Developing compliance by design and implementing a master plan.

Editor's note:

Through NEHA's long-standing and excellent relationship with NSF International, NEHA was granted permission by NSF International to share with the Journal's readership various papers that were presented November 16-18, 1998, at the "First NSF International Conference on Food Safety" in Albuquerque, New Mexico. This paper, "Developing Compliance by Design and Implementing a Master Plan," is one of them.

It is important to note that these papers were screened by an NSF International/Conference for Food Protection advisory committee prior to their presentation at the conference, but they have not been peer reviewed by NEHA's Journal program for technical accuracy.

Because these papers contain useful and interesting ideas and information that may be either delayed or lost if sent through the Journal's normal peer review process, NEHA has decided to publish them as presented, with only minor editorial modifications.

We hope you look forward to more of these papers in future issues of the Journal!

Introduction

A primary mission of the food and dairy industry is to deliver clean, safe, convenient, and attractive food products and to make them available across the globe. The ISO 9000 program, founded by the International Organization of Scientists, offers businesses an opportunity to design production processes appropriate to that mission. ISO 9000 certification, which is recognized in 119 countries, is mandatory in many of those countries; other countries use the program to control the quality of imports. Master planning can be employed as a means of designing, developing, and implementing the program.

Compliance by design focuses first on identifying goals and meeting objectives. Master planning develops the mode for reaching those goals and objectives. A master plan is a conceptual design for long-term development. It serves as a guide for the evolution of a facility, and it is the foundation upon which efficient, versatile facilities are built. Yet a master plan is not a rigid, unchanging scheme. Basically, a master plan says, "Until circumstances change, this is what we're going to do." As circumstances change, so too must the master plan (Clement and Surfus, 1996).

Defined in this way, a master plan is well suited to implementing guidelines and establishing a foundation for an ISO 9000 program.

The purpose of a master plan is to prepare a company for future opportunities both in the near term and in the long term - a strategy that works well with the development of ISO 9000 programs. The near term constitutes the time necessary for thoroughly evaluating consequence and benefit, as well as for implementation. The long term provides for improvement and planned growth. The following statement may be applied when any change is being considered and is certainly worth attention when ISO 9000 is being evaluated: take "a new view of organizing strategy development ...: the company as a set of skills being continuously elaborated, to be applied as needed to the market opportunity" (Peters, 1987).

Plan Development

Location

Successful planning results, in part, from a needs-oriented approach to defining objectives and requirements. Needs are usually unique to the business being conducted; therefore, each plan becomes unique to the circumstances at hand.

The question often first asked is "Should we fit the plan to the existing plant or should a new plant be considered?" Plants have been very successfully retrofitted to meet ISO 9000 standards. New plant construction is usually the easier way to meet the standards, but there is no guarantee that it will be so

in every case. Perhaps the most important considerations are logistics and demographics. Consideration must be given to

1. sources and locations of raw products, materials, utility services, and rates;

2. definition, expanse, and geographies of the marketplace;

3. the export pathway, including access, modes of transportation, and shipping volume;

4. economic development, redevelopment, and allied grants offered to support new business; and

5. the labor market and specialty trades support.

If several products are to be developed from a variety of raw materials, items 1 and 2 above must be considered for each product.

Marketplace

The market must be realistically defined. It can be expansive or concentrated, depending, in part, on the selection of products to be processed, packaged, and sold. Essential topics for study are

1. the growth potential of the market over the near and long term and how much development is needed for a competitive position to be established;

2. the permanence of the export marketplace in terms of economic and political stability;

3. the costs of doing business in the market area - realistically appraised - and the impact of those costs on margins and profit;

4. who the competition is and how well established;

5. what the import demands are in terms of duties, inspection, border hold restrictions, and time required to get the products into the marketplace;

6. how the receiving market perceives ISO 9000 compliance (remember that ISO 9000 does not, in itself, establish product quality); and

7. ethnic influence on process methods and labeling and what label standards apply

Processing and Production

Several factors must be considered in evaluation and determination of methods and systems to be employed in providing end products. To meet ISO 9000 requirements, construction materials used in the interior design and the wall and floor finish selected must comply with U.S. Department of Agriculture (USDA) and Food and Drug Administration (FDA) standards in addition to complying with building code regulations. Interior layout and design must include a clean-in-place (CIP) system or an appropriate plantwide integral sanitation system providing for thorough plant sanitation. Effluent and solid waste removal also must be an integral part of the design.

ISO 9000 requires that processing, production, and packaging equipment must be designed and fabricated only with USDA/FDA-approved materials. Stainless steel, preferably grade T316, is recommended for all steel construction. Conveyor belting and contact surfaces must be manufactured from approved polyethylene, polypropylene, nylatron, or teflon materials. Design of this equipment must provide easy access for cleaning and sanitizing of all surfaces. Packaging equipment (depending on the type of package) may be required to provide nitrogen flush, vacuum suction, or hot closure.

The entire design, the materials, and the equipment must be documented, and documentation must be kept in an appropriate format that is available at any time for a compliance audit.

Manufacturers of most food and dairy equipment provide the added design needed for ISO 9000 requirements and are very willing to document design detail. That material should be included in the record file.

All critical control points must be identified, and a means for on-line data collection must be established. Point locations and the selection of data collection equipment depend, in part, on the process and production methods employed. The data collection procedures, methods for retrieval, and record keeping should be incorporated into the design process so that their costs can be adequately determined and evaluated.

Generally regarded as safe (GRAS) procedures require documentation, as do hazardous materials (HAZMAT) handling and storage procedures. This documentation should be incorporated into the system used to record and store critical-control-point data. In this way, all operations data are available at one location for audit.

