Unit 1 Basic concepts of plant layout and design with special references to food process industries.

Application of HACCP concept, ISO, FPO and MPO requirements in food plant layout design Definition and objectives Plant layout means the disposition of the various facilities (equipments, material, manpower etc.) within the areas of the site selected. Plant layout begins with the design of the factory building and goes up to the location and movement of work. All the facilities like equipment, raw material, machinery, tools, fixtures, workers etc. are given a proper place. In the words of James Lundy, It identically involves the allocation of space and the arrangement of equipment in such a manner that overall cost are minimized. According to MoNaughton Waynel, A good layout results in comforts, convenience, appearance, safety and profit. A poor layout results in congestion, waste, frustration and inefficiency. Plant layout is very complex in nature as it involves concept relating to such fields as engineering, architecture, economics and business administration. Hence a plant layout, with proper design, encompasses all production and service facilities and provides for the most effective utilization of men, with materials and machines constituting the process, is a master blue print for coordinating all operations. Objectives of a Good Plant Layout The principal objective of a proper plant layout is to maximize the production at the minimum of the costs. This objective should be kept in mind while designing a layout for a new plant as well as while making the necessary changes in the exiting layout in response to change in management polices and processes and techniques of production with the production system, i.e. workers, supervisors and managers. If a layout is to fulfill this goal, it should be planned with the following clear objectives in mind.

There is the proper utilization of cubic (i.e. length, width and height). Maximum use of volume available should be made. For example, conveyors can be run above head height and used as moving work in progress or tools and equipments can be suspended from the ceiling. The principle is particularly true in stores where goods can be stored at considerable height without inconvenience.

Waiting time of the semi-finished products is minimized. Working conditions are safer, better (well ventilated rooms etc.) and improved Material handling and transportation is minimized and efficiently controlled. For this , one has to consider the movement distances between different work areas as well as the number of times such movements occur per unit period of time.

The movements made by the worker are minimized. Suitable spaces are allocated to production centers. Plant maintenance is simpler.

There is increased flexibility for changes in product design and for future expansion. It must be capable of incorporating, without major changes, new equipment to meet technological requirement or to eliminate waste.

A good layout permits material to move through the plant at the desired speed with the lowest cost. There is increased productivity and better product quality with reduced capital cost. Boosting up employee morale by providing employee comforts and satisfaction. The work should be so arranged the there is no difficulty in supervision, coordination and control. There should be no hiding-places into which goods can be mislaid. Goods raw materials and ready stocks must be readily observed at all times. It will reduce the pilferage of material and labour. It should be noted here that the above stated objectives of plant layout are laudable in themselves; it is often difficult to reconcile all of them in a practical situation. And as such, the highest level of skill and judgment are required to be exercised. For this, close association between the entrepreneurs and experienced engineers is a must. Factors influencing plant layouts The location of the plant can have a crucial effect on the overall profitability of a project, and the scope for future expansion. Many factors must be considered when selecting a suitable plant site. The principal factors are: Location, with respect to the marketing area Raw material supply Transport facilities Availability of labor Availability of suitable land Availability Of Utilities: Water, Fuel, Power. Environmental impact and effluent disposal Local community consideration Climate Political and strategic consideration Marketing Area For Materials That Are Produced In Bulk Quantities: Such As Cement, Mineral Acids And Fertilizers, Where The Cost Of The Product Per Ton Is Relatively Low And The Cost Of Transport A Significant Fraction Of The Sales Price, The Plant Should Be Located Close To The Primary Market. This Consideration Will Be Less Important For Low Volume Production, HighPriced Products; Such As Pharmaceuticals. In An International Market, There May Be An Advantage To Be Gained By Locating The Plant Within An Area With Preferential Tariff. The location of the plant can be suitably selected depending on the availability of the product in that area. If the market is close by the plant the transportaion costs can be

reduced to a large extent. Since the product is a solid the cost of transportation has to done using trucks. If the customer is very close to the plant the product can be transported using conveyers.. Raw Materials The Availability And Price Of Suitable Raw Materials Will Often Determine The Site Location. Plants Producing Bulk Chemicals Are Best Located Close To The Source Of The Major Raw Material; Where This Is Also Close To The Marketing Area. Soda Ash Plant Should Be Located Near The Salt Lakes Or Near Sea, Where Sodium Chloride Is Available Abundantly. Transport The Transport Of Materials And Products To And From Plant Will Be An Overriding Consideration In Site Selection. If Practicable, A Site Should Be Selected That Is Close At Least Two Major Forms Of Transport: Road, Rail, Waterway Or A Seaport. Road Transport Is Being Increasingly Used, And Is Suitable For Local Distribution From A Central Warehouse. Rail Transport Will Be Cheaper For The Long-Distance Transport Of Bulk Chemicals. Air Transport Is Convenient And Efficient For The Movement Of Personnel And Essential Equipment And Supplies, And The Proximity Of The Site To A Major Airport Should Be Considered. Availability Of Labour Labour Will Be Needed For Construction Of The Plant And Its Operation. Skilled Construction Workers Will Usually Be Brought In From Outside The Site, But There Should Be An Adequate Pool Of Unskilled Labour Available Locally; And Labour Suitable For Training To Operate The Plant. Skilled Tradesmen Will Be Needed For Plant Maintenance. Local Trade Union Customs And Restrictive Practices Will Have To Be Considered When Assessing The Availability And Suitability Of The Labour For Recruitment And Training. Utilities (Services) The Word Utilities Is Now Generally Used For The Ancillary Services Needed In The Operation Of Any Production Process. These Services Will Normally Be Supplied From A Central Facility; And Will Include: - Power Required For Electrochemical Processes, Motors, Lightings, And General Use - The Steams Required For The Process Are Generated In The Tube Boilers Using Most Economic Fuel. - Natural And Forced Draft Cooling Towers Are Generally Used To Provide The Cooling Water Required On Site. - The Water Required For The General Purpose Will Be Taken From Local Water Supplies Like Rivers, Lakes And Seas. Because Of This Reason All The Plants Located On The Banks Of River. - Dematerialized Water, From Which All The Minerals Have Been Removed By Ion-Exchange Is Used Where Pure Water Is Needed For The Process Use, In Boiler Feed Water. - Refrigeration Is Needed For The Processes, Which Require Temperatures Below That Are Provided By The Cooling Water. -Gas Supplies.

- In An Ethylene Oxide Plant Compressed Air Is One Of The Raw Materials. It Is Also Needed For Pneumatic Controllers Etc. - Facilities Must Be Provided For The Effective Disposal Of The Effluent Without Any Public Nuisance. Environmental Impact, And Effluent Disposal All Industrial Processes Produce Waste Products, And Full Consideration Must Be Given To The Difficulties And Coat Of Their Disposal. The Disposal Of Toxic And Harmful Effluents Will Be Covered By Local Regulations, And The Appropriate Authorities Must Be Consulted During The Initial Site Survey To Determine The Standards That Must Be Met. Local Community Considerations The Proposed Plant Must Fit In With And Be Acceptable To The Local Community. Full Consideration Must Be Given To The Safe Location Of The Plant So That It Does Not Impose A Significant Additional Risk To The Community. Land (Site Considerations) Sufficient Suitable Land Must Be Available For The Proposed Plant And Future Expansion. The Land Should Be Ideally Flat, Well Drained And Have Load-Bearing Characteristics. A Full Site Evaluation Should Be Made To Determine The Need For Piling Or Other Foundations. Climate Adverse Climatic Conditions At Site Will Increase Costs. Abnormally Low Temperatures Will Require The Provision Of Additional Insulation And Special Heating For Equipment And Piping. Stronger Locations Will Be Needed At Locations Subject To High Wind Loads Or Earthquakes. Political And Strategic Considerations Capital Grants, Tax Concessions, And Other Inducements Are Often Given By Governments To Direct New Investment To Preferred Locations; Such As Areas Of High Unemployment. The Availability Of Such Grants Can Be The Overriding Consideration In Site Selection. The following are some important factors, which influence the planning of effective layout to a significant degree. 1. Nature of the product: The nature of the product to be manufactured will significantly affect the layout of the plant. Stationary layout will be most suitable for heavy products while line layout will be best for the manufacture for the light products because small and light products can be moved from one machine to another very easily and, therefore, more attention can be paid to machine locations can be paid to machine locations and handling of materials. 2. Volume of production: Volume of production and the standardization of the product also affect the type of layout. If standardized commodities are to be manufactured on large scale, line type of layout may be adopted. 3. Basic managerial policies and decisions: The type of layout depends very much on the decisions and policies of the management to be followed in producing the commodity with regard to the size of plant, kind and quality of the product, scope for expansion to be provided for, the extent to which the plant is to be integrated, amount of stocks to be carried at anytime, the kind of employee facilities to be provided etc.

4. Nature of plant location: The size shape and topography of the site at which the plant is located will naturally affect the type of layout to be followed in view of the maximum utilization of the space available .For e.g., if a site is near the railway line the arrangement of general layout for receiving and shipping and for the best flow of production in and out the plant may be made by the side of the railway lines .If space is narrow and the production process is lengthy, the layout of plant may be arranged on the land surface in the following manner:

5. Type of industry process: This is one of the most important factors influencing the choice of type of plant layout. Generally the types of layout particularly the arrangement of machines and work centers and the location of workmen vary according to the nature of the industry to which the plant belongs. For the purpose of lay out, industry may be classified into two broad categories: (i) Intermittent and (ii) continuous. Intermittent type of industries is those, which manufacture different component or different machines. Such industries may manufacture the parts, when required according to the market needs. Examples of such industries are shipbuilding plants. In this type of industry functional layout may be the best. The second type of industry in continuous industry. in this type of industry raw material are fed at one end and the finished goods are received at another end. A continuous industry may either be analytical or synthetic . A analytical industry breaks up the raw material into several parts during the course of production process or changes its form, e.g. oil and sugar refineries. A synthetic industry on the other hand mixes the two or more materials to manufacture one product along with the process of production or assembles several parts to get finished product. Cement and automobiles industries are the examples of such industry. Line layout is more suitable in continuous process industries. 6. Types of methods of production: Layout plans may be different according to the method of production proposed to be adopted. Any of the following three methods may be adopted for production- (1) Job order production, (2) batch production, and (3) mass production. Under job production goods are produced according to the orders of the customers and therefore, specification vary from customer to customer and the production cannot be standardized. The machines and equipment can be arranged in a manner to suit the need of all types of customers. Batch production carries the production of goods in batches or group at intervals. In this type of manufacturing the product is standardized and production is made generally in anticipation of sales. In such cases functional or process layout may be adopted. In case of mass production of standardized goods, line layout is most suitable form of plant layout. 7. Nature of machines: Nature of machines and equipment also affects the layout of plants. If machines are heavy in weight or create noisy atmosphere, stationery layout may reasonably be

adopted. Heavy machines are generally fixed on the ground floor. Ample space should be provided for complicated machines to avoid accidents. 8. Climate: Sometimes, temperature, illumination and air are the deciding factors in the location of machines and their establishments. For example, in lantern manufacturing industry, the spraypainting room is built along the factory wall to ensure the required temperature control and air expulsion and the process of spray painting may be undertaken. 9.Nature of material: Design and specification of materials, quantity and quality of materials and combination of materials are probably the most important factors to be considered in planning a layout. So, materials storage, space, volume and weight of raw materials, floor load capacity, ceiling height ,method of storing etc. should be given special consideration. This will affect the space and the efficiency of the production process in the plant. It will facilitate economic production of goods and prompt materials flow and soundly conceived materials handling system. 10. Type of machine: Machines and equipment may be either general purpose or special purpose. In addition certain tools are used. The requirements of each machine and equipment are quite different in terms of their space; speed and material handling process and these factors should be given proper consideration while choosing out a particular type of layout. This should also be considered that each machine and equipment is used to its fullest capacity because machines involve a huge investment. For instance, under product layout, certain machines may not be used to their full capacity so care should be taken to make full use of the capacity of the machines and equipment. 12.Human factor and working conditions: Men are the most important factor of production and therefore special consideration for their safety and comforts should be given while planning a layout, specific safety items like obstruction-free floor, workers not exposed to hazards, exit etc. should be provided for. The layout should also provide for the comforts to the workers such as provision of rest rooms, drinking water and other services etc. sufficient space is also to be provided for free movement of workers. 13. Characteristics of the building: Shape of building, covered and open area, number of storeys, facilities of elevators, parking area and so on also influence the layout plan. In most of the cases where building is hired, layout is to be adjusted within the spaces available in the building. Although minor modification may be done to suit the needs of the plants and equipment. But if any building is to be constructed, proper care should be given to construct it according to the layout plan drawn by experts. Special type of construction is needed to accommodate huge or technical or complex or sophisticated machines and equipment. The economic construction and operation of a process unit will depend on how well the plant equipment specified on the process flow sheet and laid out. The principal factors to be considered are: Economic consideration: construction and operation cost. The process requirement Convenience of operation convenience of maintenance Safety, Future expansion and Modular construction

COSTS: The cost of construction can be minimized by adopting a layout that gives shortest run of connecting pipes between equipment, and adopting the least amount of structural steel work. However, this will not necessarily be the best arrangement for operation and maintenance. PROCESS REQUIREMENT: All the required equipments have to be placed properly within process. Even the installation of the auxiliaries should be done in such a way that it will occupy the least space. An example of the need to take into account process consideration is the need to elevate the base of columns to provide the necessary net positive suction head to a pump or the operating head for a thermosyphon reboiler. OPERATION Equipment that needs to have frequent operation should be located convenient to the control room. Valves, sample points, and instruments should be located at convenient position and height. Sufficient working space and headroom must be provided to allow easy access to equipment. MAINTENANCE Heat exchangers need to be sited so that the tube bundles can be easily withdrawn for cleaning and tube replacement. Vessels that require frequent replacement of catalyst or packing should be located on the outside of buildings. Equipment that requires dismantling for maintenance, such as compressors and large pumps, should be placed under cover. SAFETY Blast walls may be needed to isolate potentially hazardous equipment, and confine the effects of an explosion. At least two escape routes for operator must be provided from each level in the process building. PLANT EXPANSION Equipment should be located so that it can be conveniently tied in with any future expansion of the process. Space should be left on pipe alleys for future needs, service pipes oversized to allow for future requirements. MODULAR CONSTRUCTION: In recent years, there has been a move to assemble sections of the plant at the manufacturer site. These modules will include the equipment, structural steel, piping and instrumentation. The modules then transported to the plant site, by road or sea. The advantages of modular construction are: Improved quality control. Reduced construction cost. Less need for skilled labour on site. Some of the disadvantages are: Higher design costs & more structural steel work. More flanged constructions & Possible problems with assembly, on site.

The Plant Layout KEYWORDS 1. Raw material Storage 2. Product Storage 3. Process Site 4. Laboratories 5. Workshop 6. Canteen & Change house 7. Fire Brigade 8. Central Control Room 9. Security office 10. Administrative Building 11. Site for Expansion Project. 12. Effluent treatment plant 13. Power house 14. Emergency water storage 15. Plant utilities A detailed plant layout is drawn and submitted with this thesis report. This plant layout is just a reference plant layout. There may be a lot of changes in actual plant layout SITE LAYOUT

A food plant should essentially contain the following units. workshop

rking Lot

Techniques or tools used for the design of good plant layouts In designing or improving the plan of plant layout, certain techniques or tools are developed and are in common use today. The below techniques and tools are used for the planning of layout for the new plant.The techniques or tools are as follows: 1. Charts and diagrams: In order to achieve work simplification, production engineers make use of several charts and diagrams for summarizing and analyzing production process and procedure. These include

Operation process chart: It subdivides the process into separate operations and inspection. When a variety of parts and products are manufactured which follow a different path across several floor areas, an operation process chart may be necessary for the important material items or products. The flow lines of the charts indicate the sequence of all operation in the manufacturing cycle.

Flow process chart: This chart is the graphic summary of all the activities taking place on the production floor of an existing plant. By preparing this type of chart, it can be found out as to where operations can be eliminated , rearranged, combined, simplified or subdivided for greater economy.

Process flow diagram: The diagram is both supplement and substitute of process flow chart. It helps in tracing the movement of material on a floor plan or layout drawing. A diagram may be drawn to scale on the original floor plan to show the movement of work. It is a good technique to show long materials hauls and backtracking of present layouts, thereby indicating how the present layout may be improved. Colored lines can show the flow of several standards products. Layouts, there by indicate how the present layout may be improved. Colored lines can show the flow of several standard products. This diagram can be used to analyze the effectiveness of the arrangement of the plant activities, the location of specific machines, and the allocation of space. It shows how a more logical arrangement and economical flow of work can be devised. 2. Machines data card: This card provides full information necessary for the placement and layout of equipment. The cards are prepared separately for each machine. The information generally given on these cards include facts about the machine such as capacity of the machines, scape occupied, power requirements, handling devices required and dimensions.

3. Templates: Template is the drawing of a machine or tool cut out from the sheet of paper. Cutting to scale shows the area occupied by a machine. The plant layout engineer prepares a floor plan on the basis of reel vent information made available to him. The template technique is an important technique because (i) it eliminates unnecessary handlings, (ii) minimize backtracking of materials, (iii) it makes the mechanical handling possible, (iv) it provides a visual picture of proposed or existing plan of layout at one place, (v) it offers flexibility to meet future changes in the production requirements. 4. Scale models: Though the two-dimensional templates are now in extensive use in the fields of layout engineering but it is not much use to executives who cannot understand and manipulate them .One important drawback of template technique is that it leaves the volume, depth, height and clearance of the machines to the imaginations of the reader of the drawing. These drawbacks of the template technique have been removed through the development of miniature scale models of machinery and equipment cast in metal. With scale models, it has now become possible to move tiny figures of men and machines around in miniature factory .The miniature machines and models of material handling equipment are placed in a miniature plant and moved around in pawn on a chessboard. 5. Layout drawings: Completed layouts are generally represented by drawings of the plant showing wall, columns, stairways, machines and other equipments, storage areas and office areas. Manufacturing systems and the factors influencing its choice Production is a conversion function by which goods and services are produced. A typical production system comprises of three main components: Inputs, Transformation process and Output.

Inputs are men, materials, machines, instructions, drawings, and paper work and instructions. The Transformation Process involves operations, mechanical or chemical, to Change/convert inputs into outputs. It also includes activities that assist conversion, Output is goods and services (e.g. products, parts, paper work, served customers etc.) The combination of operations and activities stated above employed to create goods and services are known as manufacturing system. A manufacturing system therefore may be looked upon as an independent group of sub-systems, each sub-system performing a distinct function. Different sub-systems may perform different functions, yet they are inter-related and require to be unified to achieve overall objectives of the organization. Manufacturing system needs to interact with both internal and external environment. The internal environment is the combination of engineering, marketing, personnel and accounts activities whereas external environment comprises of customers, competitors, suppliers, labor unions etc. The selection of the manufacturing system is a strategic decision for most organizations since changes at a later date arc very expensive to make. The systems selected should be such that it can give the desired output, required quality and is cost-effective.

Factors influencing the choice of the manufacturing systems: There is no best manufacturing system for any product. The choice of the system depends on various circumstances but it must meet two basic objectives, namely:

It must be able to meet the specifications of the final product, and It must be cost effective The product specifications can be met by choosing the right technology but that is not always an easy task. Since stricter specifications add to the cost of the product, there is always a trade off between the desired specifications and the cost to achieve such specifications. For example, sophisticated injection moulding machines and high quality plastics can produce excellent dolls cheaply provided they are produced in volume. However, if their demand is limited, they may not be able to compete with home made dolls produced in small quantities and sold at a fraction of the price of the moulded version. Various factors which determine the choice of the manufacturing process are as follows: Effect of volume/variety: One of the major considerations in the process selection is the volume/variety of the products. High product variety require highly skilled labour, general purpose machines, detailed production planning and control system. On the other hand low product variety (i.e. one or few products produced in large volumes) enables the use of low skilled labor, highly automated mass production processes using special purpose machines and simple production planning and control systems.

Capacity of the plant: The projected sales volume is a major influencing factor in determining whether the firm should go in for intermittent or continuous process. Fixed costs are high for continuous process and low for intermittent process while variable costs are more for the intermittent process and less for continuous process. Intermittent process therefore will be cheaper to install and operate at low volumes and continuous process will be economical to use at high volume.

Flexibility: Flexibility implies the ability of the company to satisfy varied customers requirements. Flexibility and product variety are inter-related. If more variety is to be manufactured, the manufacturing facilities will have to be commonised and depending upon the volume, the extent of commonalities will require to be justified. Greater commonalities demands intermittent manufacturing which is associated with higher inventories, large manufacturing lead times and elaborate planning and control.

Lead time: Lead times more appropriately called delivery lead times expected by the customers (i.e. how soon the demand has to be met without losing on sales) is another major influencing factor in a competitive market. As a general rule, faster deliveries are expected in a competitive market. The product, therefore, may require to be produced to stock using principles of batch production/mass product

Efficiency: Efficiency measures the speed and the cost of the transformation process. Efficiency is the greatest when the product is mass producted. But to mass produce a product, greater sales volumes are required. Therefore, depending upon the sales volume, product variety will have to be considered and the process which will give the best efficiency in terms of machine and manpower utilization will have to be selected.

Environment: Environment brings in new technologies and forces the adoption of new process of manufacturing. For example, wooden furniture is gradually being replaced by metals and plastic. A furniture manufacturing unit will have to change its technology (i.e. change from one off production tobatch production) to fall in line with changing times. Similarly, as market preferences change due fashions or other reasons, the manufacturing process has to be changed accordingly. Locational decisions and factors governing plant locations Locational decisions generally arise when:

A new manufacturing (or servicing) unit is to be set up. Existing plant operations are difficult to expand due to poor selection of site earlier. The growth of the business makes it advisable to establish additional facilities in new territories. The product development has over weighted the advantages of the existing plant. There is emergence of new social (chronic labor problems) political (political instability or economic conditions that suggest a change in the location of the existing plant. The changes in the industrial Policy of the Government, favoring decentralizing and dispersal of industries to achieve overall development of the country, do not permit expansion of the existing plant. Factors governing plant location: Plant location studies are conducted in three phases:

General territory selection Community selection Site selection Proximity to market: Every company is in business to market and it can survive only if their product reaches the consumers on time and at the competitive price. The ratio of selling costs to sales generally increases with distance. Therefore, in the choice of location o the plant, the factor of proximity to the market is given the highest priority. Locating a plant nearer to the market is preferred if: The product is fragile. The product is susceptible to spoilage.

