Report: Food adulteration from a sustainable supply chain perspective.
Food and product safety has always been a critical aspect of the discourse on socially responsible and ethical practices. This is so mainly due to the fact that food adulteration poses a serious threat to consumers, ranging from relatively harmless to fatal. In order to reduce or remove such effects, this report conducted an analysis of the key challenges and issues involved in the compliance with respective standards and suggests the implementation of a sustainable supply chain for the company. The findings of this report mention 5 steps for the development of long term sustainable supply chain, along with considerations for better and more ethical decision making. The 5 step approach includes analysing the inter-processes to map risks, identifying supply chain, making sustainable development a part of organizational strategy and adopting suitable measurement tools along with identification of initiatives to get internal and external stakeholders involved.
Food and product safety has always been a critical aspect of the discourse on socially responsible and ethical practices. This is so mainly due to the fact that food adulteration poses a serious threat to consumers, ranging from relatively harmless to fatal. Saak (2019) describes food adulteration as a broad category which encompasses activities like misrepresentation and mishandling of food items. Moreover, in common use, adulterated food includes which is, or at least in part, is fraudulent. This can also include either unintentional or intentional mislabelling of food. This paper defines food adulteration as the deliberate placement of food items in the market for financial gain by deceiving customers. While some companies engage in such unethical and irresponsible practices to cut corners and to increase profitability, others end up adulterating food because of lax regulations and standards. Bansal, Singh, Mangal and Kumar (2017) claimed that food adulteration costs around $49 billion to the world economy, along with serious risks for human consumption. Since food adulteration can take place at any given stage along the global value chain; it is an especially important issue for distributers, supply chain executives and retailers. Such concerns have resulted in innovative and responsible practices in supply chain management; one of such practice is of the sustainable supply chain. Nowadays, more and more corporations are pledging to work with suppliers in order to adhere to environmental and social standards. Usually, such corporations expect their 1st-tier suppliers to comply with such standards and in turn to ask their suppliers for compliance. This results in a chain of relationship in which every buyer ensures that their supplier is adhering to an appropriate standard. The underlying aim of this approach is to create a cascade of ethical, responsible and sustainable practices that smoothly flow throughout the supply chain. Even though it is an admirable idea, it has been quite difficult to apply it in practice, especially in the food industry, with its lack of traceability, inclement weather, inadequate communication among parties (Cohen 2019).
This report presents an analysis of food adulteration from a sustainable supply chain perspective. In addition to this, the report also discusses the issue and challenges associated with food safety and integrity, and suggest their implications for the company. The report concludes with a set of recommendations which can be implemented by the company to ensure more socially responsible and ethical practices.
Pillai and Chakraborty (2017) stated that food adulteration globally occurs in many facets and affects almost every food item. It not only presents a severe economic problem but also leads to significant health problems for customers. Adulteration of food is a common problem which is normally seen in both middle and low-income economies, and sometimes in developed countries. The problem has a greater impact in low-economic zones such as India, Bangladesh, African countries, Indonesia and Vietnam. Kumar, Kharya and Jain (2019) mentioned that consumers are helpless in front of unscrupulous practices of wholesalers, importers, retailers and producers, simply to improve their financial viability with less investment.
Hazardous chemicals like sodium cyclamate, formalin, calcium carbide and cyanide are commonly used in the food industry to ripen green tropical fruits, for preserving them and to keep them fresh until sale (Saak 2019). In addition to this, low-cost textile dyes are used to colour popular sweetmeats, beverages, vegetables, confectioneries and fruits to attract customers. Fishmongers, on the other hand, use formalin to preserve fishes and to cover up internal decomposition and to keep the body solid. (Schieber 2018) mentioned that intake of such chemically treated food items can have direct consequences on the health of consumers such as liver and kidney failure, cancer, metabolic dysfunction and autism.
In addition to this, there are huge numbers of likely substances that can be used in adulteration of food, and the list is continually expanding. Pardeshi (2019) claimed that adulterants are commonly selected on their capability to enhance the apparent value of a given food product, their capability to mask certain substances or to substitute for more costly products or ingredients. Frequently occurring cases of food frauds illustrate the prevalence of food adulteration in the food industry. For instance, in 2008, Chinese mild scandal broke out which included adulteration of milk and infant formula and other food items being adulterated with melamine. According to Cavin, Cottenet, Blacpain, Bessaire, Frank and Zbinden (2016), more than 300,000 individuals became a victim in China, along with the death of 6 babies from kidney damage and more than 54,000 babies were admitted into the hospital. Another incident occurred in 2013, in which horsemeat was found in ready meals and burgers sold in supermarkets across the UK.
