activities due to bad materials purchased from bad suppliers; the time and money wasted due to recall events resulting from bad materials or products purchased from bad suppliers. In spite of the transferable blame, distribution outlets (wholesale, retail sale, food service, restaurants, etc.) suffer tainted reputations that drive customers away.

Summary: 

Suppliers: If you need paper certificates to prove to your customers that you are doing everything right, you are very likely not doing everything right.

Customers: If you rely on paper certificates from your suppliers as proof that they are doing everything right, you are very likely not looking at the right metrics. 

A robust supplier approval and monitoring program that looks beyond mere paperwork or third party audit requirements is essential for every operation. Obtaining the copy of a third party audit certificate is never sufficient. Even obtaining copies of third party audit reports is not sufficient. Holistic programs based on concepts like SSQA are essential. The SSQA Concept focuses on reality. The supplied products and/or services and the historical consistency of meeting desired safety and quality requirements form the primary bases for assessing the success of implemented control measures and programs.

All redundant elements need to be eliminated from the supplier approval process. Resources must be effectively directed and applied. Necessary and proper collaborative arrangements must be established and maintained. Properly designed and implemented supplier approval programs provide huge benefits to all, and I mean ALL stakeholders (purchasing and QA personnel, business operators, suppliers, customers, consumers, public health personnel, third party auditors, regulators – the world).

Posted By Felix Amiri

____________________________________

Felix Amiri is the current Food Sector Chair of GCSE-Food & Health Protection