The promptness of service is required. The product is relatively inexpensive and transportation costs add significantly to the cost. Bread, soap factories, etc. require the market to be nearby. If the product is exported, location near ports is desirable. This is particularly important for producers who sell bulky commodities, which incur high transportation costs. Nearness to market not only lowers transportation costs but also gives many other benefits namely: A good many administrative problems, which cause perpetual headaches and add to costs, are avoided. Liaison with dealers or whole sellers can be maintained economically and easily Other costs such as commission to middlemen, which at times run as high as 20 to 50 percent can be reduced significantly. Customers accounts do not remain outstanding for settlement. This recovery is easy and less time saving which itself reduces selling costs. Proximity to source of raw materials: Since raw materials usually constitute 50 to 60 percent of the total product cost, it is important that the firm gets its requirements of raw materials at the right time and at the reasonable price for which the plant must be located in the neighborhood of some source which can meet the raw materials requirement of the unit Proximity to supply of raw materials factor assumes still greater importance if raw materials are of perishable nature or if they are expensive to transport, or if their weight is substantially reduced by processing. Proximity to sources of raw materials is equally important for small units. This is because usually small units are not considered important customers. They get least priority and in the event of scarcity are the one to be struck off first from the list. The availability of materials to small units to a large extent thus depends on their follow up and personal visits to the suppliers plant which is possible only if the buyers plant is close by. Infrastructure facilities: Infrastructure facilities consider availability of utilities like power water, disposal of waste etc. These form the life-blood of many types of industries without which there facilities may come to a stand still. Underestimating the need of any one of the utilities can be extremely costly and inconvenient. Certain industries, for example, aluminium, steel, etc are power intensive and must be located close to the sites of power generation failing which the shortage of, or increase in cost of generating power may spell problems for their survival. Similarly, chemical process industries like paper and pulp, cement, steel, sugar laundries, metal plating, food preparation etc. requires perennial source of water. Mineral content of water may also be an important factor. Treatment of water is an expense to be considered while comparing economics of different locations. Drainage facilities are important for process industries otherwise disposal of process waster can create lot of difficulties. Transport facilities: Transportation cost to the value added is a key determinant of the plant location. The structure of the transportation cost depends on (i) Characteristics of the commodity (ii) average distance of shipment (iii) medium of shipment: rail, road, and air sea. The need for transport arises because raw materials and fuel are to be moved to factory site and finished goods are to be transported from factory to markets. Other things being equal since

transport cost has a major effect on product cost, the regions well served by transport facilities are most suitable for industrial locations. Labor and wages: Plant location should be such that required labor is easily available in the neighborhood. Importing labor from outside is usually costly and it causes lot of administrative problems. Availability of required labor locally is better since problem of arranging accommodation and other related problems do not arise. Since normally workers with specific skills are required, some sort of training facility should also be available in the neighborhood. Skilled employees are easily available if ITIs, or Engineering colleges are there in the neighborhood. Legislation and taxation: The policies of the state Government and Local Bodies relating to issue of licenses, building codes, labor laws, etc. are the factors in selecting/rejecting a particular community/site. In order to disperse industries and ensure balanced economic growth, both Central and State government offer a package of incentives for setting up industries in particular locations. Exemption from excise duty, sales tax and octroi, soft loans from financial institutions, subsidy in electricity charges, etc. are some of the incentives offered. Since taxes and duties levied by the State Government and Local bodies substantially influence product cost, the incidence of such taxes/levies must be taken into account while selecting a community/site. Climatic conditions: Climatic factors may not have a major influence these days because of modern air conditioning facilities available today. However, it may be important factor for certain industries like textile mills, which require high humidity. Industrial and labor attitudes: Community attitudes towards supporting hostile trade union activities are an important factor. Locating facilities in a certain region/community may not be desirable as frequent labor problems and interruptions are harmful to the plant in the long run. Political situation in the state and attitude of the government towards labor activities also influences selection of the site for the plant. Safety requirement: Safety factor may be important for certain industries such as: Nuclear power plants and Explosive factories. Location of such industries close to border areas is undesirable. Community facilities (or social infrastructure): Community facilities imply accommodation, educational, entertainment and transport facilities. Accommodation is needed unless the employees are local residents. Accommodation should be easily available, comparatively cheap and near some public transport stop. The location area should be fully developed, be accessible by road and should have a convenient and efficient public transport system operating between the area and the township to enable employees, officials, customers and suppliers to make easy trips for their work Community attitudes: Community attitudes towards work (i.e. whether the people in the location are hard working or otherwise) as well as their attitudes towards the incoming entrepreneurs (helpful and cooperative or otherwise) can make or mar an industry. Location decisions, therefore, must take such factors also into account particularly while setting up laborintensive units. Supporting industries and services: Location factors should also include proximity of services needed by the firm. A firm desirous of getting some or all parts made from outside or some of the operations done from outside must see that such sub-contractors are located in the

neighborhood. Getting a job done from units located at far off places will mean not only additional transportation cost but also time consuming and costly. Also if units are too far off, the control on quality of work done by them cannot be exercised. Suitability of the land: Site selection should also take into account topography and soil structure of the land. The soil structure must be capable of bearing loads of foundations. Though modern building techniques can overcome the limitations of the soil, but if considerable improvement is required then selection of a low cost and may ultimately turn out to be expensive. Availability and cost of the land: Site size (Plot size) must be large enough to accommodate the present production facilities, parking and access facilities but also leave sufficient room for future expansion. As a general rule, a site five times the actual plant size is considered minimum for all these things including future expansion. Economy survey of the site selection: An ideal location is one where the cost of obtaining materials and processing them into finished product plus the cost of distributing the finished product to customers is minimum. One of the most commonly used approaches consists of following steps:

Prepare a list of all relevant factors. Estimate expenses on materials, transport, wages, power etc for each location on each of the above factors. Collect data on intangible factors like community facilities, community attitudes etc. Analyze the tangible data for each location and calculate rate of return on investment. Select provisionally a locational based on financial data. Compare the intangible data for the different locations and select the optimal location considering intangible data. Factors influencing exchange rates Foreign exchange rates are extremely volatile and it is incumbent on those involved with foreign exchange either as a purchaser, seller, speculator or institution to know what causes rates to move. Actually, there are a variety of factors market sentiment, the state of the economy, government policy, demand and supply and a host of others. The more important factors that influence exchange rates are discussed below:

Strength of the Economy :The strength of the economy affects the demand and supply of foreign currency. If an economy is growing fast and is strong it will attract foreign currency thereby strengthening its own. On the other hand, weaknesses result in an outflow of foreign exchange. If a country is a net exporter (as were Japan and Germany), the inflow of foreign currency far outstrips the outflow of their own currency. The result is usually a strengthening in its value.

Political and Psychological Factors: Political or psychological factors are believed to have an influence on exchange rates. Many currencies have a tradition of behaving in a particular way such as Swiss francs which are known as a refuge or safe haven currency while the dollar moves (either up or down) whenever there is a political crisis anywhere in the world. Exchange rates can also fluctuate if there is a change in government. Some time back, Indias foreign exchange rating was downgraded because of political instability and consequently, the external value of the rupee fell. Wars and other external factors also affect the exchange rate. For example, when Bill Clinton was impeached, the US dollar weakened. During the Indo-Pak war the rupee weakened. After the 1999 coup in Pakistan (October/November 1999), the Pakistani rupee weakened.

Economic Expectations : Exchange rates move on economic expectations. After the 1999 budget in India there was an expectation that the rupee would fall by 7% to 9%. Since such expectations affect the external value of the rupee, all economic data the balance of payments, export growth, inflation rates and the likes are analysed and its likely effect on exchange rates is examined. If the economic downturn is not as bad as anticipated the rate can even appreciate. The movement really depends on the market sentiment the mood of the market and how much the market has reacted or discounted the anticipated/expected information.

Inflation Rates: It is widely held that exchange rates move in the direction required to compensate for relative inflation rates. For instance, if a currency is already overvalued, i.e. stronger than what is warranted by relative inflation rates, depreciation sufficient enough to correct that position can be expected and vice versa. It is necessary to note that an exchange rate is a relative price and hence the market weighs all the relative factors in relative terms (in relation to the counterpart countries). The underlying reasoning behind this conviction is that a relatively high rate of inflation reduces a countrys competitiveness and weakens its abi lity to sell in international markets. This situation, in turn, will weaken the domestic currency by reducing the demand or expected demand for it and increasing the demand or expected demand for the foreign currency (increase in the supply of domestic currency and decrease in the supply of foreign currency).

Capital Movements : Capital movements are one of the most important reasons for changes in exchange rates. Capital movements of foreign currency are usually more than connected with international trade. This occurs due to a variety of reasons both positive and negative. When India began its economic liberalisation and invited Foreign Institutional Investors (FIIs) to purchase equity shares in Indian companies, billions of US dollars came into the country

strengthening the currency. In 1996 and 1997, FIIs took several billion US dollars out of the country weakening the currency. These were capital outflows. One of the reasons popularly believed for the rupee not depreciating in the manner other South-east Asian currencies did in 1997-98 was because the rupee was not convertible on the capital account.

Speculation : Speculation in a currency raises or lowers the exchange rate. For instance, the foreign exchange market in Kenya is very shallow. If a speculator enters and buys US $1 million, it will raise the value of the US dollar significantly. If a few others do so too, the price of the US dollar will rise even further against the Kenya shilling. The most famous speculator in foreign currency is Mr George Soros who made over a billion pounds sterling in Europe (by correctly predicting the devaluation of the pound) and then is believed to have triggered the free fall of the currencies of South-east Asia.

Balance of Payments : As mentioned earlier, a net inflow of foreign currency tends to strengthen the home currency vis--vis other currencies. This is because the supply of the foreign currency will be in excess of demand. A good way of ascertaining this would be to check the balance of payments. If the balance of payments is positive and foreign exchange reserves are increasing, the home currency will become stronger.

Governments Monetary and Fiscal Policies : Governments, through their monetary and fiscal policies affect international trade, the trade balance and the supply and demand for a currency. Increasing the supply of money raises prices and makes imports attractive. Fiscal surpluses will slow economic growth and this will reduce demand for imports and encourage exports. The effectiveness of the policy depends on the price and income elasticities of demand for the particular goods. High price elasticity of demand means the volume of a good is sensitive to a change in price. Monetary and fiscal policy support the currency through a reduction in inflation. These also affect exchange rate through the capital account. Net capital inflows supply direct support for the exchange rate. Central governments control monetary supply and they are expected to ensure that the governments monetary policy is followed. To this extent they could increase or decrease money supply. For example, the Reserve Bank of India, to curb inflation, restricted and cut money supply. In Kenya, the central bank in order to attract foreign money into the country is offering very high rates on its treasury bills. In order to maintain exchange rates at a certain price the central bank will also intervene either by buying foreign currency (when there is an excess in the supply of foreign exchange) and selling foreign currency (when demand for foreign exchange exceeds supply). This is known as central bank intervention. It must be noted that the objective of monetary policy is to maintain

stability and economic growth and central banks are expected to by increasing/decreasing money supply, raising/lowering interest rates or by open market operations maintain stability.

Exchange Rate Policy and Intervention: Exchange rates are also influenced, in no small measure, by expectation of change in regulations relating to exchange markets and official intervention. Official intervention can smoothen an otherwise disorderly market. As explained before, intervention is the buying or selling of foreign currency to increase or decrease its supply. Central banks often intervene to maintain stability. It has also been experienced that if the authorities attempt to half-heartedly counter the market sentiments through intervention in the market, ultimately more steep and sudden exchange rate swings can occur.

Interest Rates : An important factor for movement in exchange rates in recent years is interest rates, i.e. interest differential between major currencies. In this respect the growing integration of financial markets of major countries, the revolution in telecommunication facilities, the growth of specialised asset managing agencies, the deregulation of financial markets by major countries, the emergence of foreign trading as profit centres per se and the tremendous scope for bandwagon and squaring effects on the rates, etc. have accelerated the potential for exchange rate volatility. Kenya intrinsically has a very weak economy but the rates offered within the country have always been very high. To illustrate this point the treasury bill rate in September 1998 was as high as 23%. High interest rates attract speculative capital moves so the announcements made by the Federal Reserve on interest rates are usually eagerly awaited an increase in the same will cause an inflow of foreign currency and the strengthening of the US dollar.

Tariffs and Quotas : Tariffs and quotas exist to protect a countrys foreign exchange by reducing demand. Till before liberalisation, India followed a policy of tariffs and restrictions on imports. Very few items were permitted to be freely imported. Additionally, high customs duties were imposed to discourage imports and to protect the domestic industry. Tariffs and quotas are not popular internationally as they tend to close markets. When India lifted its barriers, several industries such as the mini steel and the scrap metal industries collapsed (imported scrap became cheaper than the domestic one). Quotas are not restricted to developing countries. The United States imposes quotas on readymade garments and Japan has severe quotas on non-Japanese goods.

Exchange Control : The purpose of exchange control is to manage the supply and demand balance of the home currency by the government using direct controls basically to protect it. Currency control is the restriction of using or availing of foreign currency at home/abroad.

In India, up to liberalization in the nineties there was very severe exchange control. Access to foreign currency was tightly controlled and the same was released only for permitted purposes. This was because Indian exports had not taken off and there were still large imports. There are several countries that maintain their rates at artificial levels such as Bangladesh. India is now fully, convertible on the current account but not as yet on the capital account. This, to an extent, possibly saved India when the run on currencies took place in Asia in 1997. If the Indian rupee was fully convertible and there were no exchange control restrictions, the rupee would have been open for speculation. There would have been large outflows at a time of concern resulting in a snowballing plunge in its value. As long as the par value system prevailed, the rates could not go beyond the upper and lower intervention points. The only real question under the fixed rate system was whether the balance of payments and foreign exchange reserves had deteriorated to such an extent that devaluation was imminent or possible. Countries with strong balance of payments and reserve positions were hardly called upon to revalue their currencies. Hence, a watch had to be kept only on deficit countries. However, under generalized floating regime, exchange rates are influenced by a multitude of economic, financial, political and psychological factors. But the relative significance of any of these factors can vary from time to time making it difficult to predict precisely how any single factor will influence the rates and by how much. Consumer behaviour and factors influencing buyer behavior Consumer behaviour is an attempt to understand & predict human actions in the buying role. It has assumed growing importance under market-oriented or customer oriented marketing planning & management. Consumer behaviour is defined as all psychological, social & physical behaviour of potential customers as they become aware of, evaluate, purchase, consume, & tell others about product & services.

Each element in this definition is important. Consumer behaviour involves both individual (psychological) processes & group (social processes). Consumer behavior is reflected from awareness right through post-purchase evaluation indicating satisfaction or non-satisfaction, from purchases Consumer behaviour includes communication, purchasing & consumption behaviour Consumer behaviour is basically social in nature. Hence social environment plays an important role in shaping buyer behaviour. Consumer behaviour includes both consumer & business buyer behaviour In consumer behaviour we consider not only why, how, & what people buy but other factors such as where , how often, and under what conditions the purchase is made. An understanding of the buyer behaviour is essential in marketing planning & programmes. In the final analysis buyer behaviour is one of the most important keys to successful marketing.

MAJOR FACTORS INFLUENCING BUYER BEHAVIOUR CULTURAL FACTORS Cultural factors exert the broadest and deepest influence on consumer behavior. The roles played by the buyers culture, sub culture and social class are particularly important.

CULTURE- Culture is the most fundamental determinant of a persons wants and behavior. The growing child acquires a set of values, perceptions, preferences, and behavior through his or hr family or other key institutions.

SUB-CULTURE- Sub-culture includes nationalities, religions, racial groups, and geographical regions. Many sub-cultures make up important market segments, and marketers often design marketing programs tailored to their needs.

SOCIAL CLASS- Social classes are relatively homogenous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests, and behavior. Social classes do not reflect income alone but also other indicators such as occupation, education, and area of residence. SOCIAL FACTORS

REFERNCE GROUPS- A Persons reference groups consist of all the groups that have a direct or indirect influence on the persons attitudes or behavior. Groups having direct influence on a person are called membership groups.

FAMILY- The family is the most important consumer buying organization in society, and has been researched extensively. Family members constitute the most influential primary reference group.

ROLE AND STATUSES- A persons position in each group that he participates throughout his life family, clubs, and organizations can be defined in terms of role and status. A role consist of activities that a person is expected to perform. Each role carries a status. Marketers are aware of the status symbol potential of products and brands. PERSONAL FACTORS A buyers decisions are also influenced by personal characteristics. These include the buyers age & stage in the life cycle, occupation, economic circumstances, lifestyle, personality & self concept.

AGE & STAGE IN THE LIFE CYCLE- People buy different goods & services over their lifetime. They eat baby food in the early years, most foods in the growing & mature years & special diets in the later years. Peoples taste in clothes, furniture & recreation is also age related.

OCCUPATION- A persons occupation also influences his or her consumption pattern. Marketers try to identify the occupational groups that have above average interest in their products and services. A company can even specialize its products for certain occupational groups.

ECONOMIC CIRCUMCTANCES- Product choices are greatly affected by ones economic circumstances. Economic stability consist of their spend able income (its level, stability andtime pattern), saving and assets (including the percentage that is liquid), debts , borrowing power, attitude toward spending versus saving.

LIFESTYLE- People coming from the same subculture, social class & occupation may lead quite different lifestyles. A persons lifestyles the persons pattern of living in the world as expressed in the persons activities, interests & opinions.

PERSONALITY AND SELF-CONCEPT- Each person has a distinct personality that influences his or her buying behavior. By personality, we mean a persons distinguishing psychological characteristics that lead to relatively consistent and enduring responses to his or her environment. Personality can be a useful variable in analyzing consumer behavior, provided that personality type can be classified accurately and that strong correlations exist between certain personality types and product or brand choices. PSYCHOLOGICAL FACTORS A persons buying choices are influenced by four major psychological factors-motivations, perception, learning, beliefs and attitudes.

MOTIVATION- A person has many needs at any given time. A need becomes motive when it is aroused to a sufficient level of intensity. Motivational researchers hold that each product is capable of arousing a unique set of motive in consumers.

LEARNING- When people act they learn. Learning involves changes in an individuals behavior arising from experience. Learning theory teaches marketers that they can build up demand for a product by associating it with strong drives, using motivating cues and providing positive reinforcement.

PERCEPTION- Perception is the process by which an individual selects, organizes, & interprets information inputs to create a meaningful picture of the world. A motivated person is ready to act. How the motivated person actually acts is influenced by his or her perception of the situation.

BELIEFS & ATTITUDES- A belief is a descriptive thought that a person holds about something. Through doing & learning, people acquire beliefs & attitudes. These in turn influence their buying behavior. Particularly important to global marketers is the fact that

buyers often hold distinct disbeliefs about brands or products based on their country of origin. An attitude is persons enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies towards some object or idea. People have attitude toward almost everything: religion, politics, clothes, music, food, and so on. Attitude put them into a frame of mind of liking or disliking an object , moving toward or away from it.

Factors influencing wage and salary structure of an organization The wage policies of different organization vary some what. Marginal units pay the minimum necessary to attract the required number of kind of labour. Often, these units pay minimum wage rates required by labour legislation, and recruit marginal labour. At the other extreme, some units pay well about going rates in the labour market. They do so to attract and retain the highest caliber of labour force. Some managers believe in the economy of higher wages. They feel that, by paying high wages, they would attract better workers who will produce more than average worker in the industry. This greater production per employee means greater output per man hour. Hence, labour costs may turn those existing in firms using marginal labour. Some units pay high wages because of a combination of a favorable product market demand, higher ability to pay and the bargaining power of trade union. But a large number of them seek to be competitive in their wage programme, i.e., they aim at paying somewhere near the going rate in the labour they employ. Most units give greater weight to two wage criteria, viz, job requirements and the prevailing rates of wages in the labour market. Other factors, such as changes in the cost of living the supply and demand of labour, and ability to pay are accorded a secondary importance. A sound wage policy is to adopt a job evaluation programme in order to establish fair differentials in wages based upon differences in job contents. Beside the basic factors provided by a job description and job evaluation, those that are usually taken into consideration for wage and salary administration are:

The organizations ability to pay Supply and demand of labour The prevailing market rate The cost of living

Living wage Productivity Trade unions bargaining power Job requirements Managerial attitudes and Psychological and sociological factors Levels of skills available in the market The organizations ability to pay: Wage increases should be given by those organizations which can afford them. Companies that have good sales and, therefore, high profits tend to pay higher those which running at a loss or earning low profits because of higher cost of production or low sales. In the short run, the economic influence on the ability to pay is practically nil. All employers, irrespective of their profits or losses, must pay no less than their competitors and need to pay no more if they wish to attract and keep workers. In the long run, the ability to pay is important. During the time of prosperity, pay high wages to carry on profitable operations and because of their increased ability to pay. But during the period of depression, wages are cut because the funds are not available. Marginal firms and non profit organization (like hospitals and educational institutions) pay relatively wages because of low or non profits. Supply and demand of labour: The labour market conditions or supply and demand forces operate at the national, regional and local levels, and determine organizational wage structure and level. If the demand for certain skills is high and supply is low, the result is a rise in the price to be paid to these skills. When prolonged and acuter, these labour market pressures probably force most organizations to reclassify hard to fill jobs at a higher level that suggested by the job evaluation. The other alternative is to pay higher wages if the labour supply is scarce; and lower wages when it is excessive. Similarly, if there is a great demand for labour expertise, wages rise; but if the demand for manpower skill is minimal, the wages will be relatively low. The supply and demand compensation criterion is very closely related to the prevailing pay, comparable wage and on going wage concepts since; in essence, all of these remuneration standards are determined by immediate market forces and factors. Prevailing market rate: This is known as the comparable wage or going wage rate, and is the widely used criterion. An organization compensation policy generally tends to conform to the wage rate payable by the industry and the community. This is done for several reasons. First, competition demand that competitors adhere to the same relative wage level. Second, various government laws and judicial decisions make the adoption of uniform wage rates an attractive proposition. Third, trade union encourages this practice so that their members can have equal pay, equal work and geographical differences may be eliminated. Fourth, a functionally related firm in the same industry requires essentially the same quality of employees, with same skill and experience. This results in a considerable uniformity in wage and salary rates. Finally, if the same or about the same general rates of wages are not paid to the employees as are paid by the organizations competitors, it will not be able to attract and maintain the sufficient quantity and quality of manpower. Some companies pay on a high side of the market in order to obtain goodwill or to insure an adequate supply of labour, while other organizations pay lower wages

because economically they have to or because by lowering hiring requirements they can keep jobs adequately manned. The cost of living: The cost of living pay criterion is usually regarded as an automatic minimum equity pay criterion. This criterion calls for pay adjustments based on increases or decreases in an acceptable cost of living index. In recognition of the influence of the cost of living. escalator clauses are written into labour contracts. When the cost of living increases, workers and trade unions demand adjusted wages to offset the erosion of real wages. However, when living costs are stable or decline, the management does not resort to this argument as a reason for wage reductions. The living wage: Criterion means that wages paid should be adequate to enable an employee to maintain himself and his family at a reasonable level of existence. However, employers do not generally favor using the concepts of a living wage as a guide to wage determination because they prefer to base the wages of an employee on his contribution rather than on his need. Also, they feel that the level of living prescribed in a workers budge is open to argument since it is based on subjective opinion. Psychological and Social Factors: These determine in a significant measure how hard a person will work for the compensation received or what pressures he will exert to get his compensation increased. Psychologically, persons perceive the level of wages as a measure of success in life; people may feel secure; have an inferiority complex, seem inadequate or feel the reverse of all these. They may not take pride in their work, or in the wages they get. Therefore, these things should not be overlooked by the management in establishing wage rate. Sociologically and ethically, people feel that equal work should carry equal that wages should be commensurate with their efforts, that they are not exploited, and that no distinction is made on the basis of caste, color, sex or religion. To satisfy the conditions of equity, fairness and justice, a manageme nt should take these factors into consideration. Skill Levels Available in the Market: With the rapid growth of industries business trade, there is shortage of skilled resources. The technological development, automation has been affecting the skill levels at faster rates. Thus the wage levels of skilled employees are constantly changing and an organization has to keep its level up to suit the market needs Objectives and principles of a good plant layout Objectives of a good plant layout Only through an efficient layout, the organization can attain the following objectives:

Economy in handling of materials, work-in-process and finished goods. Minimization of product delays. Lesser work-in-progress and minimum manufacturing cycle time. Efficient utilization of available space. Easy supervision and better production control. Greater flexibility for changes in product design and for future expansion.

