The Impact of an Auditable Quality Management System

The Impact of an Auditable Quality Management System in a Grain Elevator Application Iowa Grain Quality Initiative Advisory Committee Meeting: 1/12/07 Chad Laux Industrial and Agricultural Technology Program Dr. Charles Hurburgh, Jr. Major Professor

Outline Farmer’s Cooperative l Results of QMS in Quality Control l FDA Bioterror Act l FC Mock Recall Results l

Farmers Cooperative Company l Northwest Iowa Company l Over $400 million in sales l 50 locations and growing l 350+ employees l Departments: Grain, Agronomy, Feed, Seed, Admin. , Accounting Source: FC, 2006

Problem Statement l l l With the adoption of QMS, how has it impacted Farmer’s Cooperative operations? What measurements would provide evidence so FC may proceed with other location implementations? Inquiry focused on company processes which directly affect grain preservation and handling

Core Farmer’s Cooperative Co. Processes: ISO Defined l Processes which transform the end product in ISO structure 7. 2. 1 Order Processing for Gain Shipments Shipping 7. 4. 3 Verification of Purchased Product Receiving 7. 5. 1 Control of Operations-Loading Order Shipping 7. 5. 1 Control of Operations-Release & Post Shipping 7. 5. 3 Identification and Tracking- Grain Identification and Tracking All 3 7. 5. 3 Identification and Tracking-Inspection and Grading Storage 7. 5. 5 Preservation of Grain-Handling and Preservation Storage 7. 5. 5 Preservation of Grain-Storage Areas Storage 7. 5. 5 Preservation of Grain-Bulk Grain Shipping Storage 8. 2. 4 In-process Inspections Storage 8. 2. 5 Final Inspection Storage 8. 3. 1 Control of Nonconforming Grain Shipping

Statistical Process Control - Grain Grading l Farmers Coop has been grading the same grain samples that were also graded by an official inspector – Matching the precision of the official inspectors

Research Model & Hypothesis ØGrain quality for shipment is improved when QMS procedures are adopted ØFC/FGIS/customer comparisons of same sample: ØCorn Moisture - Content Instrument Factor ØCorn Damage - Visual Judgment Factor ØSmaller Difference is Better! ØComparison of: ØQMS locations vs. non-QMS locations ØLocations before and after QMS implementation

Moisture Content Absolute Mean Difference All Locations w/ SEM’s shown n=218 n=279 n=15087

Moisture Content Absolute Mean Difference – Location 1 Before and After AIB/QSE Adoption w/ SEM’s shown n=218 n=2924

Moisture Content Absolute Mean Difference – Location 2 Before and After QMS Adoption w/ SEM’s shown N=279 N=2864

Total Points % Damage Absolute Mean Difference All Locations w/ SEM’s shown n=79 n=110 n=5303

Total Points % Damage Absolute Mean Difference– Location 1 Before and After AIB/QSE Adoption w/ SEM’s shown n=79 n=1197

Total Points % Damage Absolute Mean Difference – Location 2 Before and After QMS Adoption w/ SEM’s shown n=110 n=1637

Conclusions l QMS positively impacted FC operations through improved product quality of shipped grain. – Better resource management => Better quality control l There was no difference in quality where the basis of determination was instrumentation. (moisture content) – Process control through calibration l BPM is a suitable model of inquiry for research of ISO results in organizations

How to Meet the FDA Bioterrorism Act: An Elevator Case Study of Tracking Commodity Grain Using ISO 9000

Bioterrorism Act of 2002 l l l FDA Mandate of ‘one up-one down’ traceability by 6/06 (sliding scale based on size) Protection of food supply Legislation – Registration – Section 305 – Recordkeeping & maintenance – Title III, Section 306 – FDA expects documentation to be mode of traceability l Produce information upon official investigation Unfunded mandate l Note: Traceability a requirement of ISO certification l

Product Traceability Research Questions: Does a QMS facilitate traceability in commodity grain elevator operations? l Does the traceability system meet FDA guidelines for traceability under the Bioterrorism Act? l

Methodology Traceability/safety training conducted at 21 QMS/non-QMS locations l Mock recalls conducted at locations to measure of training effectiveness (ISO requirement) l Devin Mogler (QMS Intern) conducted recalls per FC ISO Procedure for Recalling Commodity Grain l

Recall Summary Results

Distribution of Recall Duration

Discussion and Conclusions l Audited FC results per FDA rules: – QMS traceability is adequate to meet FDA mandate – Wide variation in duration of recalls – Wide variation in precision i. e. lot size

Recommendations l l l l Trace from back to front in next round of recalls Follow through on multi-site recalls Improve internal communication – reduce lag time Use older scale tickets in recalls – will test system more thoroughly Collect all sources in bin, railcar assignments – indicator of precision (index) Use controlled documents for recalls – ‘traceable’ documents required Launch CAR’s on failed recalls – close the loop Decide on lot sizes – operations issue

Final Steps l l Impact of ISO on Quality and Quantity (Inventory mgmt. ) on grain Key process with management measures on performance imbedded in QMS system: – 8. 2. 4 – Monitoring and measurement of product – 8. 3 – Control of non-conforming product – 8. 5. 2 – Corrective and preventive action l Final Defense and graduate by Aug. 2007