Personnel Training

Training of personnel can constitute a significant initial cost, and costs will recur as programs and regulatory requirements change. These costs should be considered during the planning process to define the impact additional staffing and training will have on the cost of implementing ISO 9000 programs.

The training process encompasses all levels of plant personnel, from management to quality assurance and administrative services. Technical resource staff such as engineering and data-processing staff should receive interpretive orientation training that familiarizes them with ISO 9000. They can then understand how their input contributes to program compliance.

It may be appropriate to develop job descriptions for key personnel, including descriptions of qualifications needed for performance of the duties. The next step might be to have human resources personnel conduct a preliminary search for persons with the needed qualifications to determine their availability and appropriate pay rates.

Making the Decision To Proceed

Interpretation of Collected Information

The decision-making process begins with a complete compilation of all costs: land, building, special materials, machinery and equipment, and personnel training. The next step is to review and apply the marketing analysis to the plan and to develop a reliable estimate for gross profit. Then, fixed direct and indirect costs must be accurately estimated. Finally, the cost for startup is defined.

A schedule for amortization of capital expenditures is selected and is annualized. All costs are added. Gross and net profit are calculated. A source is determined for the capital with which machinery and equipment will be purchased (or leased), startup costs will be defrayed, and key personnel will be employed and trained.

It is now time to compare the calculated cost of pursuing and implementing an ISO 9000 program with the cost of implementing a traditional program. In many cases the initial cost for the ISO 9000 program may be only slightly more. Nevertheless, exercise care. Take into consideration the additional cost to operate, maintain, and upgrade the program as regulatory changes warrant.

At this point, if there is comfort with the prospective costs, reassess how adoption of ISO 9000 would fit with the current corporate business plan. Make appropriate changes in the plan if the choice is to move forward.

A new market plan should be developed that includes the ISO 9000 program. The plan should include analysis of short-term and long-term strategies. Incremental sales projections must be made, preferably in 90-day blocks for the first year. Those projections may be extended to six-month increments, depending on how accurate the initial projections prove to be.

It's never too late to stop and reconsider. Although more money has probably been spent to bring the ISO 9000 program plan to this point than would have been spent for a traditional plan, the money probably is recoverable if a decision is made to pursue a traditional program from this point forward.

Implementation

The best advice, as with any new program, is "Be deliberate, be careful, and take one step at a time." Begin by testing newly established compliance procedures. Make appropriate modifications to ensure reliable sampling, effective analysis, and accurate interpretation of collected data. Test record keeping to be sure that all needed data are easy to access.

Continue to guide and train personnel. Encourage self-improvement by enrollment in technical training programs, and be prepared to assist personnel in defraying the cost of training. This kind of formal assistance adds significant credibility to an established ISO 9000 program, particularly if the company decides to upgrade to the next ISO program level.

Results should be routinely reviewed in 90-to 120-day increments. Be prepared to make improvements at any level of the process, first determining what the needed improvements will cost and the level of necessity (i.e., is the improvement a must, or might it be deferred without placing ISO 9000 certification in jeopardy?). Key areas for routine review are

* personnel,

* record keeping,

* plant procedures,

* equipment efficiency,

* process modifications,

* sustained gross margin, and

* cost and profit.

Summary

The following summary taken from Thriving on Chaos neatly fits the scheme for ISO 9000 implementation:

* The "guiding premise" is to "measure what is important."

* The next step is "reconceiving the system tools," which consists of revamping "the chief control tool for control of empowerment" and decentralizing "information, authority, and strategic planning."

* The third step is "establishing trust via systems," which means setting "conservative goals" and demanding "total integrity" (Peters, 1987).

Simple, viable measures of what's important should mark every square foot of every department in every operation. Place special emphasis on developing measures associated with revenue generation, supplanting the current bias toward cost containment. Every manager should track no more than three to five variables that capture the essence of the business.

Most of Peters' guidelines fit well with ISO 9000 implementation. The only exception might be decentralizing information, at least as it relates to record keeping. The final comment about manager responsibilities certainly applies to ISO 9000 simply because of the need for more precise results.

When a company considers entering into this program, its first step should be to "look at reality" and decide whether the company needs the program to be competitive and to grow. Often, there may already be in place a production program that closely meets ISO 9000 requirements. If this is the case, and if profit margins are strong, no change may be the best plan for the near term. Still, conversion from a traditional program to ISO 9000 and higher levels of compliance may benefit the company over the long term, depending on the total corporate plan. The decision must come from within.

(Adapted with permission from Proceedings of the First NSF International Conference on Food Safety, Albuquerque, New Mexico, November 16-18, 1998).

Corresponding Author: J.D. Fleming, Mead & Hunt West, Inc., Merced, CA.

REFERENCES(*)

Clement, David A. and Daniel L. Surfus, "Master Planning," in International Exposition of Food Processors proceedings, San Francisco, October 1996.

Fleming, J.D., Plant Sanitation-Planning and Procedures, a Del Monte Management Manual published by Del Monte, March 1974.

General Proceedings, "Regulatory Compliance Issues," The University of California at Davis/League of California Food Processors Joint Conference, Sacramento, November 1991.

McAloon, T., "Designing Your Plant for Sanitation," in the National Food Processors Association Annual Convention prepublished proceedings, Chicago, November 1998.

Peters, Tom, Thriving on Chaos, Harper & Row, publishers, New York, 1987.

Schaeffer, M., "A Year 2000 View of Asset Management," in the NFPA Annual Convention prepublished proceedings, Chicago, November, 1998.

* Editor's note: Because this paper was originally published in Proceedings of the First NSF International Conference on Food Safety, the references are not consistent with the Journal of Environmental Health's normal style format.