Moving over from a manual system to advanced food safety software will make your life as Quality Manager easier and your work more enjoyable, but this is usually not enough to convince upper management to commit to investing and implementing a new system.
Estimating the financial impact of such systems is complex because you need to look at changes in your current processes, reduction in risk, and impacts on future employment costs.
However, finding out your cost of quality is a smart exercise, and even if you don’t invest in software, because you are likely to find out things about your system that you hadn’t considered before.
Start thinking about the cost of compliance
I talk to quality managers around Europe on a daily basis, and one of the most common challenges I come across is convincing the CEO or the CFO about the necessity of a better food safety management system.
Most CEOs only awaken to the cost of compliance when something goes wrong
Most CEOs only awaken to the cost of compliance when something goes wrong: You have horse meat in your lasagne, for instance. That’s where a smarter system that allowed better and pro-active control of your suppliers might have saved your business from catastrophic failure.
7 ways software can improve the bottom line
There are 7 areas where financial gains or savings can be made by investing in a digital food safety management system.
Some of these areas are easy to estimate, while others are trickier.
|Area||Expected Annual Savings||Difficulty of Estimation||Description|
|Printing & Archiving||From $1k to 100k / year||Easy||Elimination of printing, storage, and archiving costs related to paper.|
|Administration||From $10k to 250k / year||Medium||Reduction in the employment costs related to manual checking, verification, collation, and administration of food safety, quality and supplier management records.|
|Software||From $0 to 250k / year||Easy||Consolidation of systems under Safefood 360° allows for reductions in in-house IT support needs.|
|Travel||10-60% annual reduction||Easy||Reduced need to travel between sites, customers, and suppliers to check records.|
|Consultancy||Expect 30-60% annual reduction||Easy||Our continuously updated best-practice workflows mean you are ahead of compliance requirements with less need for external consultancy.|
|Process Improvement||From $10k to hundreds of thousands||Difficult||Can be hard to predict, but some companies have bottlenecks with manual QA processes. Elimination of these bottlenecks can speed up your production and allow you to produce more. Some companies reduce their waste significantly as product batches are not rejected due to incomplete paperwork.|
|Recall & Risk||From thousands of dollars to millions||Difficult||The ultimate business risk for food businesses is having to recall products. Most recalls happen because of faulty or incomplete paperwork. Safefood 360° helps you mitigate the risk of missing critical details.|
1. Printing and Archiving
The number one aim of food safety software implementation is to eliminate paper records, printing, and storage.
Safefood 360° allows you to effectively implement an entire food safety standard through a single interface, which means that the savings in printing, storage, archiving and administration costs can be significant.
Past data shows that typical customers save anywhere between 40% and 90% in food safety, quality and compliance related printing costs by implementing Safefood 360°.
Data shows that typical customers save between 40% and 90% in printing costs
Removing paper from your record keeping also supports the Corporate Social Responsibility goals set by many leading businesses, and it supports digitalization strategies, which can be seen as an additional benefit.
Example: A medium-sized company is spending $5,000 on printing and paper, $12,500 for external warehousing for paper records from the past 10 years, and an additional $5,000 on a part-time administrator who looks after the archives and collates documents. With a digital system, none of the above expenses are necessary.
Employment overhead associated with administrating records is usually the single biggest cost for QA and QC departments.
Many Safefood 360° customers save up to hundreds of thousands every year by implementing the system because the need for manual verification, collection, and management of, for instance, supplier management data is highly reduced. The savings don’t necessarily have to come from reducing the existing headcount but rather the avoidance of hiring new staff in the future.
In a typical situation, implementing Safefood 360° is able to postpone the moment when your team would otherwise be forced to hire new employees to handle manual quality management processes.
Potential savings range from anywhere between 10 and 100 thousand dollars every year, depending on your business.
Example: A small US-based company has 200 suppliers, which under the new FSMA regulations require 4 additional hours of work per supplier per year for managing FSVPs and other supplier documentation. This is equal to 800 hours of additional work, which can now be largely avoided as the software allows the current team to handle the extra work. At the standard rate of $96 / hour for a Qualified Individual, it means savings of up to $ 78,400 / year.