Better working conditions by eliminating causes of excessive noise, objectionable odor smoke etc. Principles of a good plant layout: Overall integration of factors: A good layout is one that integrates men, materials, machines and supporting activities and others in a way that the best compromise is obtained No layout can satisfy each and every principle of a good layout. Some criterion may conflict with some other criterion and as a result no layout can be ideal it has to integrate all factors into the best possible compromise. Minimum movement: A good layout is one that permits the minimum movement between the operations. The plant and machinery in case of product layout and departments in case of process layout should be arranged as per sequence of operations of most of the products.

Since straight line is the shortest distance between any two points, men and materials as far as possible should be made to move along the straight path A door may be made in a wall or a hole may be drilled in a ceiling if that eliminates or reduces material handling in place of stairs or a distant door. Uni-direction flow: A good layout is one that makes the materials move only in the forward direction, towards stage of completion, with any backtracking.

Since straight line is the shortest distance between any two, points, materials as far as possible should be made to move on the principle of straight-line flow. And when straight line flow is not possible, other flows like U-shaped flow, circular flow or zig zag flow may be adopted, but the layout may ensure that materials move in the forward direction.

To ensure forward flow, equipment if necessary may be duplicated. Effective use of available space: A good layout is one that makes effective use of available space both horizontal and vertical. Backtracking and duplicated movements consume more time, involve un-necessary materials handling, add to cost and lead to inefficiency. Raw materials, work-in-progress and finished goods should be piled vertically one above another rather than being strewn on the floor. Pallets or equivalents should be made use of to pile up several layers one above another. Area below the work tables or in the cupboards built into the wall are welcome since they reduce requirement of space. Maximum visibility: A good layout is one that makes men, machines and materials ready observable at all times.

All departments should be smoothly integrated, convenient to service and easy to supervise. Every piece of positioning or screening or partitioning should be scrutinized and carefully planned.

Special cupboards, enclosures, offices, partitions etc. should be avoided except when their utility is established beyond doubt. Maximum accessibility: A good layout is one that makes all servicing and maintenance point readily accessible.

Machines should be kept sufficiently apart and with reasonable clearance from the wall so that lubrication, adjustment and replacement of belts, removal of parts at the time of repairs etc can be done conveniently by the maintenance staff.

Area in front of electrical panels and fire extinguishers should be kept free from obstructions. Traditional Design Process

Facility Layout Planning Introduction. Plant layout planning includes decisions regarding the physical allocation of the economic activity centers in a facility. An economic activity center is any entity occupying space. The objective of plant layout planning is a more effective work flow at the facility, allowing workers and equipment being more productive. Facility layout techniques apply to the case where several physical means have to be located in a certain area, either industrial processes or services. The objective of the chapter is not only Plant layout but re-layout also (most common situation for a company). To carry out an appropriate plant layout, its important to take into account the business strategic and tactical objectives Example: space requirements/cost per m2 in Malls; accessibility/privacy in offices. To make a decision about layout planning, 4 different questions must have an answer: Which centers do we have to consider? How much space and capacity is required for each center? If there is not enough space, productivity may be reduced. Too much space is expensive and may also reduce productivity.

 How must the space be configured at each center? Space quantity, shape and the elements of the work center are related to each other. Where should each center be located at within the facility? The allocation of the different centers may affect productivity. The plant layout process starts at an aggregate level, taking into account the different departments. As soon as we get into the details, the different issues arise, and the original configuration may be changed through a feedback process. Most (if not all of them) layouts are designed properly for the initial conditions of the business, although as long as the company grows and has to be adapted to internal and external changes, a re-layout is necessary. The reasons for a re-layout are based on 3 types of changes: Changes in production volumes. Changes in processes and technology. Changes in the product. The frequency of the re-layout will depend on the requirements of the process. Symptoms that allow us to detect the need for a re-layout: Congestion and bad utilization of space. Excessive stock in process at the facility. Long distances in the work flow process. Simultaneous bottle necks and workstations with idle time. Qualified workers carrying out too many simple operations. Labor anxiety and discomfort. Accidents at the facility. Difficulty in controlling operations and personnel. Facility Layout Definition A facility layout is an arrangement of everything needed for production of goods or delivery of services. A facility is an entity that facilitates the performance of any job. It

may be a machine tool, a work centre, a manufacturing cell, a machine shop, a department, a warehouse, etc. (Heragu, 1997). The layout design generally depends on the products variety and the production volumes. Four types of organization are referred to, namely fixed product layout, process layout, product layout and cellular layout (Dilworth, 1996). Facility layout means planning: for the location of all machines, utilities, employee workstations, customer service areas, material storage areas, aisles, restrooms, lunchrooms, internal walls, offices, and computer rooms for the flow patterns of materials and people around, into, and within buildings infrastructure services such as the delivery of line communications, energy, and water and the removal of waste water all make up basic utilities. Develop an economical layout which will meet the requirements of: product design and volume (product strategy) Process equipment and capacity (process strategy) quality of work life (human resource strategy) building and site constraints (location strategy) A good layout requires: an understanding of capacity & space requirements selection of appropriate material handling equipment decisions regarding environment and aesthetics identification and understanding of the requirements for information flow identification of the cost of moving between the various work areas

Objectives of Plant Layout. The main objective consists of organizing equipment and working areas in the most efficient way, and at the same time satisfactory and safe for the personnel doing the work. Sense of Unity:The feeling of being a unit pursuing the same objective. Minimum Movement of people, material and resources.

 Safety:In the movement of materials and personnel work flow. Flexibility:In designing the plant layout taking into account the changes over short and medium terms in the production process and manufacturing volumes. These main objectives are reached through the attainment of the following facts: Congestion reduction. Elimination of unnecessary occupied areas. Reduction of administrative and indirect work. Improvement on control and supervision. Better adjustment to changing conditions. Better utilization of the workforce, equipment and services. Reduction of material handling activities and stock in process. Reduction on parts and quality risks. Reduction on health risks and increase on workers safety. Moral and workers satisfaction increase. Reduction on delays and manufacturing time, as well as increase in production capacity. All these factors will not be reached simultaneosly, so the best solution will be a balance among them. Types of Plant Layout. The production process normally determines the type of plant layout to be applied to the facility: Fixed position plant layout Product stays and resources move to it. In fixed-position layouts, the item being worked on remains stationary, and workers, materials, and equipment are moved as needed. Fixed-position layouts are used in large construction projects (buildings, power plants, and dams), shipbuilding, and production of large aircraft and space mission rockets.

 Fixed-position layouts are widely used for farming, firefighting, road building, home building, remodeling and repair, and drilling for oil. Product oriented plant layout Machinery and Materials are placed following the product path. This type of plant layout is useful when the production process is organized in a continuous or repetitive way. Continuous flow: The correct operations flow is reached through the layout design and the equipment and machinery specifications. Repetitive flow (assembly line): The correct operations flow will be based in a line balancing exercise, in order to avoid problems generated by bottle necks. Product layouts are used to achieve a smooth and rapid flow of large volumes of products or customers through a system. A job is divided into a series of standardized tasks, permitting specialization of both labor and equipment. The large volumes handled by these systems usually make it economical to invest huge amount of money in equipment and job design. For instance, if a portion of a manufacturing operation required the sequence of cutting, sanding, and painting, the appropriate pieces of equipment would be arranged in that same sequence. Operations are arranged in the sequence required to make the product Product layouts achieve a high degree of labor and equipment utilization. Product oriented layout: Efficiency The plant layout will be based in allocating a machine as close as possible to the next one in line, in the correct sequence to manufacture the product. Characteristics Special-purpose equipment are used Changeover is expensive and lengthy Material flow is continuous Material handling equipment is fixed

 Little direct supervision is required Planning, scheduling and controlling functions are relatively straight-forward Production time for a unit is relatively short In-process inventory is relatively low Advantages: Reduced material handling activities. Work In Process almost eliminated. Minimum manufacturing time. Simplification of the production planning and control systems. Tasks simplification. Low cost variable cost per unit Lower material handling costs reduction in work in-process inventories easier training and supervision Disadvantages: No flexibility in the production process. Low flexibility in the manufacturing times. High capital investment. Every workstation is critical to the process.- The lack of personnel or shut down of a machine stops the whole process. High volume required because of large initial investment Work stoppage at any point ties up the whole process Lack of flexibility in handling variety of products or production rates Monotonous work.

 Process oriented plant layout (Functional Layout). Machinery is placed according to what they do and materials go to them. This type of plant layout is useful when the production process is organized in batches. Personnel and equipment to perform the same function are allocated in the same area. The different items have to move from one area to another one, according to the sequence of operations previously established. The variety of products to produce will lead to a diversity of flows through the facility. The variations in the production volumes from one period to the next one (short periods of time) may lead to modifications in the manufactured quantities as well as the types of products to be produced. Used when the operations system must handle a wide variety of products in relatively small volumes (i.e., flexibility is necessary) Designed to facilitate processing items or providing services that present a variety of processing requirements. The layouts include departments or other functional groupings in which similar kinds of activities are performed. A manufacturing example of a process layout is the machine shop, which has separate departments for milling, grinding, drilling, and so on. Process oriented layout: Flexibility Characteristics General-purpose equipment is used Changeover is rapid Material handling equipment is flexible Operators are highly skilled Technical supervision is required Planning, scheduling and controlling functions are challenging Production time is relatively long In-process inventory is relatively high

 Cell Layout Hybrid Layout that tries to take advantage of different layouts types. Group of equipment and workers that perform a sequence of operations over multiple units of an item or family of items. Looks for the advantages of product and process layouts: Group Technology Grouping outputs with the same characteristics to families, and assigning groups of machines and workers for the production of each family Cellular manufacturing is a type of layout in which machines are grouped into what is referred to as a cell. Groupings are determined by the operations needed to perform work for a set of similar items, or part families that require similar processing. These relate to the grouping of equipment and include faster processing time, less material handling, less work-in-process inventory, and reduced setup time. Used when the operations system must handle a moderate variety of products in moderate volumes Hybrid (mixed) Layouts Actually, most manufacturing facilities use a combination of layout types. An example of a hybrid layout is where departments are arranged according to the types of processes but the products flow through on a product layout. For instance, supermarket layouts are fundamentally of a process nature, and however we find most use fixed-path material-handling devices such as roller-type conveyors both in the stockroom and at checkouts, and belt-type conveyors at the cash registers. Hospitals also use the basic process arrangement, although frequently patient care involves more of a fixed-position approach, in which nurses, doctors, medicines, and special equipment are brought to the patient. New Trends in Manufacturing Layouts Designed for quality and flexibility Ability to quickly shift to different product models or to different production rates

 Cellular layout within larger process layouts Automated material handling U-shaped production lines More open work areas with fewer walls, partitions, or other obstacles Smaller and more compact factory layouts Less space provided for storage of inventories throughout the layout ISO 22000 is a standard developed by the International Organization for Standardization dealing with food safety. This is a general derivative of ISO 9000. Food safety[1] is a scientific discipline describing handling, preparation, and storage of food in ways that prevent foodborne illness. This includes a number of routines that should be followed to avoid potentially severe health hazards. Food can transmit disease from person to person as well as serve as a growth medium for bacteria that can cause food poisoning. Debates on genetic food safety include such issues as impact of genetically modified food on health of further generations and genetic pollution of environment, which can destroy natural biological diversity. In developed countries there are intricate standards for food preparation, whereas in lesser developed countries the main issue is simply the availability of adequate safe water, which is usually a critical item.[2] In theory food poisoning is 100% preventable. Food safety is linked to the presence of food-borne hazards in food at the point of consumption. Since food safety hazards can occur at any stage in the food chain it is essential that adequate control be in place. Therefore, a combined effort of all parties through the food chain is required. Five key principles The five key principles of food hygiene, according to WHO, are:[3] 1. Prevent contaminating food with pathogens spreading from people, pets, and pests. 2. Separate raw and cooked foods to prevent contaminating the cooked foods. 3. Cook foods for the appropriate length of time and at the appropriate temperature to kill pathogens. 4. Store food at the proper temperature. 5. Use safe water and raw materials ISO 22000 standard The ISO 22000 international standard specifies the requirements for a food safety management system that involves the following elements: interactive communication; system management; prerequisite programs and HACCP principles Critical reviews of the above elements have been conducted by many scientists [1], [2], [3],.[4] Communication along the food chain is essential to ensure that all relevant food safety hazards

are identified and adequately controlled at each step within the food chain. This implies communication between organizations both upstream and downstream in the food chain. Communication with customers and supplies about identified hazards and control measures will assist in clarifying customer and supplier requirements. Recognition of the organization's role and position within the food chain is essential to ensure effective interactive communication throughout the chain in order to deliver safe food products to the final consumer. The most effective food safety systems are established, operated and updated within the framework of a structured management system and incorporated into the overall management activities of the organization. This provides maximum benefit for the organization and interested parties. ISO 22000 has been aligned with ISO 9001 in order to enhance the compatibility of the two standards. ISO 22000 can be applied independently of other management system standards or integrated with existing management system requirements. ISO 22000 integrates the principles of the Hazard Analysis and Critical Control Point (HACCP) system and application steps developed by the Codex Alimentarius Commission. By means of auditable requirements, it combines the HACCP plan with prerequisite programmes. Hazard analysis is the key to an effective food safety management system, since conducting a hazard analysis assists in organizing the knowledge required to establish an effective combination of control measures. ISO 22000 requires that all hazards that may be reasonably expected to occur in the food chain, including hazards that may be associated with the type of process and facilities used, are identified and assessed. Thus it provides the means to determine and document why certain identified hazards need to be controlled by a particular organization and why others need not. During hazard analysis, the organization determines the strategy to be used to ensure hazard control by combining the prerequisite programmes and the HACCP plan. ISO is developing additional standards that are related to ISO 22000. These standards will be known as the ISO 22000 family of standards. At the present time, the following standards will make up the ISO 22000 family of standards: ISO 22000 - Food safety management systems - Requirements for any organization in the food chain. ISO 22001 - Guidelines on the application of ISO 9001:2000 for the food and drink industry (replaces: ISO 15161:2001). ISO/TS 22002- Prerequisite programmes on food safetyPart 1: Food manufacturing ISO TS 22003 - Food safety management systems for bodies providing audit and certification of food safety management systems.

ISO TS 22004 - Food safety management systems - Guidance on the application of ISO 22000:2005. ISO 22005 - Traceability in the feed and food chain - General principles and basic requirements for system design and implementation. ISO 22006 - Quality management systems - Guidance on the application of ISO 9002:2000 for crop production. ISO 22000 is also used in the Food Safety Systems Certification (FSSC) Scheme FS22000. FS22000 is a Global Food Safety Initiative (GFSI) approved scheme. ISO 9001 vs ISO 22000 In comparison with ISO 9001, the standard is a more procedural orientated guidance than a principle based one. Apart from that, ISO 22000 is an industrial-specific risk management system for any type of food processing and marketing, which can be closely incorporated with the quality management system of ISO 9001. The detailed similarities and differences of the two standards can be found elsewhere [5], [6], [7],.[8] Potential justification In 2004, European Office of Crafts, Trades and Small and Medium-sized Enterprises for Standardisation addressed that the standard is only suitable for large sized companies and small food businesses will not be able to seek such a high standard due to the lack of resources to pursue the certification. The agency suggests to create an alternative for small food business to achieve the same objective.[9] EFSA is now making their efforts on the food legislations that are adaptable for the SMEs in food supply chains.[10] A few critics also proposed that organizations which seek the standard certification should also do the same to the ISO 14001 along with the ISO 9001, as they consider that large amounts of risks are mainly from the primary production in the supply chains rather than the later stages of food processing [11], [12] Titled as Agricultural food productsLayout for a standard method of sampling from a lot, the document provides a rule-based guidance on drafting a sampling method of agricultural food products for intended users. Except for milk products which ISO 707:1997 covers, the typical examples of the standards regulated by this document are

ISO 3100-1:1991 Meat and meat productsSampling and preparation of test samples Part 1: Sampling ISO 6670:2002 Instant coffeeSampling method for bulk units with liners ISO 13690:1999 Cereals, pulses and milled productsSampling of static batches (bulk grain with a depth of 3 m) ISO 6644:2002 Flowing cereals and milled cereal productsAutomatic sampling by mechanical means (bulk grain with a depth between 312 m)

The process of sampling is an important factor that determines a final result of an analyte, and therefore ISO 17025 uses it as one of the criteria for laboratory accreditation.[1] The ISO 7002 has been commented by many users ever since its release [2][3][4][5] ISO 22000 Food safety management systems Requirements for any organization in the food chain: ISO/TS 22003 Food safety management systems Requirements for bodies providing audit and certification of food safety management systems Food industry gears up for new ISO safety standard With the deadline approaching for a new global standard on managing food safety in plants, the industry is gearing up to train employees on how to keep contaminants out of the processing line. The iso.org" target="_blank" rel="nofollow">International Organisation for Standardisation (ISO) is in the process of developing a specific standard for food processors setting out safetymanagement procedures. The development of ISO 22000 will become a key part in the efforts by governments and regulators to keep contaminants out of the food chain. ISO 22000 on food safety management systems will affect organisations ranging from feed producers, primary producers through food manufacturers, transport and storage operators and subcontractorsto retail and food service outlets. Related organisations such as producers of equipment, packaging material, cleaning agents, additives and ingredients will also be affected. Dorte Jespersen, secretary of the ISO 22000 working group, said the introduction of a global standard will aid multinational food producers by helping to harmonise the growing raft of nationalstandards being introduced by various governments. "Organisations that produce, manufacture, handle or supply food recognize that customers increasingly want them to demonstrate and provide adequate evidence of their ability to identify andcontrol food safety hazards and the many conditions impacting food safety," Jespersen said. "The growing number of national standards for food safety management has led to confusion.Consequently, there is a need to harmonise the national standards at an international level." The ISO is an international standard-setting body made up of representatives from national regulatory bodies. The organisation produces world-wide industrial and commercial standards, which oftenbecome law through treaties or national regulations. ISO plans to publish the new standard in September this year. ISO has circulated a final draft of the standard to national standard bodiesthat make up its membership for a two-month voting period, ending on 5 July 2005. A food or beverage company will be able to use the new standard to demonstrate its ability to control food safety hazards. They will have to comply with part or all of ISO 22000 to meet

applicablefood safety regulations or any requirements agreed with a customer. Currently food and drink companies follow ISO 9001, a more general industry standard on quality management. The standards specifies requirements on planning, implementing, operating, maintaining and updating a food safety management system. It will set the standard for evaluating customer requirements.It will require companies to inform its suppliers, customers and other parties in the food chain about safety standards. US-based Bizmanualz is one company gearing up to meet the demand for training courses relating to the new standards. The company recently announced it had created a five-day training course thatwill satisfy the auditor certification requirements under ISO 22000. The class certifies quality auditors of food industry companies involved in the sourcing, processing and packaging of food anddrink products. "Recent global news highlighting unsafe food processing, distribution and preparation are creating an increasing demand for standardised food safety training to ensure a safer foodsupply" stated Bizmanualz's managing director, Christopher Anderson. The publication of ISO 22000 will be followed by an ISO technical specification giving guidance on the implementation of the standard. The technical specification will focus on guiding small andmedium-sized food producers. The ISO plans to publish another technical specification in a few months explaining certification requirements when third-party auditing is used. Experts from 23 countries are participating in the formation of ISO 22000. The Confederation of the Food and Drink Industries of the European Union, the Codex Alimentarius Commission,International Hotel and Restaurant Association, CIES/Global Food Safety Initiative and the World Food Safety Organisation are participating as advisors. Comparison of ISO22000:200X and the BRC Global Standard - Food Packaging By John Surak Type of standard ISO has several types of standards one type are auditable standards; these standards are developed in a manner that all elements are applicable (unless stated otherwise (exclusions)) and must be implemented. In addition ISO also develops guidance standards. These standards can be used by organizations to provide an interpretation of the auditable standard. For example ISO 9001:2000 is an auditable standard whereas ISO 9000:2000 and ISO 9004:2000 are guidance standards that are used to interpret ISO 9001:2000. ISO 22000:200x will be a guidance standard describing the requirements of a food safety management system, it will also be an auditable standard and can be used for certification and registration. The scope of the standard will be food safety. Food quality issues are to be addressed using ISO 9001:2000. It appears that the BRC Global Standard - Food Packaging does not completely separate the food safety issues and the quality issues. In addition it appears that the Standard combines both requirements and interpretation of the requirements.

