Efficient Raw Material Sourcing and Handling Guide

1. ADEQUATE SOURCING AND HANDLING OF RAW MATERIALS • By Folawe Adewakun HEAD-Quality, Environment, Health, And Safety Tantalizers PLC September, 2012

2. Content Introduction Definition Of Terms Sourcing Process Handling Process Conclusion Quality Assurance Induction Programme 2 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

3. Introduction • Intense Increase In knowledge • Customers High Demand For Quality Products • Only Right And Quality Materials Will Produce Quality And Safe Products • Customers Delight Quality Assurance Induction Programme 3 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

4. Definition Of Terms Raw Materials: • An Unprocessed Natural Product Used In Manufacture • Unfinished Goods Used In The Manufacture Of A Product • Unprocessed Material Of Any Kind Quality Assurance Induction Programme 4 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

5. Definition Of Terms…Contd Sourcing: The Term Sourcing Refers To A Number Of Procurement Practices, Aimed At Finding, Evaluating And Engaging Suppliers Of Goods And Services Quality Assurance Induction Programme 5 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

6. Definition Of Terms…Contd Handling: • A Touching, Feeling, Or Manipulating With The Hands • The Process Of Packing And Distributing Merchandise Food Handling: • Any Aspect Of The Operations In The Preparation, Transport, Storage, Packaging, Wrapping, Exposure, For Sale, Service, Or Delivery Of Food Quality Assurance Induction Programme 6 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

7. Definition Of Terms…Contd Logistics : • The Management Of AllMaterials Flow From The Point Of Acquisition To The Final Point Of Consumption • Implicit In This Function Is The Optimization Of All Activities In The Total Supply Chain Thus Providing Strategic And Competitive Advantage. Quality Assurance Induction Programme 7 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

8. Supply Chain September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

9. Sourcing Process Material Planning: ‘‘As Someone Has Nicely Put It: "Failing To Plan Is Planning To Fail” • Know What To Plan – Product Knowledge And Recipe / Formulation • Know Your Average Usage – How Many Units Do You Sell • Lead Time - Time Between Placing An Order And Receiving The Order Quality Assurance Induction Programme 9 September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

10. Sourcing Process…Contd Purchasing: • Source, Research And Selection, Negotiation, Building Supplier Relationship Programmes. Inventory Management: • Control Over Inventories, Sustaining Minimum Practice Stock Levels, Minimum Holding Costs, Wastages And Obsolescence. Ware Housing And Stores: • Location, Capacity, Mix And Operation. Transport: • Mode Decisions, Scheduling, Routing And Operation. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

11. InventoryPlanning & Control Issues To Be Considered Independently Are… September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

12. Inventory Control • Reorder Point System: • Stock Levels Are Monitored Closely Until They Fall To Some Predetermined Level (Reorder Point) Which Signals That A New Batch Is Required. • An Order Is Placed For A Given Quantity Called The Economic Order Quantity (EOQ). September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

13. Inventory Control…Contd • Periodic Reorder System: • Inventory Levels Are Not Monitored • A Fixed Review Interval Is Established (E.G. Weekly Or Monthly) And • Production Or Purchase Orders Are Placed For A Predetermined Quantity, Until The Next Order. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

14. Inventory Control…Contd • When Demand Is Certain: • This Approach Is Called Requirement Planning • It Can Easily Be Calculated With Some Degree Of Accuracy. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

15. Pressures Influencing Logistics System Product Proliferation Shorter Product Life Cycles (Shelf life) Increasing Customer Service Requirement Competitive Pressures Changing Materials Handling and Transport Technologies Pressures to Reduce Incentives and Cost Change in Players and Roles in Distribution Channels Regulatory Changes Improved Communications and Information Technology Pressures for Improved Financial Performance Need to Redesign and Improve Efficiency of Logistics System LOGISTICS SYSTEM September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

16. Raw Material Model HIGH Risk/ Exposure LOW HIGH LOW Relative Value September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

17. Management Of Warehouse/Stores Responsibilities • Receiving Process • Store Arrangement • Good Housekeeping • Security • Documentation • Replenishment Of Store / Requisition September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

18. Supplier Development Programme • Define The Objectives. • Select The Supplier Base. • Obtain Supplier’s Commitment • Review Supplier’s Processes And Systems. • Establish Quality Standards • Obtain The First Samples. • Approve The Samples. • Visit / GMP Audit Of The Supplier September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

19. Suppliers Audit Check List Factory: Type Of Products: Date: Auditors: Audited Persons/Units: General Impressions Priority Action September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