If you are using a number of software products for food safety management, you might be able to benefit from replacing multiple systems with one central system.
As a cloud-based system, Safefood 360° also takes care of maintenance and daily support of the entire system, which reduces your need for internal IT support.
Example: A Safefood 360° customer was able to replace an old Supplier Management system, an Audit Management app, and the SharePoint based Document Management Repository with one system and save over $125,000 every year in software licenses, maintenance, and internal IT support costs.
If you manage a group of facilities, the chances are high that you are traveling between multiple sites every month to check that work has been conducted, and to monitor the status of projects.
With a ready Enterprise architecture in place, Safefood 360° can provide you with a single entry point to your group-wide food safety and compliance data. This means you can reduce your travel significantly and focus your visits on building better relationships with your managers.
Example: A group Quality Manager is in charge of 6 sites. She used to travel twice a month to one of the sites to check on work and records. The average cost of one trip was $1,000. With Safefood 360°, the manager is able to oversee group operations instantly from anywhere and cut down on time spent traveling by 50%, amounting to $12,000 in savings every year.
Because Safefood 360° offers best-practice workflows that are continuously benchmarked against the latest industry requirements, the system evolves in real time in order to always keep you ahead of the compliance curve.
Implementing Safefood 360° has allowed many companies to reduce their dependency on external third-party consultants, whose job has been to help companies maintain compliance with little visible benefits.
Example: A small company used to spend $5,000 dollars every year on bringing in external food safety consultants to conduct GAP analyses and help with updating its systems. With Safefood 360°, its needs have been reduced by half, as the Quality Manager is able to track legislative changes in his “My Updates” panel and is able to enjoy an always up-to-date system.
6. Process Improvement
Estimating improvements in your quality and compliance management processes can lead to better production outcomes. The bigger your organization and the bigger your team, the more significant these benefits will be.
The impacts of this can include:
- Faster product output due to faster QC checks
- Faster processing of incoming materials due to faster QC checks
- Reduced waste due to a reduction in errors
If you have bottlenecks in your current system that arise from inefficient paper-based and manual work, a digital software can probably make your life much easier.
Example: A large European manufacturing site decided to implement production line QC checks by applying the Monitoring module in Safefood 360°. Completing the checks on a tablet allowed fewer people to do the same number of checks in less time, which allowed the production line to run faster.
7. Recall and Risk
Investment in risk mitigation strategies can be difficult to estimate because you can never know for sure if something you did prevented a recall.
However, if we look at 1,000 companies that use manual systems and compare them to 1,000 companies that use advanced food safety management systems, we should be able to see a difference in recall and risk related costs.
The real catch here is that even though recalls are rare, they happen. Remember, someone wins the lottery every week and the odds of winning that, compared to the likelihood of your business facing a recall situation, are much more unlikely.
The number of food recalls has nearly doubled in the past ten years. Most companies that end up conducting a recall face costs of up to $10 million, some even up to $100 million.
With this type of money at stake, it is surprising that food safety is not the number one priority of every single food business.
Digital systems reduce your risk because they allow you to spot deviations earlier, manage your suppliers smarter, and reduce mistakes that used to happen with manual paperwork
Digital systems reduce your risk because they allow you to spot deviations earlier, manage your suppliers smarter, and reduce mistakes that used to happen with manual paperwork.
Example: A customer used to pay an American retailer over $250,000 every year due to simple labelling errors. The customer implemented a label checking program through Safefood 360° where operators would take a picture of the label and then sign it with their electronic signature. This simple procedural change reduced the labelling errors to virtually zero.
Put the savings together to estimate your ROI
The numbers estimated above will reveal your ROI. Many companies that invest in Safefood 360° reap their initial investment back in less than a year and end up saving money in the long run.
If you want to see how much you could save yourself, try this simple ROI calculator to give you an early estimate of the total amount you could save.