Detail of the standard ISO 22000:200x appears to be less prescriptive than the BRC Global Standard - Food Packaging, in that it does not address in detail the Good Manufacturing Programs (GMPs), (Good Hygiene Programs) or prerequisite programs. Structure of the standards ISO 22000:200x will be compliant with ISO Guide 72. ISO Guide 72 is a standard that describes the structure of management system standards this will ensure that the ISO standard has a parallel structure to ISO 9001:2000. It appears that the structure of the BRC Global Standard Food Packaging is similar to ISO 9001:1994. Scope The two standards appear to have different scopes. ISO 22000:200x is intended to be used by organizations throughout the food chain, while the BRC Global Standard - Food Packaging is intended to be used by food packaging organizations. Comments We asked John whether he believes ISO 22000:200x will replace the BRC Global Standard Food Packaging? It is hard to predict the future. I would expect that as an auditable standard or a standard that can be used for registration / certification the answer will be yes. However, there may be a need in the UK food industry to have a standard that could provide more guidance to the food packaging companies on the interpretation of the GMP or prerequisite programs. With regard to industrial sectors, I do not expect to see it subdivided within the food chain. I do not know if there will be the development of any guidance standards. SaferPak Summary ISO 22000:200X will be: - International - Applicable to the entire food chain - Auditable and can be used for certification and registration - Structured / aligned with the 8 clauses of ISO 9000:2000 - Require the implementation of relevant industry GMP's, Standards and prerequisite measures e.g. the BRC Global Standard - Food Packaging (to put the meat on the bones). Well what does it all mean and will organisations certified to the BRC Global Standard Food Packaging? Without the aid of a crystal ball it is difficult to say, as we don't know at this early stage what the requirements of ISO 22000:200X will be. On the face of it does make good 'systems sense' for the structure to be aligned with ISO 9001:2000. Food industry organisations that trade solely within the UK may never be required to achieve certification to ISO 22000:200X, on the other hand global suppliers of packaging may well start receiving requests from customers towards the end of 2005.

HACCP guidelines The UK Food Standards Agency publishes recommendations as part of its Hazard Analysis and Critical Control Points (HACCP) programme. The relevant guidelines[27] state that: "Cooking food until the CORE TEMPERATURE is 75 C or above will ensure that harmful bacteria are destroyed. However, lower cooking temperatures are acceptable provided that the CORE TEMPERATURE is maintained for a specified period of time as follows :

60 C for a minimum of 45 minutes 65 C for a minimum of 10 minutes 70 C for a minimum of 2 minutes"

Previous guidance from a leaflet produced by the UK Department Of Health Handling Cooked Meats Safely A Ten Point Plan also allowed for:

"75 C for a minimum of 30 seconds 80 C for a minimum of 6 seconds"

as well as the above. Secondary references for the above may be found at[28][29][30][31][32] Note that recommended cooking conditions are only appropriate if initial bacterial numbers in the uncooked food are small. Cooking does not overcome poor hygiene. Hazard Analysis Critical Control Point or HACCP (English, pronounced /hsp/) is a systematic preventive approach to food safety and pharmaceutical safety that addresses physical, chemical, and biological hazards as a means of prevention rather than finished product inspection. HACCP is used in the food industry to identify potential food safety hazards, so that key actions can be taken to reduce or eliminate the risk of the hazards being realized. The system is used at all stages of food production and preparation processes including packaging, distribution, etc. The Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA) say that their mandatory HACCP programs for juice and meat are an effective approach to food safety and protecting public health. Meat HACCP systems are regulated by the USDA, while seafood and juice are regulated by the FDA. The use of HACCP is currently voluntary in other food industries.[1] A forerunner to HACCP was developed in the form of production process monitoring during World War II because traditional "end of the pipe" testing was not an efficient way to ferret out artillery shells that would not explode. HACCP itself was conceived in the 1960s when the US National Aeronautics and Space Administration (NASA) asked Pillsbury to design and manufacture the first foods for space flights. Since then, HACCP has been recognized internationally as a logical tool for adapting traditional inspection methods to a modern, sciencebased, food safety system. Based on risk-assessment, HACCP plans allow both industry and government to allocate their resources efficiently in establishing and auditing safe food production practices. In 1994, the organization of International HACCP Alliance was established

initially for the US meat and poultry industries to assist them with implementing HACCP and now its membership has been spread over other professional/industrial areas.[2] Hence, HACCP has been increasingly applied to industries other than food, such as cosmetics and pharmaceuticals. This method, which in effect seeks to plan out unsafe practices, differs from traditional "produce and test" quality control methods which are less successful and inappropriate for highly perishable foods. In the US, HACCP compliance is regulated by 21 CFR part 120 and 123. Similarly, FAO/WHO published a guideline for all governments to handle the issue in small and less developed food businesses.[3] On 4 October 1957, the Soviet Union launched Sputnik, the world's first satellite. American president Dwight D. Eisenhower responded by committing the United States to the space race.[4] Eisenhower signed the National Aeronautics and Space Act on 29 July 1958 that created the National Aeronautics and Space Administration (NASA) to put an American satellite in orbit and to get a person in space.[4] Food played a critical part in the manned space program. The initial group involved in this were Herbert Hollander, Mary Klicka, and Hamed El-Bisi of the United States Army Laboratories in Natick, Massachusetts and Dr. Paul A. Lachance of the Manned Spacecraft Center (Johnson Space Center since February 1973) in Houston, Texas.[4] Pillsbury joined the program as a contractor in 1959 with Howard E. Baumann representing the company as its lead scientist.[4] The main goal was to produce food that would not crumble under zero gravity, but also be safe to eat.[4] Lachance imposed strict microbial requirements, including pathogen limits (including E. coli, Salmonella, and Clostridium botulinum) on all foods destined for space travel.[4] All personnel involved realized that traditional quality control methods would be inadequate because there would be so much product testing involved for actual product to be used.[4] NASA own requirements for Critical Control Points (CCP) in engineering management would be used as a guide for food safety.[4] CCP derived from Failure mode and effects analysis (FMEA) from NASA via the munitions industry to test weapon and engineering system reliability.[4] Using that information, NASA and Pillsbury required contractors to identify "critical failure areas" and eliminate them from the system, a first in the food industry then.[4] Baumann, a microbiologist by training, was so pleased with Pillsbury's experience in the space program that he advocated for his company to adopt what would become HACCP at Pillsbury.[4] Soon thereafter, Pillsbury was confronted with a food safety issue of its own when glass was found contaminated in farina, a cereal commonly used in infant food.[4] Baumann's leadership promoted HACCP in Pillsbury for producing commercial foods, and applied to its own food production.[4] This led to a panel discussion at the 1971 National Conference on Food Protection that included examing CCPs and Good Manufacturing Practices in producing safe foods.[4] Several botulism cases were attributed to under-processed low-acid canned foods in 1970-71. The United States Food and Drug Administration (FDA) asked Pillsbury to organize and conduct a training program on the inspection of canned foods for FDA inspectors.[4] This 21 day program was first held in September 1972 with 11 days of classroom lecture and 10 days of canning plant evaluations.[4] Canned food regulations (21 CFR 108, 21 CFR 110, 21 CFR 113, and 21 CFR 114)[5] were first published in 1973.[4] Pillsbury's training program to the FDA in 1972, titled

"Food Safety through the Hazard Analysis and Critical Control Point System", was the first time that HACCP was used.[4] HACCP was initially set on three principles, now shown as principles one, two, and four in the section below.[4] Pillsbury quickly adopted two more principles, numbers three and five, to its own company in 1975.[4] It was further supported by the National Academy of Sciences (NAS) that governmental inspections by the FDA go from reviewing plant records to compliance with its HACCP system.[4] A second proposal by the NAS led to the development of the National Advisory Committee on Microbiological Criteria for Foods (NACMCF) in 1987.[4] NACMCF was initially responsible for defining HACCP's systems and guidelines for its application and were coordinated with the Codex Committee for Food Hygiene, that led to reports starting in 1992 and further harmonization in 1997.[4] By 1997, the seven HACCP principles listed below became the standard.[4] A year earlier, the American Society for Quality offered their first certifications for HACCP Auditors.[6] (First known as Certified Quality Auditor-HACCP, they were changed to Certified HACCP Auditor (CHA) in 2004.[7] HACCP expanded in all realms of the food industry, going into meat, poultry, seafood, dairy, and has spread now from the farm to the fork.[4] The HACCP seven principles Principle 1: Conduct a hazard analysis. Plans determine the food safety hazards and identify the preventive measures the plan can apply to control these hazards. A food safety hazard is any biological, chemical, or physical property that may cause a food to be unsafe for human consumption. Principle 2: Identify critical control points. A Critical Control Point (CCP) is a point, step, or procedure in a food manufacturing process at which control can be applied and, as a result, a food safety hazard can be prevented, eliminated, or reduced to an acceptable level. Principle 3: Establish critical limits for each critical control point. A critical limit is the maximum or minimum value to which a physical, biological, or chemical hazard must be controlled at a critical control point to prevent, eliminate, or reduce to an acceptable level. Principle 4: Establish critical control point monitoring requirements. Monitoring activities are necessary to ensure that the process is under control at each critical control point. In the United States, the FSIS is requiring that each monitoring procedure and its frequency be listed in the HACCP plan. Principle 5: Establish corrective actions. These are actions to be taken when monitoring indicates a deviation from an established critical limit. The final rule requires a plant's HACCP plan to identify the corrective actions to be taken if a critical limit is not met. Corrective actions are intended to ensure that no product injurious to health or otherwise adulterated as a result of the deviation enters commerce.

Principle 6: Establish procedures for ensuring the HACCP system is working as intended. Validation ensures that the plants do what they were designed to do; that is, they are successful in ensuring the production of a safe product. Plants will be required to validate their own HACCP plans. FSIS will not approve HACCP plans in advance, but will review them for conformance with the final rule. Verification ensures the HACCP plan is adequate, that is, working as intended. Verification procedures may include such activities as review of HACCP plans, CCP records, critical limits and microbial sampling and analysis. FSIS is requiring that the HACCP plan include verification tasks to be performed by plant personnel. Verification tasks would also be performed by FSIS inspectors. Both FSIS and industry will undertake microbial testing as one of several verification activities. Verification also includes 'validation' the process of finding evidence for the accuracy of the HACCP system (e.g. scientific evidence for critical limitations). Principle 7: Establish record keeping procedures. The HACCP regulation requires that all plants maintain certain documents, including its hazard analysis and written HACCP plan, and records documenting the monitoring of critical control points, critical limits, verification activities, and the handling of processing deviations. Standards The seven HACCP principles are included in the international standard ISO 22000 FSMS 2005. This standard is a complete food safety and quality [8] management system incorporating the elements of prerequisite programmes(GMP & SSOP),[8] HACCP and the quality management system, which together form an organizations Total Quality Management system. HACCP training HACCP management system trainings are only offered by several commercial enthusiasts.[9][10] However, ASQ does provide Trained HACCP Auditor (CHA) exam to individuals seeking the professional training.[11] In the UK the Chartered Institute of Environmental Health (CIEH) [12] offer a HACCP for Food Manufacturing qualification accredited by the QCA (Qualifications and Curriculum Authority).[13] HACCP Application Applied range It can apply to several food categories; sea food, bulk milk production line, Bulk Cream and Butter Production Line, animal meat industry, Organic Chemical Contaminants in Food, Corn Curl Manufacturing Plant and etc. USA

Fish and fishery products [14] Fresh-cut produces [15] Juice and nectary products [16] Food outlets [17] Meat and poultry products [18] School food and services [19]

HACCP Implementation It involves monitoring, verifying and validating of the daily work that is compliant with regulatory requirements in all stages all the time. The differences among those three types of work are given by Saskatchewan Agriculture and Food.[20] HACCP Versus ISO 22000 ISO 22000 is the new standard bound to replace HACCP on issues related to food safety. Although several companies, especially the big ones, have either implemented or are on the point of implementing ISO 22000, there are many others which are rather timid and/or reluctant to implement it. The main reason behind that is the lack of information and the fear that the new standard is too demanding in terms of bureaucratic work, from abstract of case study.[21] Notes The food industry is not unfamiliar with risk management. The management of food safety risks is a requirement of legislation both in the UK, Europe and indeed in most countries of the world. All participants in the food chain have a duty of care to all who will actively (or by chance); consume finished products of which they might have had an input, at some point, from farm to fork. The hazards we have to deal with throughout the food chain and the lifecycle of food products cannot be managed at singular points of interest in the supply chain only. Modern food safety legislation and consumer expectation place a duty on players in the food chain to ensure food safety competence of their supply chain. The singular most effective methodology for achieving this is by the implementation of a food safety management system (FSMS). Food Safety Management Systems An FSMS is a framework that involves policies, procedures, work practices and organizational behavior, among others, that enable an organisation to operationalise and manage a predetermined commitment to food safety. This system will be established on a technical backdrop of legislative compliance and (usually) a HACCP based risk assessment regime. Because FSMS are set up to provide assurance of effective control of food safety risks, industry practice is to get such a management system certified by an independent third party organisation {these third party organizations are themselves accredited by a national accreditation body, in the

case of the UK, The United Kingdom Accreditation Services (UKAS)}. The certification process will almost always involve an audit where company processes are sampled and checked in depth to provide confidence that the system meets established industry best practice requirements. These requirements are usually set out in food safety management standards (FSMst). Various FSMst are in place in various parts of the world. These standards could be national, industry interest group focused, private or supranational as the ISO standards represent. ISO standards are developed by the International Organisation for Standardization (ISO), the premier standards setting body in the world. They establish the baseline of best practice for the subject they address. ISO22000 is the ISOs flagship standard for food safety. ISO 22000 - Requirements for any organisation in the food chain ISO 22000 is founded on four major elements:

Interactive communication System management Prerequisite programmes HACCP Principles

While many food industry standards are product certification standards, providing a system that is based on managing the product; ISO 22000 like all other ISO standards is based on system process management. This has its foundations in the Total Quality Management philosophy that focuses on the process approach to achieve product consistency, quality and safety. In reality however, all industry standards now tend to address both the product and process approach with varying emphasis. ISO 22000 is the only FSMst that is applicable to ANY organisation in the food chain. This includes farming, processing, manufacturing, feed production, retailing and wholesale, distribution, food chain related services, transport and storage, equipment manufacture, biochemical manufacture and the manufacture of packaging materialsamong others. FSSC 22000 - An ISO 22000 based standard for food manufacturers In the year 2010, the Global Food safety initiative, a body of leading manufacturers and retailers that benchmarks food safety standards approved FSSC 22000 through it benchmarking process, making it an alternative certification to the BRC Global Standards for food safety, IFS, SQF and the Dutch HACCP among others. FSSC 22000 in its simplest expression is ISO 22000 + PAS 220 (Publicly Available Specification on prerequisite programmes for food manufacturing) + Additional scheme requirements. This scheme is available only to food manufacturers and has registered over 300 sites worldwide within its first year; as it is a system certification standard it integrates seamlessly with environmental management system (ISO 14001) and quality management system (ISO 9001).

ISO 14001- Environmental Management Systems: This standard helps an organisation to address its environmental risk by identifying the aspects of its business that impact the environment and assessing those impacts to determine how best they can be managed in the context of the organisation. ISO 9001- Quality Management System: While the management of quality might arguably not be considered risk management in itself. This standard provides a framework for managing quality of product and services within an organisation via the process approach. Other risk management standards that are of interest to the food industry that are either ISO standards or management systems certification standards loosely based on the ISO model include: OHSAS 18001- Occupational health and safety: Provides a framework for managing occupational health and safety in the workplace and holds great potential for saving on costs related to health and safety failures and routinely reduces insurance premium costs for business owners. ISO or HACCP in the food industry If I am operating a business in the food industry, should I invest in HACCP or ISO certification? HACCP (Hazard Analysis and Critical Control Points) and ISO certifications serve different purposes, but are also complementary. HACCP focuses on the sanitation of facilities, equipment and products, all of which must meet government and municipal standards. ISO is a quality control method. Both standards can be implemented either individually or simultaneously. In our opinion, HACCP certification is more of a priority for companies in the food industry. While HACCP focuses primarily on control within the production processes, ISO is broader in nature and takes into account all of the supporting processes as well. Both systems require formal documented processes. HACCP is built on seven key principles. 1. Conduct a hazard analysis. Potential hazards may be biological, such as a microbe; chemical, such as mercury or a toxin; or physical, such as ground glass. 2. Identify the critical control points (CCPs) where the elimination or prevention of any contaminates would occur. 3. Establish critical limits for preventive measures associated with each identified CCP.

4. Establish monitoring requirements and procedures for using the results of monitoring to adjust the process and maintain control. 5. Establish corrective actions to be taken when monitoring indicates a deviation from an established critical limit. 6. Establish effective record-keeping procedures that document the HACCP system. 7. Establish procedures to verify that the HACCP system is working correctly. HACCP has become a mandated system for processors of seafood, meat, dairy, honey, maple syrup, processed fruits and vegetables, shell eggs, and for the processed egg and poultry hatchery sectors of the food industry. It is relatively easy to combine HACCP and ISO into one overall management system that meets both the requirements for ISO 9000 and the requirements for HACCP. In fact, ISO 22000 is a new standard that specifies the requirements for a food safety management system. ISO 22000 incorporates all the elements of HACCP and of Good Manufacturing Practices (GMP). Food Safety & Quality Fruit Products Order (FPO), 1955 Fruit Products Order 1955, promulgated under section 3 of the Essential Commodities Act, 1955, aims at regulating sanitary and hygienic conditions in manufacture of fruit & vegetable products. Licensing under this Order lays down the minimum requirements for: 1. Sanitary and hygienic conditions of premises, surroundings and personnel. 2. Water to be used for processing. 3. Machinery and equipments 4. Product standards. Besides this, maximum limits of preservatives, additives and contaminants have also been specified for various products. This order is implemented by Ministry of Food Processing Industries through the Directorate of Fruit & Vegetable Preservation at New Delhi. The Directorate has four regional offices located at Delhi, Mumbai, Kolkata and Chennai, as well as sub-offices at Lucknow and Guwahati. The officials of the Directorate undertake frequent inspections of the manufacturing units and draw random samples of products from the manufacturers and markets which are analysed in the laboratories to test their conformity with the specifications laid under FPO. Processed Products of Fruits & Vegetables The Central Fruit Products Advisory Committee comprising of the officials of concerned Government Departments, technical experts, representatives of Central Food Technology

Research Institute, Bureau of Indian Standards, Fruit and Vegetable Producers and Processing Industry, is responsible for recommending amendments in the Fruit Product Order. In view of the demands of the industry, the liberalised economic scenario and the consumer interest, some amendments were made in FPO during 1997 and 2000. However, to make the industry and the product quality more competitive and to permit development and manufacture of innovative products, a major exercise to amend the existing product specifications and to draw specifications for new products has been undertaken during the year. The draft specifications in respect of 61 products have been discussed by the Central Fruit Products Advisory Committee and recommended to the Government for adoption. The rules under FPO are also under revision. Apart from the regulatory functions the Directorate of F&VP participated in a number of exhibitions and seminars held at various places with the assistance of the Ministry of Food Processing Industries with a view to increase awareness about the FPO, the quality control etc. To update the knowledge, technical and management techniques, officers of the Directorate were nominated for various training programmes. As part of the exercise of capacity building, training in cluster development has been arranged for officers of the Directorate. The Regional Offices of the Directorate of Fruit & Vegetable Preservation have been strengthened so as to make them functional links in the process of guiding industry for qualitative fruit processing. As part of this exercise, delegation of powers to grant license for cottage scale production to Deputy Directors has also been undertaken. To make the FPO logo visible and its message understandable to the large number of industries, promotional campaigns have been launched by the Ministry. Drive to ensure that all processors of fruit & vegetable have a license under the FPO was also launched in November, 2001. To promote FPO logo as a symbol of quality to the general public and amongst the manufacturers so that its mandatory nature and the necessity of conforming to sanitary and hygiene requirements, as also the quality parameters for the products is known, FPO publicity campaigns have been launched through print media. Codex Alimentarius Commission Codex Alimentarius Commission is an International Body constituted by Food and Agriculture Organization (FAO) and World Health Organization (WHO) of the United Nations with a objective to protect the health of consumers and to ensure fair practices in the food trade. The term Codex Alimentarius is taken from the Latin language and means food code. The Codex Alimentarius Commission is a collection of International Standards for the safety and quality of food as well as codes of good manufacturing practice and other guidelines to protect the health of the consumers and remove unfair practices in international trade. These standards, guidelines and recommendations are recognized worldwide for international trade negotiations and also for settlings of disputes by WTO.

The Codex Contact Point in India is the Directorate General of Health Services (DGHS) in the Ministry of Health & Family Welfare. However, the Ministry Food Processing Industries is closely associated with the activities of Codex Alimentarius in the country. Ministry of Food Processing Industries is the Chairman of five Shadow Committees of Codex Committees which are as under: Shadow Committee on Food Additives and Contaminants. Shadow Committee on Food Labelling. Shadow Committee on Processed Fruits & Vegetables. Shadow Committee on Cocoa & Chocolate Products. Shadow Committee on Mineral Water.

