Food and Beverage (F&B) enterprises have most of the same auditing requirements of other large consumer product goods (CPG) corporations, plus those unique to the industry—a highly regulated one with strict food safety compliance mandates worldwide. Even when food safety standards aren’t mandated, failure to meet industry standards can make it difficult for enterprises to find partners willing to do business with them.
Multinational enterprises have the additional challenge of complying with different laws in every country in which they operate. You could have 1,000 facilities across 200 countries; the complexities around regulations in each of those countries add to what needs to be looked at from an audit perspective.
All this makes it very difficult for global F&B enterprise audit teams to find and report on issues at a local level if they do not understand the requirements. That, in turn, limits teams in their ability to identify local issues before they become serious problems. It also means that senior leaders in F&B enterprises often don’t have all the data they need to make vital risk management decisions.
Successful audits require resources and planning
Successful enterprises must put significant resources into planning audit programs at different levels of the organization. They need to understand the requirements of all the countries they’re operating in and the compliance standards for each one. In addition, they need to understand their supply chains and the risks involved throughout.
Enterprise organizations also need to consider the various types of audits they perform. At a minimum, most enterprises conduct:
- Internal corporate audits
- Internal self-assessments to determine whether an enterprise or unit is in compliance with regulatory standards and/or company requirements
- Supply chain audits for managing the supplier authorization process
- Market or retail audits/assessments
Each of these audits has its purpose, process, and desired outcomes. And each one needs to be resourced appropriately.
Real-time audit results can help enterprises identify and overcome potential problems before they become critical, but not all enterprises have audit resources that can deliver them. Many enterprises are still performing audit processes mainly using manual approaches. Extracting and analyzing data collected this way is laborious and time consuming.
Many enterprises conduct audits at regional or business unit levels. By their very nature, these often aren’t scalable. Since audits may subtly differ from region to region or between business units, they don’t provide C-level executives the kind of cross-enterprise insights they need.
A global corporation can easily have as many as 200 auditors working in an audit program—some internal and others contracted externally. With that many auditors involved, there may be differing approaches to interpreting situations. That can lead to inconsistencies in how findings are reported across an organization.
Different languages and cultural customs also can be a factor for multinational companies. Enterprise audit planners need to understand the specific skill sets of each team member. This can include their overall experience level, experience with specific kinds of audits, and expertise within the F&B industry.
For example, you might have an auditor certified to perform ISO 9000 system audits. You assign them to audit a specific Food Safety category, such as a manufacturer of biscuits. In this case, they will need specific biscuit-manufacturing process knowledge. Without that specific process knowledge, chances are they won’t be able to identify potential risks. After all, they don’t know what they’re looking at.
Then there are human factors, such as individual workloads. Do your auditors have the capacity to perform all the audits you’re requiring of them? Have you considered holidays, vacations and, potentially, conflicting assignments, and have you built all of this into the planning process?
All these factors impact the ability of audit teams to do their work efficiently and effectively, as well as the ability of team leaders to successfully plan and manage audits.
Audit teams need the right resources
Enterprise leaders want to improve their audit platforms but face competing priorities. Responsibility for audit programs is often delegated to non-revenue-generating units like QA or Food Safety. However, revenue-generating functions generally get funding priority within an organization. QA and Food Safety don’t get the big investment. Until something fails, there’s no incentive to change this pattern.
But failure to improve audit capability is a mistake. It’s well known that a single recall can cost a company $10 to $30 million. These direct and indirect costs from recalls should be added to the cost-benefit calculations enterprise executives make when allocating funding to improve audit resources.
Plus, it’s important to note that these direct and indirect costs are separate from the immediate damage a recall can inflict on an enterprise’s share price, not to mention the long-term reputational damage to a brand.
Particularly in F&B, audits should be unified with other Quality processes. Integration with functions like supply chain management, risk management, non-conformance, and change management processes is required to drive real overall performance.
That’s easier said than done. Without coordinated audit platforms, audits may not deliver the results enterprises need. Add to that under-resourced audit teams doing much of their work manually, and it becomes hard for them to extract high-level data for reporting and trending that provides actionable C-level insights.
Further, with global business units or functions performing audits in their own regions, senior leadership doesn’t get data that can be compared consistently at the enterprise level. How do you look at these separate audit programs and actually get common data? You can’t compare apples to apples when you have an apple, a pear, and a banana.
Too often, F&B leaders end up with disparate data and information that doesn’t provide critical insights without a lot of manual rework and correlating. That limits their ability to accurately assess risk profiles and understand where to direct resources.
Manual auditing processes are inefficient. One of the problems is duplicative efforts, as audit teams re-enter information into disparate applications. This can result in the most useful data not being identified because connecting information sources and trends isn’t possible or effective. An enterprise’s C-Suite doesn’t get the real-time results it needs and can be living with a false sense of security, believing everything in the business is okay when it’s not.
Without the ability to get good data sources from manual systems, organizations can’t fully understand their risk profile and mitigation activities. This results in audit programs remaining static year in and year out, never developing and maturing.
Outdated attempts to digitize workflows
Some companies have attempted to automate—or at least digitize—their audit processes. But the tendency has been to connect platforms in an ad hoc manner.
For example, an organization will purchase a platform for document management (for example, management of QA and Food Safety programs and documentation). The platform does that because that’s what it was designed for. But it doesn’t work well for managing external suppliers.
