For decades the CPG industry has been struggling to find the most effective way to systemically ensure product safety and compliance. With the devastating issues experienced in previous years it has never been more important to reduce risk to consumer safety. To complicate matters, with industry globalization, supply chains have become very complex making the challenge even greater.

In previous eras, companies believed that proprietary approaches and individually executed audits were the most effective approach. The food industry then began to experiment with third-party audits, which grew significantly and contributed to the convergence of standards in some areas.

Now there are new questions being asked: Is product safety a competitive issue? Is there a way to align behind a common set of standards throughout the industry to provide focused and superior compliance? Will this raise the bar in the industry? Can a standard be created that applies across categories?

Recently, there has been significant time and energy being applied to what many believe to be redundant audits. “Corporately, on average we host 25 to 30 audits per year,” says Lisa Bryson, vice president of quality/regulatory affairs for Marietta Corp., Cortland, N.Y. “The overlap in material that is covered is over 95 percent. The customer is allowed only ‘x’ time; thus, it becomes a ‘box-checking’ exercise. The days are spent sitting in the board room — one auditor from the customer and a small army for the supplier — talking about the area of expertise. Not a lot of value on either side of the table. The customer leaves with their boxes checked. Rarely does either party come away with the idea that something was learned.”

If the time and energy spent on the audit function today could be applied to product-specific requirements or higher-value activities, all industry participants would benefit. The Global Food Safety Initiative (GFSI) has certainly helped further the initiative as it has bridged challenges to unite Europe and North America. It also has united brand owners and retailers behind the GFSI-approved HACCP food-safety systems certification scheme. While this addresses food categories, there is not currently a counterpart for non-food products.

Now, for the first time, leading companies spanning all CPG categories have aligned, indicating to the industry that product safety is not competitive. Industry leaders believe they can create a common standard across categories. Such a standard will significantly improve compliance and freed resources can be used to focus on other quality assurance activities that will deliver significantly more value to both the brand owner and the supplier.

Though cost savings is not the primary goal, initial analysis indicates the impacts are significant. Minneapolis-based Cargill Inc. has completed a study based on the company’s average cost per audit ($7,700) and average number of audits per year (3) yielding a $6.5 billion per year industry savings simply by eliminating redundant audits.

Industry suppliers agree that this is a needed systemic improvement. Paula Coxe, vice president of quality at Diversapack of California, Chino, Calif., concurs: “We believe we can save time and enable resources to focus on how we can be a better company and offer higher-quality products. It benefits the customers and suppliers. It will also enable brand owners to judge contract manufacturers uniformly.”

Bryson agrees, “With intensive audits we always learn something. Sometimes it’s painful — it’s a deep dive, it’s very intensive. Because we are focused on continuous improvement, we welcome these observations.”

Later this year, a team comprising leading CPG companies will be meeting to discuss the current standards to evaluate the possibility of their application as a cross-category industry standard. These will include not only a broad selection of standards widely used in global markets today, but may also include standards that, up to this point, have been proprietary internal standards, for example Procter & Gamble’s QAC program.

Editor’s note: Keep an eye on “Raising the Bar” as we continue to update the latest industry developments in best practices and standards.