During the year 2001-2002, Ministry of Food Processing Industries participated in important Codex meetings and helped draft country response to important agenda items being taken up in the Codex system. ASSISTANCE FOR SETTING UP/ MODERNIZATION OF LABORATORIES For a successful food processing sector in India, various aspects of the Total Quality Management such as quality control, quality system and quality assurance should function in a horizontal fashion for total success. These are vital today, if one has to reach the world market or avoid being swamped by imported food items. MFPI aims at setting up a network of laboratories to help implement quality regime for processed food. A number of prestigious laboratories have been assisted in upgrading facilities for finding the quality revolution in the country. Some of the important ones are : i. ii. iii. iv. v. vi. CFTRI, Mysore was granted Rs. 22 lakhs for creation of organic food testing facility at CFTRI. Sher-e-Kashmir University of Agricultural Science & Technology, Jammu was provided Rs. 100 lakhs for setting up quality control laboratory. Indian Veterinary Research Institute, Izatnagar, U.P. was granted Rs. 150 lakhs for strengthening of laboratory at IVRI, Izatnagar. Andhra Pradesh Industrial and Technical Consultancy Organisation was provided Rs. 15 lakhs for setting up laboratory at Chittor. The Maharatta Chamber of Commerce Industries and Agriculture, Tilak Road, Pune411002 has been provided Rs. 40.00 lakhs for Establishment of Food Testing Laboratory. Food Research & Analysis Centre, New Delhi have been provided further grant of Rs. 6

lakhs for upgradation of quality control laboratory. vii. The Punjab Horticultural Post Harvest Technology Centre, Ludhiana has been provided Rs. 80.00 lakhs grant for Establishment of Quality Control Laboratory for Processed foods. Chowdhary Charan Singh Haryana Agricultural University, Hisar, has been provided further grant-in-aid of Rs. 6.16 Lakhs for Upgradation of Quality Control and Food Analysis Laboratory. Department of Food Science & Technology, G.B. Pant University, Pant Nagar, has been given financial assistance of Rs. 32.00 lakhs for the project entitled Upgradation of Quality Control Laboratory.

viii.

ix.

Hazard Analysis Critical Control Points (HACCP) /ISO: 9000 The Food Industry plays an important role in the national economy .In todays global market, quality and food safety have become competitive edge for the enterprises producing foods and providing services. Therefore, the installation of ISO:9000 Quality Management Systems and Hazard Analysis Critical Control Points (HACCP) based food safety system is extremely desirable in view of the changing scenario in the international trade. The Ministry of Food Processing Industries is operating a Plan Scheme for Generic Advertisement on Processed Food and Marketing Assistance. Under this Scheme, assistance in the form of grant-in-aid is provided to all agencies to the extent of 50% subject to a limit of Rs. 10 lakhs towards the cost of implementing Total Quality Management including obtaining ISO:9000 Certification, HACCP etc. During the period, a grant-in-aid of Rs. 18.00 lakhs has been provided for implementation of ISO-9000/HACCP System in the Food Processing Unit. The Ministry of Food Processing Industries in association with CIFTI organized series of seminars/workshops on quality and safety in different parts of the country to create awareness among the food industries as well as consumers. MFPI has assisted the Federation of Indian Chambers of Commerce & Industry, New Delhi to conduct training & Seminars to create awareness about the HACCP among identified units. The Ministry has also assisted the India Food Processors Association to conduct 6 TQM (Total Quality Management) workshops at Kolkata, Guwahati, Patna, Lucknow, Bangalore & Chandigarh during 2001-2002. Financial assistance was provided to National Productivity Council, New Delhi for organizing study, meetings of representatives from Asian Productivity Council members countries on Quality Enhancement in small & medium Food Processing Enterprises through HACCP from Feb 20 to March 4, 2002. FPO Guide-Lines GUIDELINES FOR SETTING UP OF UNIT UNDER FRUIT PRODUCTS ORDER No person shall carry on the business of a manufacture of fruit products including synthetic

syrups, synthetic vinegar and aerated sweetened beverages except under and in accordance with the terms of an effective licence granted to him under FPO. Category-wise area requirement, annual production limit and licence fee for one terms or part thereof (Ref. Clause 5(2) and part I(B) of the Second Schedule of Fruit Products Order, 1955 Category For manufacturing premises (In Sq. metres) 25 60 100 For storage and office purpose (In sq. metres) 25 60 100 Licence fees for one term or part thereof Rs.100/Rs.250/Rs.400/Annual production permissible per calendar year

Home scale `B Cottage scale Small scale `A

Small scale `B

150

150

Rs.600/-

Large scale

300

300

Rs.1500/

Upto 10 M.T. Above 10 M.T. but less than 50 M.T. Above 50 M.T. but less than 100 M.T. with installed capacity not exceeding 1 M.T./day. Below 250 M.T. with installed capacity not exceeding 2 M.T. per day. Above 250 M.T. with installed capacity exceeding 2 M.T. per day.

Note:1. Area occupied by machinery shall not be more than 50% of the manufacturing area. 2. (2)The minimum height of the factory premises under Home Scale `B and Cottage Scale categories is 10 feet and for small scale & large scale categories 14 feet. Every manufacturer shall manufacture fruit products in conformity with the sanitary requirements and appropriate standards of quality and composition specified in the Second Schedule of FPO. The Second Schedule Part 1 (a): Sanitary requirements of a factory of fruit products 1. The Premises shall be adequately lighted, ventilated & cleaned by white washing/colour washing or oil painting. 2. Windows & all openings shall be well screened with wire-mesh & the doors fitted with automatic closing springs, roof shall be permanent, floor cemented. 3. The equipments and the factory shall not be used for manufacture of repugnant products like fish, meat, eggs etc. However, permission may be granted as a special ase if arrangements are made for disinfections of premises after changing from meat products to fruit products (one

month idle gap will be required for changeover). 4. The premises shall be located in a sanitary place with open surroundings, preferably in industrial area/estates. The premises shall not be used as or communicated directly with residence. 5. Adequate arrangements for cleaning equipments, machinery, containers tables and raw materials shall be provided. 6. Copper brass or iron equipments, containers or vessels are not permitted, in the preparation, packing or storage of fruit products, only aluminum, stainless steel,. glass or tins equipment are allowed. 7. The water used shall be potable and shall be got examined chemically and bacteriologic ally by a public Health Laboratory (if no municipal water is available at the premises). The water sample should be drawn for such examination by the public Health Authority of the area where the premises is located or should be drawn in the presence of the above authority. Free following tap water of 1 kilolitre per day shall be made available. 8. Adequate drainage system and provisions for disposal of refuse shall be made. 9. Sufficient number of latrine & urinals shall be provided for workers. 10. Wherever cooking is done on open fire, proper outlets for so smoke/steam etc. like chimney, exhaust fan etc. shall be provided. 11.The workers engaged in the factory shall be healthy and shall be medically examined, inoculated and vaccinated whenever required. 12.The workers shall be provided with aprons, head-wars gloves etc. and shall be personally neat and tidy. Part 1(B): Qualifications of technical staff Production shall be supervised by a person possessing one of the following qualifications: Small scale: (1) B.Sc. with Chemistry/Agriculture as one of the subjects. (2) A Diploma or a certificate in fruit preservation or a course of at least 3 months duration from a recognised institution. Large Scale: (1) B.Sc. (Tech.) with Food Technology/Chemical Engineering with at least one year experience in fruit preservation factory. (2) B.Sc. with CFTRI Diploma or Diploma of Kalamassery (Kerala Government) Polytechnic. (3) B.Sc. with Chemistry/Agriculture with three years experience in fruit preservation factory. Minimum equipments & machinery for unit operation 1. 2. Washing of raw materials Washing of bottles 1) Rectangular tanks with false bottom of not less than 20 gallons capacity 1) Tanks having not less than 40 gallons capacity. 2) Bottle washing machine, brushes (*machine, rack, trolley). 3) Buckets (* Sterlising tanks).

3.

4.

5.

6. 7.

8.

9.

Preparation of Fruit/Veg. 1) 2-1/2 Ft. high table with aluminium/ steel top having area not less than 20 Sq. ft. 2) Not less than 12 trays. 3) Stainless steel knives. 4) Equipment for blanching Juicing, pulping & Mising 1) Juice extractor of basket press (* Pulping machine/hydraulic press). 2) Steet sieve. 3) Vessels of not less than 100 litres capacity. Processing 1) Furnace/Gas stoves (* Boiler) 2) Vessels/Steam jacket kettle. 3) Ladle. 4) Thermometer, hydrometer (Refractometer) 5) Sensitive balance for weighing chemicals, colour etc. Fermentation 1) Barrels/Carboys/Earthen jars. Filling & sealing 1) Mugs/Funnels (* Filling machine). 2) Crown cork machine/R.O. sealing machine. 3) Weighing balance. Exhausting, Processing for 1) Tanks with crates/Exhaust Box. cans & bottles. 2) Double Seamer/Semi-automatic can sealer. 3) Cooling tanks with crates/cranes. 4) Pressure cooker/retorts/sterilising equipments. 5) Incubator/pressure can tester. 6) * Pasteuriser. Carbonation or aeration 1) Power driver aerated machine or semi-automatic aerating and sealing machine.

Note - * Required for Small Scale and Large Scale units only. Food laws and Regulations To meet a countrys sanitary and phytosanitary requirements, food must comply with the local laws and regulations to gain market access. These laws ensure the safety and suitability of food for consumers, in some countries; also govern food quality and composition standards. The requirement of food regulation may be based on several factors such as whether a country adopts international norms developed by the Codex Alimentarius Commission of the Food and Agriculture Organization of the United Nations and the World Health Organization; good agricultural and manufacturing practices; or a country may also has its own suite of food regulations. Each country regulates food differently and has its own food regulatory framework. Usually more than one agency is involved in food regulations e.g. health and agriculture, they may have centralized or regionally controlled food regulations, and different agencies may be involved in enforcement activities. Types of food safety and quality standards that apply in most countries: Food Safety and Standards Act The Indian Parliament has recently passed the Food Safety and Standards Act, 2006that overrides all other food related laws. It will specifically repeal eight laws:

The Prevention of Food Adulteration Act, 1954 The Fruit Products Order, 1955 The Meat Food Products Order, 1973 The Vegetable Oil Products (Control) Order, 1947 The Edible Oils Packaging (Regulation) Order, 1998 The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967 The Milk and Milk Products Order, 1992 Essential Commodities Act, 1955 relating to food

The Act establishes a new national regulatory body, the Food Safety and Standards Authority of India, to develop science based standards for food and to regulate and monitor the manufacture, processing, storage, distribution, sale and import of food so as to ensure the availability of safe and wholesome food for human consumption. All food imports will therefore be subject to the provisions of the Act and any rules and regulations made under the Act. As a temporary measure, the standards, safety requirements and other provisions of the repealed Acts and Orders and any rules and regulations made under them will continue to be in force until new rules and regulations are put in place under the Food Safety and Standards Act, 2006. For that reason, importers will for some time have to continue to take into account the provisions of those repealed Acts and Orders. Prevention of Food Adulteration Act A basic statute (Prevention of Food Adulteration Act (PFA) of 1954 and the PFA Rules of 1955, as amended) protects India against impure, unsafe, and fraudulently labelled foods. The PFA standards and regulations apply equally to domestic and imported products and cover various aspects of food processing and distribution. These include food colour, preservatives, pesticide residues, packaging and labelling, and regulation of sales. Further details are available from the Ministry of Health and Family Welfare. All imported products must adhere to the rules specified in the Act and its regulations, including those covering labelling and marketing requirements. The PFA focuses primarily on the establishment of regulatory standards for primary food products, which constitute the bulk of the Indian diet. PFA rules sometimes appear to be drafted in a manner that goes beyond the mere establishment of minimum product quality specifications, by prescribing recipes for how food products are to be manufactured. There is an appeals process for amending rules, although this is time-consuming. The Central Committee for Food Standards, chaired by the Director General of Health Services, is the decision-making entity Syrups. Weights and measures Standards for weights and measures are administered by the Ministry of Consumer Affairs, Food and Public Distribution under the Standards of Weights and Measures Act, 1976 and related rules and notifications. All weights or measures must be recorded in metric units and certain commodities can only be packed in specified quantities (weight, measure or number). These include baby and weaning food, biscuits, bread, butter, coffee, tea, vegetable oils, milk powder,

and wheat and rice flour. Shelf life At the time of importation food products are required to have a valid shelf life, or residual shelf life, of not less than 60 per cent of their original shelf life. For more information, see the relevant notification at the Government of India Ministry of Commerce and Industry website. Fruit Products Order The fruit and vegetable processing sector is regulated by the Fruit Products Order, 1955 (FPO), which is administered by the Department of Food Processing Industries. The FPO contains specifications and quality control requirements regarding the production and marketing of processed fruits and vegetables, sweetened aerated water, vinegar, and synthetic syrups. All such processing units are required to obtain a license under the FPO, and periodic inspections are carried out. Processed fruit and vegetable products imported into the country must meet the FPO standards. Meat Food Products Order Regulations for the production of meat products are covered by the Meat Food Products Order, 1973. The Order: Specifies sanitation and hygiene requirements for slaughterhouses and manufacturers of meat products.

Contains packing, marking and labeling provisions for containers of meat products. Defines the permissible quantity of heavy metals, preservatives, and insecticide residues in meat products.

The Directorate of Marketing and Inspection at the Ministry of Agriculture is the regulatory authority for the order, which is equally applicable to domestic processors and importers of meat products. Livestock Importation Act India has established procedures for the importation of livestock and associated products under the Livestock Importation Act, 1898. Under the regulations, the import of meat products, eggs and egg powder and milk products require a sanitary import permit from the Department of Animal Husbandry, Dairying and Fisheries at the Ministry of Agriculture. A detailed import risk analysis is carried out, taking into account the disease situation prevailing in the exporting country compared with the disease situation in India. Milk and Milk Products Order The production, distribution and supply of milk products is controlled by the Milk and Milk Products Order, 1992. The order sets sanitary requirements for dairies, machinery, and premises, and includes quality control, certification, packing, marking and labeling standards for milk and milk products.

Standards specified in the order also apply to imported products. The Department of Animal Husbandry, Dairying and Fisheries at the Ministry of Agriculture is the regulatory authority. Essential Commodities Act, 1955: The main objective of the Act is to regulate the manufacture, commerce, and distribution of essential commodities, including food. A number of Control Orders have been promulgated under the provisions of this Act. These are: Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977: The Act governs sale of packaged commodities and provides for mandatory registration of all packaged products in the country. Consumer Protection Act, 1986: The Act provides for constitution of District Forum/State/National Commission for settlement of disputes between the seller/service provider and the consumer. The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 and Rules 1993: This Act aims at promoting breast feeding and ensuring proper use of infant milk substitutes and infant food. The Insecticide Act, 1968: The Act envisages safe use of insecticides so as to ensure that the leftover chemical residues do not pose any health hazard. Export (Quality Control and Inspection) Act, 1963: The Act aims at facilitating export trade through quality control and inspection before the products are sold to international buyers. Environment Protection Act, 1986: This Act incorporates rules for the manufacture, use, import and storage of hazardous microorganisms / substances / cells used as foodstuff. Pollution Control (Ministry of Environment and Forests): A no-objection certificate from the respective State Pollution Control Board is essential for all dairy plants. (i) Industrial Licences: No licence is required for setting up a dairy plant in India. Only a memorandum has to be submitted to the Secretariat for Industrial Approvals (SIA) and an acknowledgement obtained. However, a certificate of registration is required under the Milk and Milk Products Order (MMPO), 1992. Voluntary Standards There are two organizations that deal with voluntary standardization and certification systems in the food sector. The Bureau of Indian Standards looks after standardization of processed foods and standardization of raw agricultural produce is under the purview of the Directorate of Marketing and Inspection. Bureau of Indian Standards (BIS) The activities of BIS are two fold the formulation of Indian standards in the processed foods sector and the implementation of standards through promotion and through voluntary and third party certification systems. BIS has on record, standards for most of processed foods. In general, these standards cover raw materials permitted and their quality parameters; hygienic conditions under which products are manufactured and packaging and labelling requirements. Manufacturers complying with standards laid down by the BIS can obtain and "ISI" mark that can be exhibited on product packages. BIS has identified certain items like food colours/additives, vanaspati, and containers for packing, milk powder and condensed milk, for compulsory certification.

Directorate of Marketing and Inspection (DMI) The DMI enforces the Agricultural Products (Grading and Marketing) Act, 1937. Under this Act, Grade Standards are prescribed for agricultural and allied commodities. These are known as "Agmark" Standards. Grading under the provisions of this Act is voluntary. Manufacturers who comply with standard laid down by DMI are allowed to use "Agmark" labels on their products. Management Systems for Quality and Food Safety ISO 9000 Quality Management Systems The ISO 9000 system is looked at as a system with minimum quality requirements. It builds a baseline system for managing quality. The focus, therefore, is on designing a total quality management system, one that complies with external standards, but includes the specific requirement of industry and integrates elements of competitiveness.The millennium standard (ISO 9000:2000) has changed the focus from procedure to process. The main features of the ISO 9000:2000 standards are: Refinement in the presentation to make reading easy and elimination of general inauditable statements such as "consideration shall be given. The present standard gave an impression that it was applicable to manufacturing situation though it was applied in organizations of different types and sizes, including the service sector. The new standard is a broad-based standard applicable to all sectors. In the new standards, approach has changed from continuous improvement to continual improvement. Continuous improvement remained an implied approach to quality improvement in ISO 9000. Plant Quarantine Order India introduced the Plant Quarantine (Regulation of Import into India) Order in 2003 to prohibit and regulate the import of agricultural articles. Orders include: A ban on the import of certain plants and planting materials from designated countries (eg sugarcane from Australia) A restriction on the import of other plants and plant materials to authorized institutions, with additional declarations and special conditions attached. A requirement for additional declarations (such as a phytosanitary certificate issued by the exporting country) and special conditions for a further positive list of plants and plant materials. The Order, with amendments, is available at the Department of Agriculture and Cooperation and Plant Quarantine Organization of India websites. The implementing agency is the Directorate of Plant Protection, Quarantine, and Storage, under the Department of Agriculture and Cooperation, Ministry of Agriculture. Export (Quality Control and Inspection) Act, 1963 The Export Inspection Council is responsible for the operation of this Act. Under the Act, a large number of exportable commodities have been notified for compulsory pre-shipment inspection. The quality control and inspection of various export products is administered through a network of more than fifty offices located around major production centres and ports of shipment. In addition, organizations may be recognized as agencies for inspection and /or quality control. Recently, the government has exempted agriculture and food products, fruit products and fish and fishery products from compulsory pre-shipment inspections; provided that the exporter has a

firm letter from the overseas buyer stating that the overseas buyer does not require pre-shipment inspection from official Indian inspection agencies. Other Government Regulations Industrial Licence: No licence is required for setting up a Dairy Project in India. Only a Memorandum has to be submitted to the Secretariat for Industrial Approvals (SIA) and an acknowledgment is to be obtained. However Certificate of Registration is required under the Milk and Milk Products Control Order (MMPO) 1992. Foreign Investment: Foreign Investment in dairying requires prior approval from the Secretariat of Industrial Approvals, Ministry of Industry, as dairying has not been included in the list of High Priority Industries. Automatic approval will be given upto 51% Foreign Investment in High Priority Industries. In case of other Industries, proposals will be cleared on case to case basis. Government may allow 51% without enforcing the old limit of 40% applicable under Foreign Exchange Regulations Act at its discretion. Foreign Technology Agreements: Foreign Technology Agreements are freely allowed in high priority industries under the following terms:Lump sum payment of Rs 10 million Royalty payment of 5% on domestic sales and 8% as exports subject to total payment of 8% on sales turnover, over a 10 year period from the date of agreement or 7 years from commencement of production. Foreign Technology Agreements in dairying also need prior approval. Foreign Exchange required for payment of Royalty will have to be purchased at market rates. Foreign Technicians can be freely hired. Import of Capital Goods Import of capital goods is automatically allowed if it is financed through Foreign Equity. Alternatively, approval is needed from the Secretariat of Industrial Approvals. The approval depends on the availability of Foreign Exchange Resources. Import of Second Hand Capital Goods Import of Second hand goods is allowed subject to the following conditions: Minimum Residual life of 5 years The equipment should not be more than 7 years old A certificate from the Chartered Engineers of the country of origin certifying the age and the Residual life is to be produced. Import will be allowed only for actual users. Dividend Balancing Remittances of dividend should be covered by earnings from exports recorded in the years prior to the payment of dividend or in the years of the payment of the dividend.