Even though there was no physical harm, those who thought that they were eating beef were not so happy. The result of this incident was a 300 million pound drop in the market value of supermarkets selling the adulterated product and increased awareness regarding the vulnerability of the food supply chain. Statistics in 2013 revealed that even though the total amount of Manuka honey is harvested in New Zealand was around 1,700 tonnes, the global sales were more than 10,000 tonnes. This also indicates a prevalent deceitful selling of normal honey as the Manuka version.
In a more recent case, 19 out of 78 samples of dried oregano purchased in Irish and UK supermarkets were found to include additives like myrtle leaves and olive at high levels. One should not view these incidents as isolated events but as a common weakness in the global supply chain of the food industry which allows individuals to engage in such harmful and socially irresponsible practices for financial gain. Nowadays, the increasingly fragmented and complex supply chains in the food industry have resulted in a steep increase in the adulteration of food. In addition to this, food companies also have to deal with certain issues and challenges associated with food safety and integrity.
Safety in terms of food supplies has become a matter of global concern and despite the increasing awareness of policymakers, and introduction of new technologies, compliance and monitoring tools, King, Cole, Farber, Eisenbrand, Zabaras, Fox and Hill (2017) mentioned that reports regarding foodborne illnesses are constantly rising. This is also a significant problem considering that safe food supplies support industries, reinforces sustainable development and contributes to nutrition and food security. The increasing level of urbanisation and changing habits of customers has resulted in increased demand for food items which is also contributing to increasing food wastage and encourages produces to engage in immoral practices to increase production. Better quality standards for food safety can help to reduce food waste through a more efficient supply chain.
The food industry takes a much wider view of food safety and includes a host of factors such as safety, nutrition, quality and value. Safety includes setting microbiological and toxicological hazards and introducing practices and procedures to ensure compliance with standards. Nutrition involves maintaining a certain level of nutrient level in formulating foods and food ingredients with nutritional profiles which contributes to healthy diets. Quality refers to the overall sensory characteristics such as palatability, taste, appearance and aroma, while the value is the economic advantage and utility consumers receive by consuming the product. These 4 are the key aims of the food industry in respect of food safety and integrity.
In the EU, the food industry is one of the biggest and most important manufacturing sectors, only surpassed by the metal manufacturing industry. Godefroy and Clarke (2016) mentioned that more than 70% of the total produce is transformed into products by the food industry. For the last 25 years, the prominence of issues regarding food safety has led to the establishment of several national food safety agencies and the legislative framework to enforce such standards. A series of ever-changing "challenges and risks" are meant to be addressed by such standards, some of these challenges include frequent changes in the production and supply of food products, including the increased quantity of imported food. In addition to this, changes in the overall environment are also leasing to contamination of food items and the emergence of new bacteria, antibiotic resistance and toxins. Moreover, the changing habits and preferences of customers also present a challenge to food safety, along with the changes in the tests which diagnose foodborne illness.
However, one of the key challenges is of forming an efficient and effective supply chain which provides transparency and accountability for compliance with standards. This compromises the integrity of the food industry supply chain. Some of the key risks with the supply chain in the food industry are as follows.
Because of continuous pressure on supply costs, most companies are more often not forced to use further afield for sourcing, often opt for global channels. This increases the risk associated with the supply chain and compromises the ability of the company to comply with appropriate standards.
Companies manage their suppliers through contractual arrangements
Rather than formal monitoring, companies rely on contractual arrangements for the supply chain management. The increasing reliance on contractual arrangements places the burden of supply chain management on the suppliers and therefore, any liability or risk lies with the supplier itself. However, this is not adequate to eliminate the risk to the manufacturer. Furthermore, as suppliers are not as closely linked with the customer, a more formal approach for monitoring of second and third their suppliers and subcontractors is required to ascertain the risk associated with product integrity.
Roberts (2018) suggested that consumers are no longer simply looking for something to fuel their body, they are better informed about their food choices and the way they affect their body. Considering the need to provide for the diverse preferences and dietary requirements of customers, there is an increasing pressure on companies to provide information regarding the origin of ingredients, allergens and nutritional information.
Also, the supply chains of food companies use brokers and agents to source their raw material, who can procure such material form basically anywhere. This risks losing control over the relationships among suppliers. Normally, companies do not exactly know their indirect suppliers as it takes a significant investment in terms of time and money to increase the knowledge of the origin of the product.
A recent by Chaoniruthisai, Punnakitikashem and Rajchamaha (2018) revealed that most of the food companies only monitor their first and second-tier suppliers rather than conducting a deeper analysis of their respective supply chain. Ensuring compliance with industry standards at every level of the supply chain is also a significant challenge for companies.
Since TrueSource operates in the food industry, the abovementioned challenges and food safety considerations have significant implication on its operations. Moreover, the company has a vast network of suppliers and buyers which further complicates the process. In addition to this, the company adheres to sustainable approaches to ensure customer confidence, in this respect the company has to deal with additional challenges for its procurement and supply chain operations.
