Raw Material Approval and Private Label Customers
We have a customer that is not under a co-packing arrangement, but a private label/custom blending arrangement with our facility. We purchase the raw materials from our approved suppliers, verify and validate the entire process, and simply place their label on the product as we make it. Our customer is asking to be the green light/red light for ingredients as they are received in terms of "supplier approval" or rather, ingredient approval. We feel this is cumbersome, and also not within the scope of the contract, as well as outside of any SQF or GFSI compliance mechanism. I feel if they are not purchasing the raw materials, they cannot supersede our QMS with their own approval/rejection. Does anyone have any suggestions or thoughts on this??
Ultimately this is a business decision AND they are still your customer regardless of the arrangement
Under SQF you're required to have a risk assessment for all your vendors, so you probably (or should) already have some sort of equivalent to red light- green light
We do a bunch of private label and I wouldn't do that for a customer, but it depends. We own all the formulations, so it's their product, but our formula. We don't sell the formula to others, but they can't tell us what to do either. If they want to go elsewhere they can, but they can't have the formulation to take with them. In general terms for such things, our certifications have to be enough for the customer, and I don't share any NC's with customers, or any other info. We're either certified or we're not, and if we are, that's going to have to be good enough for them.
Now I DO let customers have input on developing formulations and which ingredients they want to use, and if they're buying enough product I'll even bring in special ingredients for them, as long as they don't interfere with my operations. For instance, I stack my allergens. I have 4 allergens in my building. If I'm making something for you, it is going to contain all those allergens, whether it needs it in there or not, and I will not under any circumstance add a new allergen to my facility.
Like Sir Scampi said, they're your customer, and you have to decide what that means to you. I had a customer just this week that wanted to buy something from me, but wanted to make the process a pita. We told them here's the product, take it or leave it. Their business wasn't important enough to me to jump through their hoops. They ended up buying anyway, but in my experience drawing a line in the sand with customers will more often than not call their bluff...
Ultimately this is a business decision AND they are still your customer regardless of the arrangement
Under SQF you're required to have a risk assessment for all your vendors, so you probably (or should) already have some sort of equivalent to red light- green light
Yes, as I mentioned above, we have a thorough risk-based supplier verification program, as well as ingredient verification. That is part of the confusion and rub... they want to have an additional step, where they observe COA's from suppliers for ingredient lots, and then give an "approval for use." If they were purchasing the materials, I feel I would think differently. Also, the ingredient lots are enormous, and I'm unclear what we would do if it was a dedicated ingredient, we approved it, and they did not. (dedicated meaning we only use it for them).
Ah---that changes everything
What is it worth to the company $$$$$$$$ or $$
it better be $$$$$$$$$$$$$$$ or it won't be worth the headache--and this is going to cause massive headaches with production in particular
They should just be approving you, their contract manufacturer, to make their product. They should just be reviewing your approved supplier process and determining that it is adequate. They shouldn't have the authority to green light those ingredients. It's YOUR responsibility - not theirs. What if they green-lighted something you would have rejected?
I have attached some excerpts from the FSPCA textbook for Preventive Controls for Human Foods. That will back up you up.