20. Suppliers Audit Check List…Contd Organization & Personnel 1. Is there a defined organogram of management structure? 2.Do the personnel in the factory have the necessary qualifications? 3. Is there a training programme for the personnel? 4. Are there facilities for personnel medical attention when needed? 5. Are the personnel provided with adequate protective clothing’s and wears appropriate to the operations being carried out? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

21. Suppliers Audit Check List…Contd Building And Facilities 1. Is the plant of suitable size and space for the operations carried out? 2. Is the condition of the areas okay: walls, floors Ceilings, ventilation 3. Does the design of the plant allow for free flow of materials from receipt to finished products? 4. Are critical areas of the plant segregated to prevent mix-ups and contamination? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

22. Suppliers Audit Check List…Contd Production And Process Controls 1.Are there instructions for scheduling production 2. Are the items being manufactured identified throughout the operation? 3. Is the manufacturing environment acceptable for the type of item being produced? 4. Is there a formal record of production steps and quantities being used? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

23. Suppliers Audit Check List…Contd Production And Process Controls…Contd 5. Are in-process checks performed sufficient to define the actual status of the batch? 6. Are there written Standard Operating Procedures (SOPs) for each stage of production? 7. Are the SOPs final approval, signed and dated by the plant manager? 8. Are the staff aware of the SOPs? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

24. Suppliers Audit Check List…Contd Warehousing And Material Management 1. Is the storage area clean and well organized? 2. Is material adequately identified as to Acceptance, Quarantine, or rejection? 3. Are materials stored under appropriate conditions of temperature and humidity? 4. Is the storage areas restricted to authorized personnel only? 5. Are materials adequately segregated to avoid mix-ups? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

25. Suppliers Audit Check List…Contd Warehousing And Material Management…Contd 6. Does the use of materials follow the principle of “First in First out” (FIFO)? 7. Are there written instructions for the treatment of rejected materials? 8. Are there records of distribution channels for each batch of product to allow for tracing? 9.Are suppliers formally evaluated? 10. Is the status of each supplier reviewed at least once a year; based on defined principles? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

26. Quality Control And Assurance Suppliers Audit Check List…Contd 1. Is there a QA department independent of production? 2. Is the QA manager responsible for the release of materials and products? 3. Are received materials intended for further processing inspected and tested by Quality control? 4. Are there defined (written) test methods to verify the compliance of the materials and products to specifications? 5. Are there adequate specifications, sampling plans and classification of defects? 6. Do records indicate the final disposition of materials of material by the facility? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

27. Suppliers Audit Check List…Contd Quality Control And Assurance…Contd 7. Are reference samples of materials and products retained from each batch? 8. Are there instructions for the preparation of chemicals and solvents? 9. Are the instruments and weighing balances are regularly calibrated? 10. Is there a validation programme for equipments/instruments? 11. Is the status of each supplier reviewed at least once a year; based on defined principles? September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

28. Challenges • Shorten Pipelines (The Money Tied Up) • Remove Leaks (Wasted Money) • Speed The Flow (Reduced Lead-times And Improved Responsiveness) September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

29. Advantages of Supplier Development • Greater Operational Efficiency. • Greater Ability To Respond Rapidly To Market Requirements. • Quicker Implementation Of Design Changes. • More Stable Prices. • Decrease In Lead-times. • Low Stock-levels. • Less Bad & Damages. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

30. Materials Requirements Planning Flow Chart September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc Source : "CIM: Principles of Computer Integrated Manufacturing", Jean-Baptiste Waldner, John Wiley & Sons, 1992.

31. Safe Handling • Transport: • State Of Vehicles • Loading And Off Loading • Storage: • Temperature • Dry Items - Garri • Cool Room Items – Margarine • Cold Room Items – Dressed Chicken September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

32. Safe Handling…Contd • All Food Has A Limited Shelf Life • The Shelf Life Varies On • The Type Of Food, • How It Is Packaged And • How Carefully It Is Stored. • To Maintain Maximum Quality For Food • Store Perishable And Non Perishable Food Well September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

33. Safe Handling…Contd • Perishable Food Includes • Fruits And Vegetables, • Fresh Meat, • Foods Purchased From Chill Cabinets, • Freshly Cooked Food Stored To Be Used Later Etc. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

34. Safe Handling…Contd Cold Storage • Cold Storage Can Substantially Reduce The Rate At Which Food Will Deteriorate. • Low Temperatures Slow Down The Growth Of Microorganisms And • The Rate Of Chemical (Including Enzymic) Changes In Food. • These Are Two Of The Main Causes Of Food Spoilage. • Different Cold Storage System Will Operate At Different Temperatures. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