FOOD AND DRUG INDUSTRY IN INDIA "AN OVERVIEW" This paper discusses the present Government policy, regulatory and business trends in food and pharmaceuticals Industry in India. These sectors of industry provide multifarious opportunities to potential investors in this Sector, both domestic and foreign. As several policy initiatives are undertaken by the Government of India since liberalization in August 1991, the industry sectors have witnessed unprecedented growth in most of the segments. Introducing Indias Food Industry The food industry is the complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population. The food processing industry is one of the largest industries in India. It is ranked fifth in terms of production, consumption, export and expected growth. Food Processing Industry is widely recognized as a 'sunrise industry' in India having huge potential for uplifting agricultural economy, creation of large scale processed food manufacturing and food chain facilities, and the resultant generation of employment and export earnings. India has enormous growth potential from its current status of being the world's second largest food producer to be the world's number one producer. Food Processing Industry is of enormous significance for India's development because of the vital linkages and synergies that it promotes between the two pillars of the economy, namely Industry and Agriculture. Food processing covers a spectrum of products from sub-sector comprising agriculture, horticulture, Plantation, animal husbandry and fisheries. Essentially, the food industry involves the commercial movement of food from field to fork. While India has an abundant supply of food, the food processing industry is still nascent: only two per cent of fruit and vegetables; and 15 per cent of milk produced are processed. Despite, of this the processed food industry ranks fifth in size in the country, representing 6.3 per cent of GDP. It accounts for 13 per cent of the countrys exports and 6 per cent of total industrial investment. The industry size is estimated at US$ 70 billion, including US$ 22 billion of value added products. This sector has been attracting FDI across different categories. Food Basket One of the world's largest food producers, India produces 600 million tonnes of food grains every year. Its granaries had a buffer stock of nearly 50 million tonnes of food grains (wheat and rice) in 2003-2004. The second largest exporter of rice and fifth largest exporter of wheat in the world, its agricultural exports account for nearly 14.2 percent of its total export figures. India ranks first in the world in production of cereals and milk. It is the second largest fruit and

vegetable producer and is among the top five producers of rice, wheat, groundnuts, tea, coffee, tobacco, spices, sugar, and oilseeds. India is the seventh largest producer of fish in the world and is ranked second in inland fish production. With the overwhelming success of the Green and White Revolution, India is now fervently poised for the Food Revolution that will ensure agricultural diversification and large investments in food processing. The entries of multinationals, aggressive rise of commodity branding and low cost of technology are changing the economics of the Indian food industry. The rise of aggressive regional players making forays into categories where entry barriers are low and a boom in Indian Fast Moving Consumer Goods (FMCG) markets and the rising need for these products are the key reasons for this growth in food business. In StoreThe Indian food market is approximately Rs 2, 50,000 crore ($69.4 billion), of which value-added food products comprise Rs 80,000 crore ($22.2 billion). Despite food production in the country is expected to double by the year 2020. With food production expected to double by 2020, large investments are already going into food and food processing technologies, skills and equipment. The Confederation of Indian Industry (CII) has estimated that the food processing sector has the potential of attracting Rs 1,50,000 crore (US$ 33 billion) of investment in 10 years and generate employment of 9 million persons. The Government has formulated and implemented several Plans and Schemes to provide financial assistance for setting up and modernizing of food processing units, creation of infrastructure, support for research and development and human resource development in addition to other promotional measures to encourage the growth of the processed food sector. A Goldman Sachs report ('Dreaming with BRICs: The Path to 2050') states that among Brazil, Russia, India and China, India will grow the fastest over the next 30 to 50 years by leveraging its demographic advantages and through continued development. At its present rates of growth, the burgeoning market in the country "would be adding nearly one France every 3.5 years and one Australia every year". Food processing industries in India-Regulatory Framework Different laws govern the food processing sector in India. The prevailing laws and standards adopted by the Government to verify the quality of food and drugs is one of the best in the world. Multiple laws/regulations prescribe varied standards regarding food additives, contaminants, food colours, preservatives and labelling. In order to rationalize the multiplicity of food laws, a

Group of Ministers (hereinafter referred as GoM) was recently set up to suggest legislative and other changes to formulate a modern, integrated food law, which will be a single reference point in relation to the regulation of food products. The food laws in India are enforced by the Director General of Health Services, Ministry of Health and Family Welfare, Government of India (GOI). There are various food laws applicable to food and related products in India : Prevention of Food Adulteration Act (PFA), 1954 and Rules (Ministry of Health & Family Welfare). The Standards of Weights and Measures Act, 1976, and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development). Essential Commodities Act, 1955(Ministry of Food & Consumer Affairs). Fruit Products Order (FPO), 1995. Meat Food Products Order, 1973 (MFPO). Milk and Milk Products Order, 1992. The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 and Rules 1993. The Insecticide Act, 1968. Export (Quality Control and Inspection) Act, 1963. Environment Protection Act, 1986. Pollution Control (Ministry of Environment and Forests). Industrial Licenses. BIS Act, 1986. VOP (Control) Order 1947. SEO (Control) Order -1967. The Prevention of Food Adulteration Act (PFA), 1954 focuses primarily on the establishment of regulatory standards for primary food products, which constitute the bulk of the Indian diet. The Central Committee for Food Standards, chaired by the Director General of Health Services, is the decision making entity. The appeals process, however, is cumbersome and time consuming. All imported products must adhere to the rules as specified in the regulation, including the labeling and marking requirements. The Standards of Weights and Measures Act, 1976 and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are legislative measures are designed to establish fair trade practices with respect to packaged commodities. The rules prescribe that the basic rights of consumers regarding vital information about the nature of the commodity, the name and address of the manufacturer, the net quantity, date of manufacture, and sale price are provided on the label. There are additional mandatory labeling requirements for food items covered under the

PFA. The Department of Consumer Affairs in the Ministry of Consumer Affairs, Food, and Public Distribution is the regulatory authority and enforcement agency. The fruit and vegetable processing sector is regulated by the Fruit Products Order, 1955 (FPO), which is administered by the Department of Food Processing Industries. The FPO contains specifications and quality control requirements on the production and marketing of processed fruits and vegetables, sweetened aerated water, vinegar, and synthetic syrups. All such processing units are required to obtain a licence under the FPO and periodic inspections are carried out. Processed fruit and vegetable products imported into the country must meet the FPO standards. Meat Food Products Order, 1992 administers the permissible quantity of heavy metals, preservatives, and insecticide residues for meat products. This order is equally applicable to the domestic processors and importers of meat products. However, its implementation is weak due to unorganized production in the domestic market and fewer imports. Milk and Milk Products Order, 1992 order regulates the production, distribution, and supply of milk products; establishes sanitary requirements for dairies, machinery, premises; and sets quality control standards for milk and milk products. Standards specified in the order are also equally applicable to imported milk products. The Destructive Insects and Pests Act, 1914, and Plants, Fruits, and Seeds (Regulation of Import in India) Order, 1989 regulate imports of planting seeds into India, and prohibit imports of seeds for sowing and planting materials without a valid permit. The implementing agency is the Directorate of Plant Protection, Quarantine, and Storage under the Department of Agriculture and Cooperation, Ministry of Agriculture. After the enactment of the proposed Food Safety and Standards Bill, 2005 in India, the food processing sector would be governed by only one law and one regulator, instead of presently applicable 15 different laws. With the simplified mechanism growth in the food-processing sector would kick-start, which is needed to ensure higher growth for the agriculture sector. Policies and Regulations Since liberalization several policy measures have been taken with regard to regulation & control, fiscal policy, export & import laws, taxation, exchange & interest rate control, export promotion and incentives to high priority industries. Food processing and agro industries have been accorded high priority with a number of important reliefs and incentives. At present,no industrial license is required for almost all of the food & agro processing industries

except for some items like: beer, potable alcohol & wines, cane sugar, hydrogenated animal fats & oils etc. and items reserved for exclusive manufacture in the small scale sector. Items reserved for Small Scale Industry (hereinafter referred as SSI) include pickles & chutneys, bread, confectionery (excluding chocolate, toffees and chewing-gum etc.), rapeseed, mustard, sesame & groundnut oils (except solvent extracted), ground and processed spices other than spice oil and olioresins, sweetened cashew nut products, tapioca sago and tapioca flour. In order to boost the food processing sector, the Centre has permitted under the Income Tax Act a deduction of 100 per cent of profit for five years and 25 per cent of profit in the next five years in case of new agro processing industries set up to package and preserve fruits and vegetables. Excise Duty of 16 per cent on dairy machinery has been fully waived off and excise duty on meat, poultry and fish products has been reduced from 16 per cent to 8 per cent. Food Parks In a bid to boost the food sector, the Government is working on agrizones and the concept of mega food parks. Twenty such mega parks will come up across the country in various cities to attract Foreign Direct Investment (FDI) in the food processing sector. The Government approved 105 proposals between January 2002 and May 2005 from foreign industrialists to set up food processing industries in India involving Rs.643.47 crore (US$ 144 million). The ministry has released a total assistance of Rs.105.22 crore (US$ 23 million) to implement the Food Parks Scheme. It has so far approved 50 food parks for assistance across the country. The Centre also plans Rs.100 crore (US$ 22 billion) subsidy for mega food processing parks. FDI in Food Sector Actual FDI inflow in food processing sector in 2004-05 and 2005-06 (till November, 2005) was Rs.332.00 crore. Automatic approval is granted for foreign investment upto 51% in high priority industries which include all food processing industries (except milk food, malted foods and flour) and all items of packaging for food processing industries. Investors need to file an application with the Reserve Bank of India (RBI) in the prescribed format and approval is ordinarily granted within 15 days. For foreign investment higher than 51% and for investments in industries outside the high priority industries, clearance has to be obtained from SIA. Applications are processed on a case by case basis on merit and usually SIA takes about 2 months for the process. Applications for setting up a 100% Export Oriented Unit is also required to be filed with the SIA. For setting up a unit in an Export Processing Zone (EPZ), application has to be filed with the Development Commissioner of the concerned EPZ. Foreign equity of upto 24% of the total shareholding is also being permitted in the small scale sector. Under automatic procedures, foreign technology agreements are being permitted in respect of

industries that are designated as high priority industries. The use of foreign brand names and / or trade mark of goods is also now being permitted freely. To provide access to international markets, majority foreign equity holding upto 51% equity is being permitted for international trading companies that are primarily engaged in export activities. FDI in a company engaged in cash and carry wholesale trading is now permitted up to 100 % under automatic route. The present policy only permit FDI up to 100 % in Cash and carry wholesale trading, which is distinct from retail trading, involving sale to individual customers through normal retail outlets. Recently Government of India has allowed retail trading in single brand items. FDI is not allowed in any other agricultural sector / activity. Fiscal Policy & Taxation Wide ranging fiscal policy changes have been introduced progressively. Excise & Import duty rates have been reduced substantially. Many processed food items are totally exempt from excise duty. Custom duty rates have been substantially reduced on plant & equipments, as well as on raw materials and intermediates, especially for export Production. Corporate taxes have been reduced and there is a shift towards market related interest rates. There are tax incentives for new manufacturing units for certain years, except for industries like: beer, wine, aerated water using flavouring concentrates, confectionery & chocolates etc. Indian currency (rupee) is now fully convertible on current account and convertibility on capital account with unified exchange rate mechanism is foreseen in coming years. Repatriation of profits is freely permitted in many industries except for some, where there is an additional requirement of balancing the dividend payments through export earnings. Export Promotion Food processing industry is one of the thrust areas identified for exports. Free trade zones (FTZ) and export processing zones (EPZ) have been set up with all necessary infrastructure. Also, setting up of 100% Export oriented units (EOU) is encouraged in other areas. They may import free of duty all types of goods, including capital foods. Capital goods, including spares upto 20% of the CIF value of the Capital goods may be imported at a concessional rate of Customs duty subject to certain export obligations under the EPCG scheme. Export linked duty free imports are also allowed. Units in EPZ/FTZ and 100% Export oriented units can retain 50% of foreign exchange receipts in foreign currency accounts. 50% of the production of EPZ/FTZ and 100% EOU units are saleable in domestic tariff area. All profits from export sales are completely free from corporate taxes. Profits from such exports are also exempt from Minimum Alternate Tax (MAT).

Custom clearance: Food items Customs Department in India follows certain guidelines for custom clearance of food items which includes checks on the condition of the hold in which the products were transported, ensuring whether they meet the requirement of storage as per the nature of the products, and does not in any way cause deterioration or contamination of the products. Customs Department is also required to check the physical/visual appearance of goods in terms of possible damage and its compliance with labelling requirements under the Prevention of Food Adulteration Rules and the Packaged Commodities Rules. In addition,any imported food item, at the time of its import, should have a valid shelf life of not less than 60 % of original shelf life. The Customs Department ensures that the articles which do not meet this condition are not allowed clearance for home consumption. Apart from the checks on all the consignments of edible/food products imported through Ports, Inland container Depots, Air Cargo Complexes, Container Freight Stations and Land Customs Station the samples of imported food products are required to be referred to the Port Health Officer for testing. For alleviating the difficulties of importers, it has been decided that pending receipt of the test repot, such consignments be allowed to be stored in warehouses under Section 49 of the Customs Act, 1962. New Opportunities: In India In India the Food Processing Industry is relatively nascent and offers opportunities for FDI. It accounts for Rs 1,280 billion (US$29.4 billion), in a total estimated market of Rs 3,990 billion (US$91.66 billion). There is a rapidly increasing demand for processed food caused by rising urbanization and income levels. To meet this demand, the investment required is about US$28 billion. Food processing has been declared a priority sector. The outlay in the Food Processing Sector has been increased from US$19.5 million in 2004-05 to US$41.35 million the next year, more than twice the earlier amount. The government is also considering investing US$22.97 million in at least 10 mega food parks in the country besides working towards offering 100 per cent foreign direct investment and income tax benefits in the sector. The Government has recently established Special Economic Zones with the purpose of promoting exports and attracting FDI. These SEZs do not impose duty on imports of inputs and they enjoy simplified fiscal and foreign exchange procedures and allow 100% FDI. The Government is also moving towards introducing an integrated food law, which is expected

to help meet the requirements of international trade and make the Indian food industry competitive in the global market. To harness the value-creating potential of agro processing, superior market mechanism and infrastructure are required to be created. State governments have already begun to actively encourage the creation of aggregators by encouraging companies to engage in agriculture marketing. It is believed that this may provide the basis to jumpstart private investment into cold chain and other supply chain infrastructure. INDIAN PHARMACEUTICAL INDUSTRY The Indian pharmaceutical industry has shown tremendous progress in terms of infrastructure development, technology base creation and a wide range of production. The country ranks fourth worldwide accounting for 8% of worlds production by volume and 1.5% by value. It ranks 17th in terms of export value of bulk actives and dosage forms. Indian exports are destined to more than 200 countries around the globe including highly regulated markets of US, Europe, Japan and Australia. During 1999-2000, production of bulk actives (APIs) is estimated at US $ 860 million and value of Dosage forms is estimated around $ 3 billion (growth + 15%). The country is also showing excellent performance on the export front with the exports touching $ 1.5 billion during 1999-2000 as per provisional statistics. In the process, the pharmaceutical industry in India has achieved global recognition as a low cost producer and supplier of quality bulk drugs and formulations to the world. India Patents Act of 1970 provided patenting of all processes and products in all areas excepting food, drugs and chemicals. Introduction of product patents in these three crucial areas indicates the sign of confidence and maturity of Indian industry particularly the emerging pharmaceutical industry. In fact, the new patent regime will help Indian pharma industry which has made large investments in drug research. It gives a chance to drug development by frontline companies with adequate safeguards to protect the interests of society. REGULATORY FRAMEWORK-DRUGS SECTOR Under the current Indian legal and regulatory regime, the manufacture, sale, import, exports and clinical research of drugs and cosmetics is governed by the following laws:1. The Drugs and Cosmetics Act, 1940 2. The Pharmacy Act, 1948 3. The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 4. The Narcotic Drugs and Psychotropic Substances Act, 1985 5. The Medicinal and Toilet Preparations (Excise Duties) Act, 1956 6. The Drugs (Prices Control) Order 1995 (under the Essential Commodities Act.

There are some other laws which have a bearing on the manufacture, distribution and sale of pharmaceutical products in India. The important ones being: The Industries (Development and Regulation) Act, 1951 The Trade and Merchandise Marks Act, 1958. The Indian Patent and Design Act, 1970 The Factories Act. The Drugs and Cosmetics Act, 1940 is a legislation brought in force to protect consumers interests. Provisions under this Act include punishments & fines for misbranding drugs, confiscating of such drugs (sec 14), prevention of the import of such drugs (sec10) etc. It prohibits the sale of such drugs under section 18. It also provides for the setting up of Central Drugs Laboratory for testing batches of drugs. The Act also prescribes strict standards that are to be followed by drug manufacturers and importers. It also clearly defines a misbranded drug under section 17. Section 13 clearly states that whoever contravenes any part of this Act will be punishable with imprisonment which may extend to one year, or with fine which may extend to five hundred rupees, or with both. If convicted again of the same offence then, in addition he shall be punishable with imprisonment, which may extend to two years, or with fine which may extend to one thousand rupees, or with both. OPPORTUNITIES IN DRUGS SECTOR The Indian pharmaceutical market has been forecast to grow to as much as US$ 25 billion by 2010 as per Organization of Pharmaceutical Producers of India (OPPI) estimates. However, Espicom's market projections forecast more modest but stable annual market growth of around 7.2 per cent, putting the market at US$ 11.6 billion by 2009. With such a large number of drugs going out of patent by 2005, the opportunity of Indian industry is becoming bigger and bigger and the future is certain. DISCLAIMER: This document is a copyright of Seth Associates. No reader should act on the basis of any statement contained herein without seeking professional advice. The authors and the firm expressly disclaim all and any liability to any person who has read this report, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this report.

Food safety programs Food safety programs are designed to help businesses identify and manage hazards to food safety.

Food law and licence conditions require most licensed food businesses to have a food safety program (FSP). A business that only needs to notify the Authority of its activities is not required by law to have a food safety program in place. Some choose to use one anyway to help manage risks and keep food safe. All food businesses must comply with relevant food regulations whether part of a food safety program or not. See: General requirements

Developing a food safety program Most licensed food businesses must implement and maintain a food safety program based on the Codex Alimentarius Commissions HACCP system and guidelines, or Standard 3.2.1 of the Food Standards Code. Food safety programs for licensed businesses are assessed by the Authority, to satisfy NSW food law purposes, after being audited by a person authorised by the Authority. Specific food safety program templates exist for the dairy, meat, seafood, shellfish and food for vulnerable persons schemes. Access the template for each scheme under industry sector requirements, then select the scheme. Food businesses are responsible for customising the template to reflect the:
hazards management

practices, and any relevant licensing regulations appropriate to them. For notified food businesses who may choose to develop and implement a food safety program, or licensed businesses who do not want to use the industry-specific template, the Authority offers two general resources:
Guide to

develop a food safety program (pdf, 226KB) TM a template for a food safety program (WORD , 56KB) About HACCP HACCP is an internationally recognised system used to identify and manage risk. HACCP stands for Hazard Analysis and Critical Control Point. The principles of HACCP are:
hazard

analysis

 identifying critical

control points establishing critical limits monitoring taking corrective action keeping records, and verifying results. These principles are used in food safety programs. The Authority cannot:
provide

HACCP certification offer information about private sector HACCP certification, including costs endorse any HACCP-accredited business or provider customise a food safety program or template for an individual business, or provide contacts for organisations that run HACCP accreditation schemes. The Authority can, however, issue a Food Safety Certificate to a licensed business that meets specific requirements. The food industry is a complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population. Only subsistence farmers, those who survive on what they grow, can be considered outside of the scope of the modern food industry. The food industry includes:

Regulation: local, regional, national and international rules and regulations for food production and sale, including food quality and food safety, and industry lobbying activities Education: academic, vocational, consultancy Research and development: food technology Financial services insurance, credit Manufacturing: agrichemicals, seed, farm machinery and supplies, agricultural construction, etc. Agriculture: raising of crops and livestock, seafood Food processing: preparation of fresh products for market, manufacture of prepared food products Marketing: promotion of generic products (e.g. milk board), new products, public opinion, through advertising, packaging, public relations, etc. Wholesale and distribution: warehousing, transportation, logistics

Overview It is challenging to find an inclusive way to cover all aspects of food production and sale. The Food Standards Agency, a government body in the UK, describes it thus: "...the whole food industry from farming and food production, packaging and distribution, to retail and catering."[1] The Economic Research Service of the USDA uses the term food system to describe the same thing: "The U.S. food system is a complex network of farmers and the industries that link to them. Those links include makers of farm equipment and chemicals as well as firms that provide services to agribusinesses, such as providers of transportation and financial services. The system also includes the food marketing industries that link farms to consumers, and which include food and fiber processors, wholesalers, retailers, and foodservice establishments."[2] Industry size Processed food sales worldwide are approximately US$3.2 trillion (2004).[citation needed] In the U.S., consumers spend approximately US$1 trillion annually on food,[3] or nearly 10 percent of the Gross Domestic Product (GDP). Over 16.5 million people are employed in the food industry. In the United Kingdom, the food industry is extensive. It employs well over half a million people and has a turnover in excess of 70bn. It is the largest manufacturing sector in the UK and represents around 15% of the total manufacturing sector in the UK. Around 13% of the people working in manufacturing in the UK work in the food and drink industry.[4] Agriculture Agriculture is the process of producing food, feed, fiber and other desired products by the cultivation of certain plants and the raising of domesticated animals (livestock). The practice of agriculture is also known as "farming", while scientists, inventors and others devoted to improving farming methods and implements are also said to be engaged in agriculture. More people in the world are involved in agriculture as their primary economic activity than in any other, yet it only accounts for four percent of the world's Gross Domestic Product (GDP). Food processing Food processing is the methods and techniques used to transform raw ingredients into food for human consumption. Food processing takes clean, harvested or slaughtered and butchered

components and uses them to produce marketable food products. There are several different ways in which food can be produced. One Off Production This method is used when customers make an order for something to be made to their own specifications, for example a wedding cake. The making of One Off Products could take days depending on how intricate the design is and also the ability of the chef making the product. Batch Production This method is used when the size of the market for a product is not clear, and where there is a range within a product line. A certain number of the same goods will be produced to make up a batch or run, for example at Gregg's Bakery they will bake a certain number of chicken bakes. This method involves estimating the amount of customers that will want to buy that product. Mass production This method is used when there is a mass market for a large number of identical products, for example, chocolate bars, ready meals and canned food. The product passes from one stage of production to another along a production line. Just In Time This method of production is mainly used in sandwich bars such as Subway. All the components of the product are there and the customer chooses what they want in their product and it is made for them fresh in front of them. Wholesale and distribution A vast global transportation network is required by the food industry in order to connect its numerous parts. These include suppliers, manufacturers, warehousing, retailers and the end consumers. There are also companies that add vitamins, minerals, and other necessary requirements during processing to make up for those lost during preparation. Wholesale markets for fresh food products have tended to decline in importance in OECD countries as well as in Latin America and some Asian countries as a result of the growth of supermarkets, which procure directly from farmers or through preferred suppliers, rather than going through markets. The constant and uninterrupted flow of product from distribution centers to store locations is a critical link in food industry operations. Distribution centers run more efficiently, throughput can be increased, costs can be lowered, and manpower better utilized if the proper steps are taken when setting up a material handling system in a warehouse. (1) Retail With populations around the world concentrating in urban areas,[5] food buying is increasingly removed from all aspects of food production. This is a relatively recent development, having taken place mainly over the last 50 years. The supermarket is the defining retail element of the food industry, where tens of thousands of products are gathered in one location, in continuous, year-round supply. Restaurants, Cafes, Bakeries and Mobile trucks are also ways consumers can purchase food.

