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Global Supply Chain Management: A Clear View?

Global Supply Chain Management Global Supply Chain Management
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Do transparency, integrity and quality make up a level supply-chain playing field for all suppliers and manufacturers or are these essential requirements a minefield of more questions than answers?

The participants are:

• Cal Bewicke, Chief Executive Officer, Ethical Naturals, San Anselmo, CA

• Shaheen Majeed, Marketing Director, Sabinsa, East Windsor, NJ

• Michael McGuffin, President, American Herbal Products Association (AHPA), Silver Spring, MD

• Steve Mister, President and Chief Executive Officer, Council for Responsible Nutrition (CRN), Washington, D.C.

• Alison Raban, Certified Food Scientist, BI Nutraceuticals, Rancho Dominguez, CA

• Jarrow Rogovin, Founder and President, Jarrow Formulas, Los Angeles, CA

“The origins of a company’s products used to be pretty murky—beyond the supply chain function, virtually no one cared,” noted Steve New in The Harvard Business Review. “Of course, all that’s changed; consumers, governments and companies are demanding details about the systems and sources that deliver the goods. They worry about quality, safety, ethics, and environmental impact—farsighted organizations are directly addressing new threats and opportunities presented by the question, ‘Where does this stuff come from?’”

Perhaps nowhere is supply-chain transparency and quality more important than for products and ingredients that consumers put on or into their bodies: foods, beverages, supplements and other natural products.

Nutrition Industry Executive (NIE) asked a selection of experts to delve a bit into the supply-chain continuum for their insights into how the natural products industry is doing, and what it’s doing, to drive quality, integrity and transparency from field to shelf, or at least somewhere in between.

NIE: Transparency has become a key guiding principle in the dietary supplement industry. What are the specific steps a supplier, distributor or finished product manufacturer should take to improve its supply-chain transparency from field to shelf?

Majeed: Transparency has been an industry buzzword for almost two years now, and more companies are actually walking that talk. While the New York Attorney General’s action (proposed Assembly Bill 4712) eroded some consumer trust, it is transparency that has been able to retain that trust for some companies, and bring back that trust for others. Those who have always been committed to long-term sustainability of the industry believe that the bar to entry needs to be raised to maintain that trust, with better product quality and more clarity and transparency. Companies disclosing their manufacturing and QA (quality assurance) process and explaining the scientific validation behind their health claims are important components to retaining customer confidence in dietary supplements.

Bewicke: The supplier/distributor needs to audit the manufacturing facility for the ingredients concerned, and also understand the business philosophy of the company: their level of concern and familiarity with QA issues. The most important step, however, is verification. This requires detailed U.S. testing of individual lot numbers of each material to include: identity, potency, heavy metals, pesticides and micros. This is the only way to assure customers, and ultimately consumers, that they are getting the real products they are paying for.

Rogovin: Among reputable companies, transparency long has been a by-word. However, consumers need to be aware of a strategy I term transparent “product mystification.” For instance, companies selling DMAA (dimethylamylamine) claimed to be “transparent” about this item being extracted from geranium and even supplied “paperwork” from a factory to back this up. Now, of course, the FDA (U.S. Food and Drug Administration) has declared this claim to be false. Years ago, claims were made for “mineral orotates” that included cancer and multiple sclerosis. Somehow, the orotic acid salt imparted wondrous qualities to calcium and magnesium. Anti-candida claims for irrelevant products ran rampant. How does the new focus on “transparency” help in such cases?

Raban: First and foremost, finished product manufacturers, co-manufacturers and ingredient suppliers should have a comprehensive vendor qualification step implemented in their quality program. This ensures high-quality ingredients are sourced and processed while also maintaining complete traceability, from the origin of the raw material to the manufacturing facility of the finished product. This is extremely important for brands that utilize co-manufacturers; if the brand’s quality requirements are not addressed and well-communicated, co-manufacturers may not follow the same set of standards.

In addition, a company should emphasize the importance of quality and traceability throughout their whole infrastructure, from customer service to purchasing to sales. As George Pontiakos (BI’s CEO/president) always says, “Quality is not just a product metric, it is company culture.”

