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Achieving Compliance To Foreign Supplier Verification Program (FSVP)

Back in 2011 when U. S FDA's FSMA act (Food Safety Modernization Act) was signed into a law, it was a termed as a sweeping reform in the food safety laws as the focus totally shifted from 'Reaction' to 'Prevention'. There were seven rules under this act. One of them was titled FSVP - Foreign Supplier Verification Programs. It was touted as a very bold rule aiming to do a number of things which were never attempted before with respect to the food safety norms in the US.  As expected these norms resulted in a slew of initiatives from food retailers across USA to get compliant with the rules.

I was fortunate to be a part of one such initiative undertaken by one of our clients -  The second largest retail chain in USA. They were beginning their journey towards establishing a formal and a complete Supplier Compliance Management capability and we were chosen as their partners in this journey. In this blog I will attempt to describe our journey so far, the challenges we faced and our learnings from the same.

The bases for building a robust Supplier Compliance Management capability is to establish a Supplier Information Management system. We started off with this in mind and took the first step of implementing a Supplier Management system based on Oracle Supplier Data Hub and Supplier Lifecycle Management.  The plan was to do the following

a. Identify the set of suppliers impacted by the FSVP
b. Gather supplier data from legacy system & standardize the same with the help of Oracle Enterprise Data Quality (EDQ)
c. Design your Compliance Management processes
d. Convert the suppliers identified.
e. Monitor the progress of compliance information entered by suppliers.
f. Solicit feedback and refine the process.

Identify Suppliers
Getting a clean set of data in your supplier management system is the first step. If you have a huge supplier base (like our client had) the best thing is to prioritize and choose a subset of suppliers who need to be in the system first. We concentrated on getting in those suppliers in Supplier Hub who were affected by the compliance program (FSVP). Even before we began the project the process of identifying the first set of suppliers to be migrated had started. Starting early on data related aspects helps in identifying potential issues with your supplier data and gives you enough time in taking corrective actions. More often than not it leads to continuous interactions with your suppliers which is usually time consuming.

Extract Supplier Data & Standardize
The common challenge which we face during extraction is the amount of information to be ported to the new system. We addressed this by conducting enough show and tell sessions with the client in the early stages of the project and clearly indicating the bare minimum information required to create a supplier record in the new supplier management system. Apart from this we also gave the confidence to the client that the remaining information pertaining to the supplier lying in their legacy systems can be converted on an incremental basis with the same conversion programs used in update mode. After extraction the next step is to standardize and cleanse the data. In order to standardize and cleanse the data we had the option of utilizing the Oracle Enterprise Data Quality. It is a rule based tool which can standardize and de-duplicate your data based on the rules you configure before you load the same in supplier hub. This is a very crucial step as the supplier management system is as good as the quality of data in the system. The repercussions of having bad data in a system ranges from improper reporting to employees losing faith in the system and ultimately abandoning the same.

Designing The Process
This involves deciding on ways to seek compliance information from supplier. For example, do you want to send an assessment survey electronically asking suppliers to respond or do you want to give your suppliers access to maintain their profile and weave in additional attributes in the profile which captures compliance related information.  We decided that it is best left to the suppliers themselves to update their compliance information. Moreover, the assessment functionality available in the Oracle SLM had a few limitations too.

Most of the supplier compliance information had to be collected at the facility/site level. We designed a page-wise UDA structure with the initial page containing the qualifying questions which would enable us to determine which compliance information should we ask suppliers to fill up. Accordingly, our supplier reference guides had directions for the suppliers to take them appropriate pages. This would also help in the future compliance processes like Social Compliance for which we can have a separate UDA page to capture the compliance information.

Design Compliance Approval Process
Since there wasn't much available out of the box to support approval process for the compliance information entered by supplier we designed an approval process based on a couple of reports and the UDA security features. There were a couple of attributes defined for the approval process both at the facility/site level and at the supplier level. Based on the various statuses for these attributes a scheduled report was designed to send out the list of suppliers and facilities/sites to be reviewed by the internal teams.

Supplier Data Conversion
This was perhaps a very straight forward step for us in the project. Our intention was getting into the supplier hub just the bare minimum information required pertaining to supplier, site and the contact. We only had one supplier site per supplier which further made the whole process easier. The only tricky part was to make sure that we had a scalable and flexible technical design for the conversion routine so that it can handle updates to already converted supplier records as well as handle larger volumes (to the tune of 40 K supplier records).  We also had the supplier contact conversion process separated out from the rest of the conversion process so that we can convert the contacts in the end as it would send out an email to all the contacts with the login details of the supplier hub.

Monitor Progress & Solicit Feedback
In order to facilitate the progress monitoring for the whole compliance process we resorted to the custom reports. The report design was done in such a way in one glimpse it provides all the requisite numbers like the number of suppliers yet to respond, the number of supplier facilities/sites which are in the approval process and with which team. This kind of information helps an organization in determining where to channel more efforts and accordingly devote more resources towards the same.

  The above mentioned steps towards achieving compliance to the recent food safety norms is the beginning of a continuous journey of establishing a robust compliance management program which will take the organization towards higher levels of maturity in Supplier Relationship Management.

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