35. Safe Handling…Contd Cold Storage Maximising Shelf Life • The First Step Is To Check That The Cold Storage Facilities Are Operating Correctly • To Do This You Should Use A Thermometer. • Your Thermometer Should Show A Temperature Between -18oC– 5oC Depending On The Type Employed • Avoid Crowding Stored Products • Ensures Good Air Circulation Around Each Item September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

36. Safe Handling…Contd Benefits Of Good Storage • Keeps Food In Good Condition • Keeps Food Safe From The Growth Of Food Poisoning Bacteria • It Reduces Wastes September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

37. Safe Handling…Contd • Arrangement • FEFO • Use Of Pallets – All Items Must Be Palletized • Stacking – Items Must Never Touch Walls And Ceilings • Labeling – Items Must Be Properly Identified And Related Items Stored Together September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

38. Safe Handling…Contd • Status Labels: • Red – Failed / Reject • Yellow / Amber – Hold / WIP • Green – Passed • Checks / Analysis To Be Done • Physical • Chemical • Microbiological September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

39. Safe Handling…Contd • Personnel : • Appropriate Clothing • Hand Washing • Documentation • GMP • Training September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

40. Safe Handling…Contd • Examples: • Tin Items – Date Markings, No Rust, Swelling, Bulges, Dents, Etc • Vegetable And Fruits – Freshness, Colour, Wholesomeness, No Mold Growth, No Withering • Flour – Colour, Appearance, No Extraneous Matter, No Weevils Etc September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

41. Safe Handling…Contd Eggs • Eggs Should Be Stored In The Refrigerator • Or At Least An Air Conditioned Environment. • This Will Maintain Egg Quality And • Considerably Lengthen Storage Life. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

42. Safe Handling…Contd Eggs • Store In A Way To Reduce Moisture Loss Through The Shell • Eggs Shelf Life Is Determined By The Storage Temperatures During Distribution. • Depending How Long The Eggs Have Been Stored At Room Temperature, The Potential Shelf Life Will Be Affected. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

43. Safe Handling…Contd Raw meat, Poultry And Sea Foods • The Term `Meat' Includes Beef, Lamb, Pork, Etc. • They Should Be Stored Frozen • Wrapped Fresh Meat Can Be Kept Safely For Up To Three Days And Unwrapped Fresh Meat Up To Five Days At Cold Temperatures, 0° To 3°C. • Fish bruises easily, so handle carefully. Lift whole fish with two hands and avoid holding by the tail. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

44. Safe Handling…Contd Raw meat, Poultry And Sea Foods • Physically Inspect The Chicken Before Purchasing. • Its Skin Should Be Creamy White To Deep Yellow; • Meat Should Never Look Gray Or Pasty. • Odours Could Signal Spoilage. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

45. Safe Handling…Contd Fresh Fruit And Vegetables • Handle Them Carefully To Avoid • Bruising And • Breakages Of The Skin. • Which Will Encourage Deterioration And Rotting. • Mostly Temperature Sensitive • Should Stored In The Coolest Part In The Store If Refrigerated Space Is Not Available September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

46. Safe Handling…Contd Fresh Fruit And Vegetables • Some Produce Such as Pineapple And Bananas, Are Chill Sensitive • They should not be Stored In The Refrigerator. September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

47. Safe Handling…Contd Fresh Fruit and Vegetables…Contd • To Reduce Shriveling Or Wilting Due To Water Loss • Keep Leafy And Root Vegetables, E.G. Lettuce, Cabbage, Carrots And Cucumber In: • Perforated Plastic Bags, • Preferably In The Chiller (Industrial). • Lettuce, a cool-season vegetable, is extremely sensitive to high temperatures September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

48. Safe Handling…Contd Fresh Fruit and Vegetables…Contd • Keep Potatoes • In A Cool, Dark, Well Ventilated Space • To Avoid `Greening' And Sprouting; • Remove From Jute Sacs And • Spread In A Well Ventilated Wire Or • Wooden Bin / Racks. • They Should Be Firm And Free From Blemishes • Never Refrigerate Potatoes • Can Cause Dark Spots September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

49. Safe Handling…Contd Fresh Fruit And Vegetables..Contd • Tomatoes May Be Stored In The Refrigerator / Chiller • Though They Will Gradually Lose Flavors And Some Soft Areas May Develop • Tomatoes When Fully Ripe • Dark Red Or Orange In Appearance, • Is Slightly Soft, • Has A Uniform Skin Color • And Smells Like A Tomato September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc

50. Safe Handling…Contd Fresh Fruit And Vegetables..Contd • To Reduce Mould Growth In Onions And Whole Pumpkin, • Store At Room Temperature Under Dry Conditions, • In A Net Or Loose Wire Mesh September, 2012 Folawe Adewakun H-QEHS Tantalizers Plc