Mister: The industry has launched a number of initiatives over the past year to encourage manufacturers to be more transparent about their products and supply chains. The Supplement OWL (Online Wellness Library), the dietary supplement product registry, is one of those ways for companies to be more visible and accountable to their customers and regulators as well. Being in the Supplement OWL tells regulators and retailers your products are to be considered part of the mainstream marketplace and that you are willing to provide labels for examination and evaluation. In addition, other programs that promote supply chain transparency, encourage good agricultural practices in the harvesting of botanicals and standardize the audit requirements for GMPs (good manufacturing practices) all have the support of CRN.

McGuffin: The American Herbal Products Association is developing an assessment program for its recently adopted Guidance on Good Agricultural and Collection Practices and Good Manufacturing Practices for Botanical Materials. Agricultural and collection practices have wide-ranging impacts on product quality, native and regional communities, and the environment. AHPA members have long supported the need for best practices to be clearly described and documented. By establishing standard operating procedures that follow these best practices, firms at every level in the supply chain will better ensure the production of good quality herbal raw materials. This guidance and the assessment program will help create additional transparency in the supply chain.

NIE: Regarding safety measures, some sectors of our industry have adopted “no sale” policies for bulk-powdered caffeine. Some may say this is good because natural ECA stack products have been implicated in some medical events. Others may say that there will always be some people who use caffeinated products irresponsibly, so we can’t self-regulate responsibility or assert that we know what’s best for consumers—everyone remembers the soda ban in New York City. What are your thoughts?

Bewicke: Bulk caffeine is easily abused, and dangerous when taken in high doses or over a long period of time. Whatever the supplier says, bulk, pure caffeine is almost always synthesized: extraction and purifying from natural plant sources isn’t practical or economical. For these reasons it shouldn’t be a part of the supplement industry.

Mister: Tens of millions of consumers ingest caffeine every day with coffee, tea, supplements, and even over-the-counter medicines. It’s one of the studied food compounds that displays a wide margin of safety in most typical dosages. However, we can think of no reason why consumers need to purchase bulk amounts of highly concentrated caffeine powder. Even half a teaspoon can prove deadly, and most consumers are not equipped to measure the very small amounts of powder that would deliver a safe dose. CRN has encouraged FDA to declare bulk caffeine to be adulterated when sold directly to consumers because of the high potential for harm.

Majeed: The majority of the population may start their day with caffeine, however the side effects of excessive intake are well and widely known. Remember the formulas that used high doses of caffeine and ephedra that led to ephedra being banned? It’s a responsible step for the industry to adopt “no sale” policies towards bulk-powdered caffeine given the possibility of misuse of such products. However you can only create so many rules or regulations to avoid misuse of a substance that has also health benefits when used responsibly.

McGuffin: In 2015, AHPA established a trade requirement that prohibits sale by AHPA members of pure caffeine in bulk form at retail (to consumers). AHPA’s trade requirements are created and codified when the industry determines that policies beyond those mandated by federal laws serve the common interest of the industry and consumers. The requirement was adopted in the wake of reports that associated incidents of serious injury and death with use of pure caffeine purchased by consumers in bulk packaging.

Rogovin: Selling such a product as caffeine as a bulk powder is unbelievably irresponsible. Bulk powders are appropriate for products used in gram amounts, not milligram amounts. Caffeine, especially in certain combinations can be dangerous. NIE: What’s new with industry efforts to address economic adulteration?

Bewicke: Very little. In the botanical side of the business, in which our company is primarily involved, very few suppliers do any significant testing or supply chain validation. “Price per kg is the number that determines sales levels. The manufacturer with the lowest price sells the greatest tonnage of product.”

Testing adds substantially to the cost of a product, as it requires not just a few random tests, but a well-developed program of sampling, source verification and record keeping. Also of course, the ingredients must then pass the tests!

Majeed: Economic adulteration is a serious threat to the safety and health of consumers, and the ability of the industry to continue developing and selling products that support health. The broader industry needs to be clear on the consequences of such “quick buck” practices, from loss of consumer trust, to constrictive legislation to legal action. Each company has to make the decision to safe guard itself and the industry against such adulteration. When a product becomes popular, adulteration quickly becomes a risk to be guarded against by careful sourcing and stringent testing.