So the company buys another platform to supplement the first one. Then it must add yet another application for managing enterprise risk. These may or may not link with the companies’ enterprise resource planning (ERP) systems, leading to additional manual updating of the ERP system and requiring allocation of even more resources.
None of these should be standalone processes. These platforms need to link up with your conformance programs, your change management programs, and your supply authorization.
From an auditor’s perspective, the result is the enterprise’s data becomes trapped in silos. Auditors can’t pierce the tangled software to connect and identify potential problems. Critical information may not get shared with risk management, QA, or food safety units that need real-time results and information.
Some companies have custom automated audit platforms. Many are 10 to 15 years old and typically have been updated with a series of modifications and patches. Most were not fully digitized to begin with and still require a lot of work to administer.
On many custom platforms, for example, scheduling is done using Excel spreadsheets. Others rely on SharePoint or Word as data repositories with limited workflows. These “Frankenstein” systems require daily administration for basic things like checklists and follow-ups.
The lack of integration between systems makes it time consuming to pull everything together manually to produce audit reports or dashboards for a performance view of the audit program’s effectiveness. If you want to do any data evaluation or analysis, you need to extract all the information, then have someone look at it, get it into a usable format, and put it in a dashboard. This is a cumbersome process.
The bottom line: It’s not true digitization.
Some enterprises have opted for economical solutions to fix immediate needs. These may initially have been lower-priced, but they’re not enterprise solutions. They can’t scale to support digital transformation and growth of the business.
Benefits to switching to modern systems
There are clear drawbacks to sticking with these ad hoc and outdated legacy systems. There also are clear benefits to switching to new, unified digital solutions for managing audit programs.
Modern digital platforms reduce the time spent on non-value-adding repetitive and tedious audit tasks, particularly data entry. Audit planning and scheduling is done in the same platform, making it easier to manage resources effectively.
Digital platforms automate workflows, notifying all parties involved in the process, from audit team to auditee, and eliminating the need to track even more email threads during the audit process.
Automated audit checklists allow for easy capture of data, scoring, and reporting. This
eliminates the need to recapture daily data from audits on different platforms. It also supports real-time monitoring, providing senior leaders holistic views of organizational risk and enabling scaling of the audit program as more audit types are required.
Digital platforms also make it more efficient for enterprises to manage remote audit programs, like those required during the COVID-19 pandemic. Enterprises that adopt them now will be better prepared for future disruptions which could once again require them to manage hybrid (onsite or remote) audit programs.
What to look for in an audit solution
Here are key considerations to keep in mind when sourcing an automated audit solution.
Audit scheduling and planning
Does the platform you’re considering allow you to run all the types of audits and related programs you need? It should allow for medium- and long-term audit planning and scheduling. It should also integrate risk management into the scheduling process to make determinations such as:
- How many facilities need to be audited?
- Where are they located?
- How often do they need to be audited?
The platform should allow for planning different types of audits, including corporate audits (e.g., Quality, Safety, and Environment), facility self-assessments, and enterprise operations that need short-term audits and/or frequent inspections, like quick-serve restaurants or retail.
In addition, the platform should allow for supply chain audits, such as supplier authorization audits and assessments. And it should capture reports from third-party audits for further action.
Resourcing
A platform should help audit team leaders determine in advance the level of resourcing needed for an audit.
Does it have tools that allow users to select facilities and locations from prepopulated drop-down lists? Can users easily match qualified auditors to locations?
Does the platform allow senior leaders to manage their internal audit team’s capabilities? Does it help determine if auditors have the qualifications, skills, and experience to complete an assigned audit successfully?
Do audit team members have the right process knowledge and certifications? Are they familiar with local languages and processes? Does the platform show the capabilities of contracted outside auditors who have been added to the team?
As leaders build their audit teams capabilities over time, they’ll want to add training to ensure their internal teams have the right, up-to-date skills. An integrated platform should be able to help build and support those training programs.
Execution
If an enterprise is going to invest in an automated audit solution, it should help auditors in the field work more efficiently. When evaluating a new platform, audit leaders should ask:
- Does it have drop-down standardized protocols for each audit type?
- Does it have automated reporting from checklists?
- Can users link existing documents to questions in the checklist?
- Does it allow for customized scores of those checklists?
- Can it generate non-conformance notices for quick action?
Not every facility has access to the internet in the manufacturing environment. Given that reality, does the platform allow auditors to work offline on tablets? Can those tablets be used to take pictures?
Comprehensive reporting
The goal of audits, of course, is to identify potential issues before they become critical risks. Enterprises can’t afford to wait days or weeks for information on mission-critical problems to slowly bubble up to the executive suite.
So automated audit platforms need to have specific reporting capabilities. If an auditor finds a critical risk, can the platform locate the right stakeholders in real time?
Does the platform allow users to gather, analyze, and find trends in data that identify risks and provide a holistic enterprise risk assessment? Can users incorporate audit information into the management review process, all integrated in one platform?
The right platform for auditors
Veeva’s purpose-built solutions for the F&B industry can help. We offer a complete set of digital auditing tools to assess compliance of your own facilities and those of your suppliers to food safety and quality standards. Our solutions help field auditors work more efficiently and file timely reports. Empower your audit team leaders to better plan, schedule, and execute audits. And Veeva’s integrated solutions provide F&B enterprise leaders with real-time insights that lead to action and accelerate innovation.
Contact us, and let’s explore how we can help you achieve your auditing goals.
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