Food preparation is another area where change in recent decades has been dramatic. Today, two food industry sectors are in apparent competition for the retail food dollar. The grocery industry sells fresh and largely raw products for consumers to use as ingredients in home cooking. The food service industry by contrast offers prepared food, either as finished products, or as partially prepared components for final "assembly". Food industry technologies Sophisticated technologies define modern food production. They include many areas. Agricultural machinery, originally led by the tractor, has practically eliminated human labor in many areas of production. Biotechnology is driving much change, in areas as diverse as agrochemicals, plant breeding and food processing. Many other areas of technology are also involved, to the point where it is hard to find an area that does not have a direct impact on the food industry. Computer technology is also a central force, with computer networks and specialized software providing the support infrastructure to allow global movement of the myriad components involved. Marketing As consumers grow increasingly removed from food production, the role of product creation, advertising, publicity become the primary vehicles for information about food. With processed food as the dominant category, marketers have almost infinite possibilities in product creation. Media & Marketing A key tool for FMCG marketing managers targeting the supermarket industry includes national titles like The Grocer in the U.K., Checkout in Ireland, Progressive Grocer in the U.S., and Private Label Europe for the entire of the European Union.it Labour and education Until the last 100 years, agriculture was labor intensive. Farming was a common occupation. Food production flowed from millions of farms. Farmers, largely trained from generation to generation, carried on the family business. That situation has changed dramatically. In North America, over 50% of the population were farm families only a few decades ago; now, that figure is around 1-2%, and about 80% of the population lives in cities. The food industry as a complex whole requires an incredibly wide range of skills. Several hundred occupation types exist within the food industry. Research and development Research in agricultural and food processing technologies happens in great part in university research environments. Projects are often funded by companies from the food industry. There is therefore a direct relationship between the academic and commercial sectors, as far as scientific research.

Prominent Food Companies

Nestl is the world's largest food and beverage company. PepsiCo is the largest U.S.-based food and beverage company. Unilever is an Anglo-Dutch company that owns many of the world's consumer product brands in foods and beverages. Kraft is apparently the world's second largest food company, following its acquisition of Cadbury in 2010. DuPont and Monsanto Company are the leading producers of pesticide, seeds, and other farming products. Both Archer Daniels Midland and Cargill process grain into animal feed and a diverse group of products. ADM also provides agricultural storage and transportation services, while Cargill operates a finance wing. Bunge Limited is a global soybean exporter and is also involved in food processing, grain trading, and fertilizer. Dole Food Company is the world's largest fruit company. Chiquita Brands International, another U.S.-based fruit company, is the leading distributor of bananas in the United States. Sunkist Growers, Incorporated is a U.S.-based grower's cooperative. JBS S.A. is the worlds largest processor and marketer of chicken, beef, and pork. Smithfield Foods is the world's largest pork processor and hog producer. Sysco Corporation, mainly catering to North America, is one of the world's largest food distributors. General Mills is the world's sixth biggest food manufacturing company. Grupo Bimbo is one of the most important baking companies in brand and trademark positioning, sales, and production volume around the world.

FOOD SAFETY & QUALITY Fruit Products Order (FPO), 1995 Fruit Products Order -1955, promulgated under Section 3 of the Essential Commodities Act 1955, aims at regulating sanitary and hygienic conditions in manufacture of fruit, vegetable products. It is mandatory for all manufacturers of fruit, vegetable products to obtain a license under this Order. To ensure good quality products, manufactured under hygienic conditions, the Fruit Product Order lays down the minimum requirements for: 1. Sanitary and hygienic conditions of premises, surrounding and personnel. 2. Water to be used for processing. 3. Machinery and equipment. 4. Product standards. Besides this, maximum limits of preservatives, additives and contaminants have also been specified for various products. This order is implemented by Ministry of Food Processing Industries through the Directorate of

Fruit & Vegetable Preservation at New Delhi. The Directorate has four regional offices located at Delhi. The Directorate has four regional offices located at Delhi, Mumbai, Calcutta and Chennai, as well as sub-offices at Lucknow and Guwahati. The officials of the Directorate undertake frequent inspections of the manufacturing units and draw random samples of products from the manufactures and markets which are analyzed in the laboratories to test their conformity with the specifications laid under FPO. The Central Fruit Advisory Committee comprising of the officials of concerned Government Departments, Technical experts, representatives of Central food Technology Research Institute, Bureau of Indian standards, Fruits and Vegetable Products and processing Industry, is responsible for recommending amendments in the Fruit Product Order, In view of the demands of the industry, and the liberalized economic scenario, major amendments were made in FPO during 1997 Meat Food Products Order (MFPO) Meat Food Products Order, 1973 (MFPO) promulgated under the provisions of Essential Commodities Act, 1955 provides for sanitary and other requirements, limits of heavy metals, preservatives, insecticides, residue, etc., for meat food products. This order was being implemented by Ministry of Rural Development in the Ministry of Rural Area & Employment. As on 31st March 1998 there were 128 licenses issued under MFPO 1973.As per the recent amendment to the Allocation of Business, Ministry of Agriculture (Deptt. of Agriculture & Cooperation) would now be the Administrative Ministry for this Order. Milk & Milk Products Order (MMPO) Milk and Milk Products Order, 1992 administered by the Department of Animal Husbandry & Dairying under Ministry of Agriculture was promulgated on 9th June, 1992 under the provision of Section 3 of the Essential Commodities Act, 1955 with a view to maintain an increased supply of liquid milk of desired quality to the general public. This order regulated production, supply and distribution of milk and milk products throughout the country. The order also seeks to ensure the observance of sanitary requirements for dairies, machinery and premises, and quality control standards for milk and milk products. So far, 254 registration certificates under MOP, 1992 has been issued by the Department of Animal Husbandry and Dairying. Codex Alimentarius The term Codex Alimentarius is taken from Latin and means food code. Codex Alimentarius brings together all the interested parties -scientists, technical experts, governments, consumers and industry representatives to help develop standards for food manufacturing and trade. These standards, guidelines and recommendations are recognized worldwide for their vital role in protecting the consumer and facilitating international trade. As Codex Alimentarius represent a consensus of food and trade experts from around the world, these standards are more and more being used in international trade negotiations and also for settling of disputes by WTO The Codex contract Point in India is the Directorate General of Health Services (DGHS) in the Ministry of Health; however, the Ministry of Food processing Industries is closely associated

with the activities of Codex Alimentarious. Under the Plan schemes, a scheme for setting up of Codex Monitoring Cell in the Ministry with the allocations of Rs.58.00 lakhs in 1998-99 has been formulated for creating data base, technical examination of various standards in association with experts. A delegation led by a senior officer of this Ministry Participated in the meeting of the Codex Committee on food Labeling at Ottawa from 25th to 29th May, 1998. Another Officer from this Ministry was Member of the Indian delegation for the meeting of the Codex Committee on General Principles held at Paris, France from 7th to 11th September, 1998. The Pulses, Edible Oilseeds and Edible Oils (Storage) Order.1977 empowers the government to put maximum stock limits on wholesalers and retailers of pulses, oilseed and oils and is designed to maintain supplies and ensure equitable distribution and availability at fair prices of these items. Food Quality The Food Processing Ministry cleared a proposal for release of Rs.59.2 lakhs to Food Research and Analysis Center, New Delhi for up gradation of its Food Analysis and Quality Control Laboratory for analysis of food products. The main objective of the proposal is to upgrade the existing analytical laboratory and bring it on par with any other modern analytical laboratory in the country. During the year under review, the Ministry cleared a proposal in principle for release of 12.32 lakhs to CCS Haryana Agriculture University, Hissar for up gradation of quality control and food analysis laboratory of the Department of Food Science and Technology of the university. The main objective of the proposal are to provide quality assurance and analytical services to the food processing industries, to undertake micro biological examination of various pathogen and mycotoxins and to estimate nutritional parameters including minerals, vitamins, food value in calories, protein carbohydrates, fats etc. Hazard Analysis and Critical Control Point (HACCP) Hazard Analysis and Critical Control Point (HACCP) is an important quality assurance system. This system ensures that the products are safe and of good quality. The system is extremely desirable in view of the changing scenario in the International trade. The Ministry provides grant of 50% subject to a limit of Rs.10 lakhs towards the cost of implementing Total Quality Management (TQM) including HACCP and ISO-9000 certifications. This Ministry sponsored a one-day seminar and five day training programme organized by APEDA from 30th November to 5th December 1998 in collaboration with NSF-International strategic Registration Limited, USA, which is the main authority for certifying HACCP-9000. HACCP is an important requirement for ensuring the quality of products from health and safety aspects and is crucial for exports. Laws relating to food processing industries There are a number of food laws being implemented by various Ministries/Departments. These are primarily meant for two purposes namely (1) Regulation of Specifications of food and (2) Regulation of Hygienic condition of Processing/Manufacturing. Some of these food laws are

mandatory and some are voluntary. The details of various food laws in operation in India are as under:A FOOD LAWS: 1. Prevention of Food Adulteration Act (Ministry of Health) The Act lays down specifications for various food products and is mandatory. The Ministry of Health in 1995 had constituted a Task Force under the chairmanship of Shri E.S. Venkataramaiah, Chief Justice of India (retired). The Task Force recommended that there should be emphasis on good manufacturing practices instead of detection of adulteration and prosecution. It also expresses concern about lack of laboratory equipments and quantified persons. In addition it also suggested that the name of PFA Act be changed to Food Safety Act. 2. Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development) This Act is commonly known as AGMARK and is voluntary. The Act lays down the specifications for various agricultural commodities including some processed foods. 3. Laws being operated by Bureau of Indian Standards (BIS) BIS is the largest body for formulating standards for various food items. These standards are also voluntary. 4. Essential Commodities Act A number of quality control orders have been issued under Essential Commodities Act such as FPO, MMPO, Meat Product Order and Vegetable Oils Control Order. These orders are mandatory and primarily meant for regulating the hygienic conditions. They need to be clubbed under one order which may called Food Products Order. B. Harmonization of Food Laws The review of multiple laws is necessary to have a uniform and logical approach for regulating the quality of food. The following action is being taken by various Ministries:1. The Ministry of Civil Supplies & Consumer Affairs has brought out a paper for consideration of Committee of Secretaries (COS). The paper recommends that BIS should formulate standards for all food items in the country. This will be a major step towards harmonization of food laws and is still under consideration of COS for finalization. 2. The Task Force constituted by the Prime Minister under the chairmanship of Shri Nulsi Wadia has submitted its report which is under the consideration of the Government. The Task Force had advocated promotion of food safety and quality. The Task Force has further made following suggestions:o o

Food Regulation Authority (FRA) is set up to formulate and update food standards for domestic and export market. FRA should replace the PFA to conform to international standards. The Task Force has given ten specific recommendations such as provision of storage simplicitor, simplification of sampling procedure, simplification of procedure for nominee, time limit

for prosecution, standard methods of analysis to be prescribed, penalty should graded according to the gravity of offences and provision of adequate/infrastructure and laboratories. Harmonization of Indian standard with quality norms of Codex and WTO.

The Central Committee of food Standard (CCFS) should be replaced by FRA Governing Body for expeditious decisions. Whom to approach for what Sl. No 1 Steps involved Product selection and assistance in preparation of project report/feasibility/report/market survey Obtaining provisional /permanent registration certificate Registration under sales tax Persons/ Officers to be contacted Small Industries Service Centre, Chennai

2 3 4 5

6 7 8

9 10 11 12

District Industries Centre of the concerned district where the unit is to be set up o/o The Commissioner of Commercial Taxes, Chennai Registration under central excise O/O The Collector of central Excise & customs, Chennai Obtaining Finance Nationalized banks Private Commercial banks Tamil Nadu Industrial Investment Corporation Small Industries Development Bank of India Obtaining water supply Tamil Nadu Water Supply & Drainage board Obtaining Power connection Tamil Nadu Electricity Board Registration under ESI Act (applicable Employees State Insurance Corporation, for units employing 20 or more Chennai workers) Obtaining ISI Certificate Bureau of Indian Standards, Nanak Bhavan, New Delhi Obtaining the Trade mark registration Registrar of Trade markers, 9 Judge jumbulingam Mudaliar road, Chennai Obtaining patent Right The Controller of patents and Design, 776 Triplicane high road, Chennai Obtaining license under food products Deputy director, Directorate of Marketing 7 order for manufacture of food products Inspection, Ministry of Food & Agriculture, Sastry Bhavan, 35 Haddows Road, Chennai600006.

13

Obtaining Information on manufacturing of essential oils License for Drug &Cosmetic manufacture Pollution control License Setting up of Rice Solvent Extraction Units

14 15 16

Central Institute of Medicinal & aromatic plants, Regional Centre, UAS, GKVK Campus, Hebbal, Bangalore Drug Controller Office of the Drug Controller, Chennai Tamil Nadu Pollution control Board, Chennai Tamil Nadu Civil Supplies Department, Chennai

INTEGRATED QC SYSTEM FOR THE FOOD SERVICING INDUSTRY IN ISRAEL Reuven Katain D.V.M., M.P.H. 1. The Program The handling of food, whether production, processing or serving, involves applied technologies of varying degrees of sophistication. The degrees of efficiency achieved are functions of the tools that measure performance of the desired optimization of each process. Product quality and food safety, while of ultimate importance to the consumer, represent two of the many factors, such as market appeal, process efficiency, purchasing, input utilization, and profit making. In fact, only in very large enterprises is there a Quality and Food Safety function represented by the multi-disciplinary team running the enterprise. In most cases the activities of Food Safety and Food Security, are nominal by-products for the productionoriented executives employed in the plant's hierarchy. Nevertheless, the Israeli food industry is showing increasing interest in Quality Control and Food Safety. The accelerated rate of investment in technologies, producing sophisticated and competitive food products for export and the local market, and the high gourmet standards in 5star restaurants and hotels are responsible for an awareness of the need for institutionalized quality control and food safety. Public food services in industry, hospitals and schools, as well as the marginal entrepreneurs entering the food-service and food-producing industries, account for increased demand, and are potential customers for the kind of services offered. Total Quality Management (TQM) has long been considered an essential component of all production and service enterprises. It is essentially a problem-detecting system, committed to continuous improvement and focusing on customer satisfaction. TQM employs data for progress and success, and it empowers personnel to be responsible and accountable for continuous improvement; or in other words, it facilitates Good Manufacturing Practice (GMP). The Hazard Analysis Critical Control Point (HACCP) System is a comprehensive process control system. HACCP is considered worldwide, by scientific and public health officials, as the best food protection system available today. It relies on documenting with sound data, the continuous monitoring and verification of the process. It is a problem prevention, rather than a problem detection system. HACCP relies heavily on employee involvement and commitment to process control, that should result in the providing a better and safer final product. In this

sense, the HACCP system compliments the principles of TQM. Finally, since it is the responsibility of industry to provide safe food products and safe food services of acceptable quality, it should be its prerogative to design and implement the means by which such responsibility can be met to the satisfaction of regulatory agencies, and more broadly, to public consumption. The objective of any Third Party Inspection Service, i.e. a private company advancing TQM / HACCP, is to train both employees, plant and/or establishment personnel to implement the TQM and HACCP systems. They are also required to define or evaluate the job description of food safety function, if it does not yet exist, and to develop the monitoring data collection system at critical control points to assess hazards and risks associated with the following items: The growth, harvesting and transporting of raw materials and processing, manufacturing, distributing, marketing and consumption or serving food to the end-user. This service includes: 1. Determine the Critical Control Points to control identified hazards. 2. Establish the critical limits that must be met at each identified hazard. 3. Establish procedures to monitor Critical Control Points (CCP). 4. Establish corrective action to be taken when there is a deviation identified by monitoring a CCP. 5. Establish effective record-keeping systems to document the TQM / HACCP plan. 6. Establish procedures for verification by showing the HACCP system is meeting the predetermined expectations. 7. Provide laboratory, R & D, and computerized feed-back to backup and maintain up-todate utilization of available technologies and their application in the system. 8. Provide for recall procedures if necessary as part of crisis management. The enterprises targeted to benefit from and/or require the institution of a TQM / HACCP program include all segments of the food industry. These include production, processing and marketing of dairy products, raw and processed meats, poultry, fish and seafood, eggs and egg products, fruit and vegetables, fruit beverages, low acid and acid canned food, cereals and cereal products, fats and oils, sugar, cocoa, chocolate and confectionaries, spices, yeast, tea, formulated foods, nuts, miscellaneous additives and food coloring, bottled water and ice cubes, confectioners, bakeries, custom-prepared salads, restaurants, fast foods establishments, hotels, catering services, abattoir and meat producing plants-all the way from the farm to the fork. The proposed services offer: 1. Preparation of monitoring programs for delicate ready-to-eat foods. 2. Provide food safety personnel to conduct in-plant food safety programs. 3. Design and apply quick-tests in areas of microbiology, physical foreign body detection of foreign bodies, biochemical indicator systems and organoleptic tests to assess hazards at Critical Control Points 4. Offer fully authorized laboratory services by Ministries of Health and Agriculture's Veterinary Services for program back-up and R & D in new diagnostic technologies.

5. Provide a computerized feed-back system, thus making available to prospective customers weekly summaries of the tested parameters for instant process evaluation and operational decision making, and product recall in cases of crisis management. 6. Training programs for plant employees and management to take advantage of the qualitative tools available for increased efficiency in obtaining production goals. 7. Literature search for new tools to improve existing quality control systems and their application in modifying and updating the production process and the HACCP system. The advantages of the TQM / HACCP system may be summarized as follows: a) It prevents operational faults and defects by early detection of preventable mechanical and human errors. b) It facilitates critical decision-making based on reliable data. c) It eventually affords zero-tolerance in food related health hazards and diseases. d) It reduces wastage and losses in input and thereby produces economic benefits. e) It improves efficiency in work processes and thereby reduces the cost of supervision and controls on the processing line, and increases workforce efficiency. The laboratory facilities available today in Israel are fully equipped to handle analyses of vitamins, minerals and heavy metal residues, amino acids, composition of foods, toxic and mutagenic residues and metabolism, microtoxins, histamines, cholesterol and triglycerids, pesticide residues and other environmental contaminants, such as P.C.B.s, microbial contaminants, parasitic organisms, fats and oils, food grade plastic and other packaging materials, biological metabolites (antibiotics and pharmaceuticals in the food chain) and natural and synthetic food coloring materials. TQM /HACCP have been applied for the past 12 years in six major hotel chains in Jerusalem, Eilat, Tiberias, Tel-Aviv and Haifa. It also operates in wedding halls, in fast food chains, restaurant chains, catering, industrial dining facilities and hospital services. The satisfaction expressed by several directors of these enterprises can be seen as proof of the ready acceptance, necessity and applicability of the system program. The available technical staff consists of a System Analyst, Veterinary Food Technologist, Quality Control Specialist, Food Toxicologist, Tool Design Specialist, Clinical Biochemist, Microbiologist and Veterinary Public Health Specialist. In all cases the food safety consultants will be, directed professionally by the technical staff of The Third Party Inspection Enterprise, but may be administratively engaged in one of three possible employer-employee relationships: i) Employment by the respective food service enterprise as a food safety consultant. ii) Employed as a food safety consultant by The Third Party Inspection Enterprise. iii) Employed by an independent food safety authority with government representatives and interested professional groups represented in a policy-making directorate, with authority for implementation delegated to The Third Party Inspection Enterprise or similar government recognized agencies. Remuneration for services rendered is calculated on the basis of the respective extent of activities of the client enterprises, volume and size of production or services rendered accordingly. Payments are made on an advance monthly basis, based on a full annual contract with mutual disengagement provisions.

2. Background and Development of the HACCP Approach HACCP is not a new idea: the concept was developed in the 1960s by the National Aeronautic Space Agency (NASA) and Natick Laboratories in the U.S.A. The approach to process control of food products was developed by the Pillsbury Company in cooperation with NASA and the U.S. Army's Natick Laboratories in 1971, due to problems encountered when Pillsbury was asked to design and produce the first foods to be used in space. Pillsbury realized that no one fully understood how food, and especially food particles, would behave at zero gravity. To address this problem, they developed bite-size foods coated with an edible material that would prevent the product from crumbling and would thus avoid potential contamination of the atmosphere. The most difficult part of the program was to come as close as possible to 100% assurance that the food products used for the space program would be free of pathogens, either bacterial or viral, that would cause an illness that might result in a failed or catastrophic mission. Pillsbury discovered that standard methods of quality control would not provide a sufficient assurance of food safety. Furthermore, the amount of product sampling, using standard bacteriological methodology that would be required to provide assurance, would be too great to make production practical. As a result of this investigation, Pillsbury began to question seriously the value of standard quality control methods then in use for the production of traditional products. They concluded after extensive evaluation that success would require having control over the process, the raw materials, the environment, and the people employed throughout the entire food processing system. The investigating team, led by Dr. Howard Bauman (1), believed that this preventive system would ensure the manufacture of food products with a high degree of safety assurance. For all practical purposes, if the system was operating correctly, there would be little need for testing the finished packaged product or meals other than for monitoring purposes. The Food and Drug Administration (FDA), the Food Service Inspection Service (FSIS) and the National Marine Fisheries Services (NMF), adopted the HACCP approach as being the appropriate protection system in the food industries and food services industries, because it had proved itself over 18 years of controlled operation under close industrial and government cooperation and surveillance. The HACCP system has been recommended by the National Academy of Science (NSA), the National Advisory Committee for Microbiological Criteria for Foods (NACHCF), and the Department of Defence (DOD). NASA has attributed the success in application by FDA, FSIS, and the NMFS in its Model Seafood Surveillance Program to four important factors: 1) Industry and government, working in cooperation, identified critical control points (CCP) and developed appropriate monitoring systems. 2) FDA required the training of key people involved in processing and food serving. 3) FDA inspectors were trained in the elements of HACCP, and plant inspections emphasized the review of monitoring results. 4) The use of HACCP was mandated by Federal Regulations. HACCP was originally instituted in volunteer plants and services, since the program was considered to be one of in-plant quality and food safety. FDA and FSIS subsequently integrated their inspection personnel in design and implementation of HACCP.