One blaring case is the economic adulteration of natural turmeric-based products with cheaper synthetics. In 2015, Sabinsa became aware of synthetic curcumin entering the market labeled as natural turmeric-based products. Sabinsa worked with the University of Georgia to establish a test method (based on C14 analysis) to overcome this challenge by analyzing the bio-based carbon in curcumin products that is able to identify synthetic curcumin. We encourage our industry colleagues to take similar actions within their area of expertise.

Mister: CRN continues to expand the work and output of the Standardized Information on Dietary Ingredients (SIDI) work group, which is working to strengthen communication in the supply chain and assure high quality ingredients. CRN is also pleased to support efforts to reduce adulteration in the supply chain like the American Botanical Council’s Botanical Adulteration Program, the Good Agricultural Practices being developed by AHPA and the GRMA (Global Retailer and Manufacturer Alliance) standard, which will establish a consensus-based standard for GMP compliance.

Rogovin: The FDA should require raw material suppliers to follow the GMPs. Congress should require Amazon to disclose who third-party resellers are, especially if asked by branded companies. Currently, Amazon allows a company to sell on its marketplace under one name while keeping their true name secret. This means that brands can’t easily track down the real company is that is selling a given product on Amazon.

NIE: Related to addressing adulteration, what are the best efforts to ensure ingredient and product identity throughout the entire supply chain? What is your company or organization doing to tackle this?

Raban: As an ingredient supplier of plant-based powders, detecting and preventing economic adulteration has been a priority of BI’s since our start almost 40 years ago. To do so, BI uses a two-pronged approach to ensure high quality material. First, we have developed a robust vendor qualification program. For BI, quality starts before the raw materials even enter our facility. Our strict vendor quality surveillance and management system ensures all materials meet stringent specification standards and adhere to GMP and regulatory requirements. It provides clear guidelines on specifications, test methods, and product quality to vendors; regular audits of the manufacturing and lab facilities to assure compliance with GMP and GLP (good laboratory practice); random audits of traceability to assure usage of correct raw materials; random sampling and testing to ensure compliance with specifications; and oversight of the vendor’s entire QA/QC (quality control) program. This robust vendor qualification program verifies quality practices are maintained in the harvest, collection, and initial onsite processing.

Once raw materials enter our facility, they are tested before, during and after production—this is our second prong: comprehensive testing. BI’s standard testing procedures include botanical ID as well as adulteration and contamination, whether accidental or intentional. BI prides itself on being the industry leader in botanical identity; our identity authentication and testing has always been on the forefront of BI’s quality efforts.

In 1996, we introduced our Identilok program in order to guarantee the highest levels of purity, authenticity, and cleanliness. It encompasses identity authentication and testing on the genus species level from all angles: Macroscopic Taxonomy, Microscopic Taxonomy, Organoleptic Tests, TLC Fingerprint, FTIR Fingerprint, HPLC Chromatogram, HPTLC Chromatogram. As of right now, BI’s Identilok program is 98 percent correlated to DNA testing and we further strengthened our identity authentication and testing efforts as well as met customer demand by installing DNA testing technology in our new Reno, NV facility. All of these steps build a complete profile of the ingredient, not only giving peace of mind to our customers but also traceability to their customers, consumers.

High-quality products should not be the goal, but the standard. Ingredient suppliers as well as finished goods manufacturers have to invest both their time and resources to guarantee this. There are no short cuts when it comes to quality.

Rogovin: Follow GMPs and have a good lab; order from quality suppliers. Quality is something both Jarrow Formulas and Jarrow Industries take very seriously. Both companies have extensive QC and QA processes that surpass what is mandated by FDA GMP requirements. Some important steps include:

1. Following GMPs;
2. Using reputable testing laboratories. In the case of a manufacturer like Jarrow Industries, having a lab in-house allows more thorough and timely testing to be performed;
3. Having excellent QC staff at all points of contact throughout the supply chain from the receiving of raw materials, to any manufacturing processes and finally to the selling of finished goods; [and]
4. Having customers visit all company utilized manufacturing and distribution facilities.

The bottom line is that quality is an essential part of the dietary supplement business and reputable companies must invest on an ongoing basis to maintain high levels of quality throughout the entire process.