First of all, the company has to ensure management of services and raw materials for suppliers, then to customers, with greater emphasis on the improvement of environmental and social impacts of the procurement and distribution activities. Also, the company needs to take into consideration the diverse interactions among customers and suppliers. Govindan (2018) suggested that companies engaging in sustainable supply chain practices should focus as far as they can on possible upstream in the direction of raw materials, downwards towards the customers and back again as food products and their waste is recycled. Authors further mentioned that in traditional practices supply mangers used to provide necessary inputs at the most cost-effective level. However, as customers and executives move to differentiate social cost from market prices, supply chain management began to redefine and expand their role through the management of both external and internal costs.
TrueSource can foster better sustainability standards by making sure that its suppliers are incorporating sustainable innovations in processes and operations. Moreover, the company can also investigate the technologies and processes which reduce dependency on potentially expensive and scare resources.
The company needs to devise a sustainable strategy to define the values it wants to emphasize and to declare the way it will enforce such values. Such a strategy should also include the consequences in case the employees and suppliers do not meet the said guidelines. By making such values and guidelines explicit company can improve its performance and accountability standards.
It is also recommended that the company should retool its organization. This is so, as Dania, Xing and Amer (2016) more than half of the organizations assess supply chain management against some sort of sustainability standards. With the increasing role of sustainability in TrueSource’s supply chain, the company needs to draft specific procedures and guidelines, develop programs for training and to introduce sourcing tools which support sustainability goals by equipping buyers.
In addition to this, managing supplier relations is also important along with the implementation of a sustainable supply chain according to the environmental, economic and social impact of its goods along the company’s supply chain. Emamisaleh and Rahmani (2017) explored the current practices in sustainable supply chain management and suggested that even though companies might differ in their deliverables and stages in the supply chain, there are certain consistent themes which can be adopted by other companies to drive progress. The author suggests the following steps to develop and implement an effective sustainable supply chain policy.
Step 1: Analysing the inter-processes to map risks
TrueSource needs to recognize its business processes to recognize and understand issues within the company prior to working with other entities involved in the supply chain. This will help to ensure that the underlying issues are effectively managed. Such issues are mainly classified into 3 categories, namely, product development and stewardship, internal operations and procurement. All of these categories are further divided into subcategories:
Step 2: Identify supply chain
The second step entails that TrueSource should identify what the supply chain means for the company and at which stage does it fits within other supply chains. This can be difficult TrueSource as it has a complex supply chain, thus, it should appoint a manager with overall accountability and responsibility for procurement. TrueSource might not have adequate resources for a dedicated manager for supply chain, however, it can give the responsibility to an organizational member to identify supply base, customer’s relationship and to position the company with the said framework (Bloemhof and Soysal 2017).
Step 3: Make sustainable development a part of organizational strategy
Key performance indicators (KPIs) are useful to monitor and measure both qualitative and quantitative performance, such as on-time deliveries, cost reduction, waste management and staff satisfaction (Prasad, Pradhan, Gaurav, Chatterjee, Kaur, Dah and Nayak 2018). Companies like Shell have appointed a special sustainable development manager for better development and monitoring of KPIs for the company
Step 4: Adopting suitable measurement tools
This step involves communications materials and writing policies, purchasing guidelines and prequalification of supplies by using the environmental, social and economic criteria. For long term sustainable development strategies, TrueSource needs to achieve regulatory compliance and adopting suitable measurement tools will facilitate the process.
Step 5: Identification of initiatives to get internal and external stakeholders involved
Such initiatives can range from energy efficiency to zero waster policy. This is important as even though sustainable initiatives are driven from the top, they cannot succeed without the involvement of various entities involved in the process. Therefore, TrueSource needs to include sustainable development criteria for suppliers by setting a supplier code of conduct. Initially, the company can start with a handful of suppliers and simple principles (Bloemhof and Soysal 2017). The company can also affect customers to reward sustainable suppliers.
In addition to the abovementioned steps the company also needs to engage in ethical decision making to ensure organizational integrity which includes doing the right thing by recognizing the ethical issues, collecting data and evaluating the available course of actions. Moreover, it needs also needs to act and reflect on the outcome to ensure that navigate the ethical dilemmas commonly raised by motivations such as reducing cost and delivering expensive products at cheap prices.
In conclusion, the report suggests that developing a sustainable supply chain can not only help TrueSource to contribute to the protection of the environment, but also to increase the safety of its products. By paying attention to social, environmental and economic needs of society, the company will be able to gain competitive advantage and will be able to balance the needs of external and internal pressures. Moreover, the report mentions 5 steps which can be undertaken by the company for the development of sustainable supply chain and considerations for more ethical decision making.
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