McGuffin: Identity authentication always prevents adulteration. AHPA’s Botanical Identity References Compendium is a free, cooperative and centralized source of information on physical characteristics and test methods that can be used by qualified and experienced analysts to determine the identity of plant species and articles of trade obtained from these plants. This resource provides the industry with examples of unique identifying characteristics and specific analytical methods for common species to help verify the identity of plants and plant material. Bewicke: As I mentioned, the most important step is verification. In addition to ENI, our encapsulation facility and testing lab are certified up to FDA 21 CFR-11 standard by NSF. Independent certification to a high level is a lot of work, but it assists a company in maintaining and improving standards on an ongoing basis.

NIE: Regarding quality, what are the best ways companies can implement and maintain quality best practices and provide that assurance to business and consumer customers?

Majeed: It is important for companies to realize that there is no alternative to proper testing when it comes to quality management. The majority of non-compliance problems in the dietary supplements industry are related to GMP failures in ingredient testing, so this is definitely a place to improve. A robust testing program with quality labs costs a lot less than solving the problems that will eventually arise if the investment is not made. Transparency, dialogue among suppliers and manufacturers, and periodic audits and checks also help to keep good quality control management in place for both ingredients and finished products. External audits should be implemented wherever possible, and continuing training of the personnel involved in QA helps to maintain standards.

NIE: How far has the industry come in the last few years to improve the supply chain? What changes have you seen and what specific steps must the industry take?

Rogovin: The overall industry supply chain has improved. More companies are adopting best practices from farm through manufacturing to finished goods. As the value of the industry has increased and companies have grown larger, the infrastructure is developing to ensure high quality products are being produced, tested, sold and consumed with confidence. Again, the GMPs are critical. However, the internet and the constant drive to meet lower prices are (destructive) to quality. Technology has become less expensive and more available to check and assume quality.

However, the industry still has areas to improve. For example, raw material suppliers need to continue to develop standardized testing methods to ensure all raw materials are tested according to the best and most accurate method. It is key to avoid testing methods that either are not accurate or are just the incorrect method to use. It is also important to encourage the FDA to enforce existing laws to weed out bad actors that are selling ingredients that have either been adulterated or that don’t have NDIs (new dietary ingredients) or GRAS (generally recognized as safe) submissions. The industry needs to constantly be on guard for companies that find ways to spike active extract levels through improper extraction methods.

Another important piece that needs to be improved is in regard to intellectual property. For example, if one company does all the safety work on an ingredient, another company should not be allowed to use that work as their own. If one company develops an NDI submission based on all their work, another company should not be allowed to use any part of that submission as their own. Companies need to be protected, otherwise, they will not continue to invest in innovation and new product development.

Bewicke: Brands need to insist that the ingredients used in their products go through U.S. testing for identity, potency, heavy metal, pesticides and micros. The companies that do insist on this get good quality ingredients for their products. Those that don’t roll the dice with every purchase.

Raban: From the viewpoint of an ingredient supplier, a lot of positive changes have transpired in just the last couple of years to encourage manufacturers to take the necessary steps to ensure their products are both safe and accurately labeled. However, as with any industry, there are unscrupulous companies both intentionally for financial gain and unintentionally for lack of understanding. There is always more that can be done, but we are seeing the industry as a whole go in the right direction.

NIE: Anything else you would like to add?

Rogovin: The mega count race in probiotics is irresponsible and misleading. There is no scientific support for 100 billion levels per capsule much less 150 or 200 billion in enteric-coated or delayed-release capsules. Only one company has done studies for its 300-plus billion product and it’s sold as a medical food, doctor supervised and for diagnosed conditions. Further, those companies are either failing to identify the strains or giving them phony names. This is counter to FDA label regulations and violates the labeling standards of the IPA, the International Probiotics Association. Stores have a responsibility to worry less about GMOs and more about questionable and even mislabeling. These poor formulation and ultra high-count probiotics have no clinical data. Strains that are clinically documented use typically one to 10 billion organisms, not 100 billion plus. In fact, such high counts of documented strains would cost $3-5 per capsule. The whole thing is ridiculous. Jarrow Formulas has been a leader in probiotics for 30 years. We follow the science, not the hype.” NIE

For More Information:
American Herbal Products Association, (301) 588-1171
BI Nutraceuticals, (310) 669-2100
Council for Responsible Nutrition, (202) 204-7700
Ethical Naturals, (866) 459-4454
Jarrow Formulas, (310)204-6936
Jarrow Industries, (562) 906-1919
Sabinsa Corporation, (732) 777-1111

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