The regulations mentioned under #4 should identify the basic elements of the HACCP system, but they should not specify details of its application. The development of such details should be the prerogative of industry which has the legislated responsibility of implementing each HACCP program. 3. System Description The HACCP system as applied in a wide variety of plants and service organizations should be standardized to create uniformity in its work. 3.1 Definitions 3.1.1 Continuous monitoring: Uninterrupted recording of data such as recording of temperatures, pH and quicktest bacteriological indicators. 3.1.2 Control point: Any point in a specific food system where loss of control leads to an unacceptable health risk. 3.1.3 Critical control point: Any point or procedure in a specific food system where loss of control may result in an unacceptable health risk. 3.1.4 Critical defect: A defect that may result in hazardous or unsafe conditions for individuals using and depending upon the product. 3.1.5 Critical limit: One or more described tolerances that must be met to ensure that a critical control point effectively controls a microbiological hazard. 3.1.6 Deviation: Failure to meet a required critical limit for a critical control point. 3.1.7 HACCP Plan: The written document delineates the formal procedures to be followed in accordance with these general principles. 3.1.8 HACCP System: The result of the implementation of the HACCP principles. 3.1.9 Hazard: Any biological, chemical, or physical property that may cause an unacceptable consumer risk. 3.1.10 Monitoring: A planned sequence of observations or measurements of critical limits designed to produce an accurate record and intended to ensure that the critical limit maintains product safety. 3.1.11 Risk: An estimate of the likely occurrence of a hazard, danger or spoilage. 3.1.12 Risk category: A number of categories prioritizing risks based on food hazards. 3.1.13 Sensitive ingredients: Any ingredient historically associated with a known microbiological hazard. 3.1.14 Significant risk: Posing a moderate likelihood of causing an unacceptable health risk. 3.1.15 Spot check: Supplemental tests performed on a random basis. 3.1.16 Verification: Methods, procedures and tests used to determine if the HACCP system complies with the HACCP plan. 4. Purpose and Principles HACCP is a systematic approach to food safety, consisting of the following seven principles: 4.1 Assessment of hazards and risks associated with growing, harvesting, raw materials and ingredients, processing, manufacturing, distribution, marketing, preparation and consumption of food. 4.2 Determining Critical Control Points (CCP) required to control the identified hazard. 4.3 Establishing critical limits that must be met at each identified CCP. 4.4 Establishing procedures to monitor CCP.

4.5 Establishing corrective action to be taken when there is a deviation identified by monitoring a CCP. 4.6 Establishing effective record-keeping systems that document the HACCP plan. 4.7 Establishing procedures for verifying that the HACCP system is working correctly. 5. HACCP Plan Implementation 5.1 Describing the food and its intended use. 5.2 Developing a flow diagram for the production, processing and preparation of food. 5.3 Performing the hazard assessment (Re. 4.1). a) Ingredients prior to any processing step. b) Processing steps. c) End product. 5.4 Selection of CCP (Re. 4.2). a) entering in flow diagram. b) listing of CCPs by numbers. 5.5 Establishing the Critical Limits (Re. 4.3). 5.6 Establishing monitoring requirements (Re. 4.4). 5.7 Establishing corrective action to be taken when there is a deviation identified by monitoring of a CCP (Re. 4.5). 5.8 Establishing effective record-keeping systems that document the HACCP plan (Re. 4.6). 5.9 Establishing procedures for industrial and governmental verification that the HACCP system is working properly. Verification measures may include physical, chemical and sensory-organoleptic methods and the establishment of microbiological criteria (R. 4.7). 6. Conclusion: Advantages and the breaking down of potential barriers to assure food safety Among the food safety system programs used in the food production and food services industry, Hazard Analysis and Critical Control points (HACCP) is clearly the latest in a science-based approach to identify and correct microbiological, chemical and physical hazards. Its premium status stems from the fact that the HACCP approach is productive rather than reactive. HACCP focuses on prevention rather than correction, thereby safeguarding the finished product. Detecting contamination in post-processing, results in costly recalls, negative sales impact to the processor or food server, legal and ethical liabilities associated with people falling ill or causing death. The proper use of HACCP in conjunction with the prerequisite program obviously constitutes good business. In the Annex to this review of the HACCP concept, we present the results of a HACCP application in the food service industry comparing food safety performance in 2002 with 2003 in 41 hotels and 39 restaurants. The results, while encouraging, reflected very accurately what Dr. Peter Quantick, of the School of Biological and Food Sciences, University of Lincolnshire and Humberside, United Kingdom, described as the technical barriers to HACCP at the 1st NSF International Conference on Food Safety in Travel and Tourism in April 2000 in Barcelona, Spain (2). At present the HACCP system represents the most cost effective tool of controlling foodborne hazards, but after four years of mandatory HACCP in European countries, these tools

have not been thoroughly implemented in the food processing and cateringindustries, as was anticipated. For HACCP to be successfully implemented, it is necessary for it to be sustained by four pillars. THE HACCP PILLARS These are commitment, education and training, availability of resources and customer pressure. Dr. Peter Quantick analyzed a U.K. regional survey which indicated that though HACCP was widely implemented, there were some operators producing high risk products without proper safety controls in their operations. They were influenced by (1) facility size; (2) facilitating customers food safety requirements; (3) product type produced; (4) main processing operations used to process foods. Smaller enterprises may lack knowledge and expertise in HACCP, and the lack of appropriate factors such as time, manpower and management commitment to obtain the required knowhow. The technical barriers that may impede HACCP during and after implementation relate to (1) Staff, e.g. lack of time for training, motivation and supervision; (2) Management, e.g. lack of commitment and leadership; (3) Infrastructure, e.g. lack of equipment and correct plant layout, and (4) Enforcement by health authorities, e.g. lack of cooperation and educational aids. Barriers that may impede HACCP after its implementation are related to in terms such as Validation of the HACCP plan (third party auditing) and Equivalence of HACCP plans between locally and internationally related enterprises. Furthermore, incomplete preparation of the prerequisite program prior to application of the HACCP system will also impede correct implementation and is for all practical purposes a sine qua non requirement for successful application. Dealing with the above barriers will prove the system (HACCP) to be superior to all other efforts to reduce the incidence of food poisoning and food intoxications. To demonstrate the difficulties encountered in applying the HACCP system under Israeli conditions, we analyzed the data collected previously and compared the results of implementation in 2003 as compared to 2002 (attached in Appendix 1). In Appendix 2 we compar the results of the Streak / Dipslide method with the conventional pour plate method performed on the same food and surface samples. (A) Definitions Many terms are used in discussion of HACCP that must be clearly understood to effectively develop and implement a plan. The following definitions are provided for clarity: 1. Acceptable level means the presence of a hazard which does not pose the likelihood of causing an unacceptable health risk. 2. Control point means any point in a specific food system at which loss of control does not lead to an unacceptable health risk.

3. Critical control point, as defined in the Food Code, means a point at which loss of control may result in an unacceptable health risk. 4. Critical limit, as defined in the Food Code, means the maximum or minimum value to which a physical, biological, or chemical parameter must be controlled at a critical control point to minimize the risk that the identified food safety hazard may occur. 5. Deviation means failure to meet a required critical limit for a critical control point. 6. HACCP plan, as defined in the Food Code, means a written document that delineates the formal procedures for following the HACCP principles developed by The National Advisory Committee on Microbiological Criteria for Foods. 7. Hazard, as defined in the Food Code, means a biological, chemical, or physical property that may cause an unacceptable consumer health risk. 8. Monitoring means a planned sequence of observations or measurements of critical limits designed to produce an accurate record and intended to ensure that the critical limit maintains product safety. Continuous monitoring means an uninterrupted record of data. 9. Preventive measure means an action to exclude, destroy, eliminate, or reduce a hazard and prevent recontamination through effective means. 10. Risk means an estimate of the likely occurrence of a hazard. 11. Sensitive ingredient means any ingredient historically associated with a known microbiological hazard that causes or contributes to production of a potentially hazardous food as defined in the Food Code. 12. Verification means methods, procedures, and tests used to determine if the HACCP system in use is in compliance with the HACCP plan. (B) History The application of HACCP to food production was pioneered by the Pillsbury Company with the cooperation and participation of the National Aeronautic and Space Administration (NASA), Natick Laboratories of the U.S. Army, and the U.S. Air Force Space Laboratory Project Group. Application of the system in the early 1960's created food for the United State's space program that approached 100% assurance against contamination by bacterial and viral pathogens, toxins, and chemical or physical hazards that could cause illness or injury to astronauts. HACCP replaced end-product testing to provide food safety assurance and provided a preventive system for producing safe food that had universal application. In the succeeding years, the HACCP system has been recognized worldwide as an effective system of controls. The system has undergone considerable analysis, refinement, and testing and is widely accepted in the United States and internationally. (C) Advantages of HACCP FDA is recommending the implementation of HACCP in food establishments because it is a system of preventive controls that is the most effective and efficient way to ensure that food

products are safe. A HACCP system will emphasize the industry's role in continuous problem solving and prevention rather than relying solely on periodic facility inspections by regulatory agencies. HACCP offers two additional benefits over conventional inspection techniques. First, it clearly identifies the food establishment as the final party responsible for ensuring the safety of the food it produces. HACCP requires the food establishment to analyze its preparation methods in a rational, scientific manner in order to identify critical control points and to establish critical limits and monitoring procedures. A vital aspect of the establishment's responsibility is to establish and maintain records that document adherence to the critical limits that relate to the identified critical control points, thus resulting in continuous self-inspection. Secondly, a HACCP system allows the regulatory agency to more comprehensively determine an establishment's level of compliance. A food establishment's use of HACCP requires development of a plan to prepare safe food. This plan must be shared with the regulatory agency because it must have access to CCP monitoring records and other data necessary to verify that the HACCP plan is working. Using conventional inspection techniques, an agency can only determine conditions during the time of inspection which provide a "snapshot" of conditions at the moment of the inspection. However, by adopting a HACCP approach, both current and past conditions can be determined. When regulatory agencies review HACCP records, they have, in effect, a look back through time. Therefore, the regulatory agency can better ensure that processes are under control. Traditional inspection is relatively resource-intensive and inefficient and is reactive rather than preventive compared to the HACCP approach for ensuring food safety. Regulatory agencies are challenged to find new approaches to food safety that enable them to become more focused and efficient and to minimize costs wherever possible. Thus, the advantages of HACCP-based inspections are becoming increasingly acknowledged by the regulatory community. Examples of the successful implementation of HACCP by food establishments may be found throughout the food industry. During the past several years, FDA and a number of state and local jurisdictions have worked with two national voluntary pilot projects for retail food stores and restaurants. These projects involved more than 20 food establishments and demonstrated that HACCP is a viable and practical option to improve food safety. FDA believes that HACCP concepts have matured to the point at which they can be formally implemented for all food products on an industry-wide basis. 2. HACCP PRINCIPLES (A) Background of NACMCF Established in 1988, the National Advisory Committee on Microbiological Criteria for Foods (NACMCF) is an advisory committee chartered under the U.S. Department of Agriculture (USDA) and comprised of participants from the USDA (Food Safety and Inspection Service), Department of Health and Human Services (U.S. Food and Drug Administration and the Centers for Disease Control and Prevention), the Department of Commerce (National Marine Fisheries Service), the Department of Defense (Office of the Army Surgeon General), academia, industry and state employees. NACMCF provides guidance and recommendations to the Secretary of Agriculture and the Secretary of Health and Human Services regarding the microbiological safety of foods. (B) Development of HACCP Principles In November 1992, NACMCF defined seven widely accepted HACCP principles that were to be considered when developing a HACCP plan. In 1997, the NACMCF reconvened the HCCP

Working Group to review the Committee's November 1992 HACCP document and to compare it to current HACCP guidance prepared by the CODEX Committee on Food Hygiene. From this committee, HACCP was defined as a systematic approach to the identification, evaluation and control of food safety hazards based on the following seven principles: Principle 1: Conduct a hazard analysis. Principle 2: Determine the critical control points (CCPs). Principle 3: Establish critical limits. Principle 4: Establish monitoring procedures. Principle 5: Establish corrective actions. Principle 6: Establish verification procedures. Principle 7: Establish record-keeping and documentation procedures. PRINCIPLE #1: HAZARD ANALYSIS (a) Purposes The hazard analysis process accomplishes three purposes: 1. Hazards of significance are identified; 2. The hazard analysis provides a risk basis for selecting likely hazards; 3. Identified hazards can be used to develop preventive measures for a process or product to ensure or improve food safety. Before beginning to develop a HACCP plan, a team should be assembled that is familiar with the overall food operation and the specific production processes to be included in the plan. The team's goal and each member's responsibilities in reaching that goal must be clearly defined. The first step in the development of a HACCP plan for a food operation is identification of hazards associated with the product. A hazard may be a biological, chemical, or physical property that can cause a food to be unsafe. The analysis of hazards requires the assessment of two factors with respect to any identified hazard, i.e., the likelihood that the hazard will occur and the severity if it does occur. Hazard analysis also involves establishment of preventive measures for control. Hazards that involve low risk and that are not likely to occur need not be considered for the purposes of HACCP. To be effectively addressed, hazards must be such that their prevention, elimination, or reduction to acceptable levels is attained. Numerous issues have to be considered during hazard analysis. These relate to factors such as ingredients, processing, distribution, and the intended use of the product. These issues include whether a food contains sensitive ingredients that can create microbiological, chemical, or physical hazards; or whether sanitation practices that are used can introduce these hazards to the food that is being prepared or processed. An example is whether the finished food will be heated by the consumer, if it is consumed off the premises. Even factors beyond the immediate control of the food establishment, such as how the food will be treated if taken out by the consumer and how it will be consumed, must be considered because these factors could influence how food should be prepared or processed in the establishment. (b) Flow Diagram Consequently, a flow diagram that delineates the steps in the process from receipt to sale or service forms the foundation for applying the seven principles. The significant hazards associated with each step in the flow diagram should be listed along with preventative measures proposed to control the hazards. This tabulation will be used under Principle 2 to determine the CCPs. The flow diagram should be constructed by a HACCP team that has knowledge and expertise on the product, process, and the likely hazards. Each step in a process should be

identified and observed to accurately construct the flow diagram. Some examples of flow diagrams are found at the end of this Annex. (c) Biological Hazards Foodborne biological hazards include bacterial, viral, and parasitic organisms. These organisms are commonly associated with humans and with raw products entering the food establishment. Many of these pathogens occur naturally in the environment where foods are grown. Most are killed or inactivated by adequate cooking and numbers are kept to a minimum by adequate cooling during distribution and storage. Bacterial pathogens comprise the majority of reported foodborne disease outbreaks and cases. A certain level of the pathogens can be expected with some raw foods. Temperature abuse, such as improper hot or cold holding temperatures, can significantly magnify this number. Cooked food which has been subject to cross-contamination with pathogens often provides a fertile medium for their rapid and progressive growth. Enteric viruses can be foodborne, waterborne, or transmitted from a person or from animals. Unlike bacteria, a virus cannot multiply outside of a living cell. Hepatitis A and Norwalk viruses are examples of viral hazards associated with ready-to-eat foods. Parasites are most often animal host-specific and can include humans in their life cycles. Parasitic infections are commonly associated with undercooking meat products or cross contamination of ready-to-eat food. Fishborne parasites in products that are intended to be eaten raw, marinated, or partially cooked can be killed by effective freezing techniques. (d) Chemical Hazards Chemical hazards in foods should be considered during a hazard analysis. Chemical contaminants may be naturally occurring or may be added during the processing of food. Harmful chemicals at very high levels have been associated with acute cases of foodborne illnesses and can be responsible for chronic illness at lower levels. The following table provides some examples of chemical hazards found within the naturally occurring and added chemical categories. The Code of Federal Regulations, Title 21, provides guidance on naturally occurring toxic substances and allowable limits for many of the chemicals added during processing (food additives). The FDA Compliance Policy Guidelines also provide information on other naturally occurring chemicals. (e) Food Allergens Each year the Food & Drug Administration (FDA) receives reports of consumers who experienced adverse reactions following exposure to an allergenic substance in foods. Food allergies are abnormal responses of the immune system, especially involving the production of allergen-specific IgE antibodies, to naturally occurring proteins in certain foods that most individuals can eat safely. Frequently such reactions occur because the presence of the allergenic substances in the foods is not declared on the food label. To combat this problem, the agency issued a letter titled "Notice to Manufacturers," dated June 10, 1996, which addressed labeling issues and Good Manufacturing Practices (GMPs). This letter is available on FDA's web site. FDA believes there is scientific consensus that the following foods can cause serious allergic reactions in some individuals and account for more than 90% of all food allergies. Peanuts; Soybeans; Milk; Eggs; Fish; Crustacea; Tree nuts; Wheat Current FDA policy, as reflected in FDA Compliance Policy Guide (CPG) 555.250 with regard to direct addition as ingredients or sub-ingredients, is:

Products which contain an allergenic ingredient by design must comply with 21 U.S.C. 343(i)(2). Where substances that are, bear, or contain allergens are added as ingredients or sub-ingredients (including rework), the Federal Food, Drug, and Cosmetic Act (the Act) requires a complete listing of the food ingredients (section 403(i)(2); 21 U.S.C. 343(i)(2); 21 C.F.R.101.4 (689 KB)) unless a labeling exemption applies. FDA's Regulations (21 CFR 101.100(a)(3) (689 KB)), provide that incidental additives, such as processing aids, which are present in a food at insignificant levels and that do not have a technical or functional effect in the finished food are exempt from ingredient declaration. Some manufacturers have asserted to FDA that some allergens used as processing aids qualify for this exemption. FDA, however, does not consider food allergens eligible for this exemption. Evidence indicates that some food allergens can cause serious reactions in sensitive individuals upon ingestion of very small amounts; therefore, the presence of an allergen must be declared in accordance with 21 CFR 101.4 (689 KB). Allergens may be unintentionally added to food as a result of practices such as improper rework addition, product carry-over due to use of common equipment and production sequencing, or the presence of an allergenic product above exposed product lines. Such practices with respect to allergenic substances can be insanitary conditions that may render the food injurious to health and adulterate the product under section 402(a)(4) of the Act [21 U.S.C. 342(a)(4)]. (f) Physical Hazards Illness and injury can result from hard foreign objects in food. These physical hazards can result from contamination and/or poor procedures at many points in the food chain from harvest to consumer, including those within the food establishment. As establishments develop their HACCP programs, the following table can be used to further identify sources of potential physical risks to the food being prepared, served, or sold. Table 3. Main Materials of Concern as Physical Hazards and Common Sourcesa,b Material Glass fixtures Wood Stones, metal fragments Insulation Bone Plastic Personal effects Injury Potential Cuts, bleeding; may require surgery to find or remove Cuts, infection, choking; may require surgery to remove Choking, broken teeth Cuts, infection; may require surgery to remove Choking; long-term if asbestos Choking, trauma Choking, cuts, infection; may require surgery to remove Choking, cuts, broken teeth; may require surgery to remove Sources Bottles, jars, light, utensils, gauge covers Fields, pallets, boxes, buildings Fields, buildings, machinery, fields, wire, employees Building materials Fields, improper plant processing Fields, plant packaging materials, pallets, employees Employees

(f) Determining Level of Risk The potential significance or risk of each hazard should be assessed by considering its likelihood of occurrence and severity. The estimate of risk for a hazard occurring is based upon a combination of experience, epidemiological data, and information in the technical literature. Severity is the degree of seriousness of the consequences of a hazard if it were to become an actuality. Hazard identification in conjunction with risk estimation provides a rational basis for determining which hazards are significant and must be addressed in the HACCP plan. To determine risk during the hazard analysis, safety concerns must be differentiated from quality concerns. A food safety hazard is a biological, chemical, or physical property that may cause a food to be unsafe. There may be differences of opinion, even among experts, as to the risk of a hazard. The food establishment must rely upon the expert opinion published in peer reviewed literature or experts who actively assist in the development of the HACCP plan. The hazards must at least include those that are commonly associated with a specific product. If a hazard that is commonly associated is dismissed from the plan, the basis for rejecting it must be clearly stated in the hazard analysis so that it is understood and agreed to by the regulatory authority reviewing the HACCP plan. (g) Hazard Analysis Process This point in hazard analysis consists of asking a series of questions which are appropriate to each step in the flow diagram. The hazard analysis should question the effect of a variety of factors upon the safety of the food. 1. Ingredients o Does the food contain any sensitive ingredients that are likely to present microbiological hazards (e.g., Salmonella, Staphylococcus aureus), chemical hazards (e.g., aflatoxin, antibiotic, or pesticide residues) or physical hazards (stones, glass, bone, metal)? 2. Intrinsic factors of food Physical characteristics and composition (e.g., pH, type of acids, fermentable carbohydrate, water activity, preservatives) of the food during and after preparation can cause or prevent a hazard. o Which intrinsic factors of the food must be controlled in order to ensure food safety? o Does the food permit survival or multiplication of pathogens and/or toxin formation in the food before or during preparation? o Will the food permit survival or multiplication of pathogens and/or toxin formation during subsequent steps of preparation, storage, or consumer possession? o Are there other similar products in the market place? What has been the safety record for these products? 3. Procedures used for preparation/processing o Does the preparation procedure or process include a controllable step that destroys pathogens or their toxins? Consider both vegetative cells and spores. o Is the product subject to recontamination between the preparation step (e.g., cooking) and packaging? 4. Microbial Content of the Food o Is the food commercially sterile (i.e., low acid canned food)? o Is it likely that the food will contain viable sporeforming or nonsporeforming pathogens? o What is the normal microbial content of the food stored under proper conditions? o Does the microbial population change during the time the food is stored before consumption?

Does that change in microbial population alter the safety of the food? 5. Facility design o Does the layout of the facility provide an adequate separation of raw materials from ready-toeat foods? o Is positive air pressure maintained in product packaging areas? Is this essential for product safety? o Is the traffic pattern for people and moving equipment a potentially significant source of contamination? 6. Equipment design o Will the equipment provide the time/temperature control that is necessary for safe food? o Is the equipment properly sized for the volume of food that will be prepared? o Can the equipment be sufficiently controlled so that the variation in performance will be within the tolerances required to produce a safe food? o Is the equipment reliable or is it prone to frequent breakdowns? o Is the equipment designed so that it can be cleaned and sanitized? o Is there a chance for product contamination with hazardous substances, e.g., glass? o What product safety devices such as time/temperature integrators are used to enhance consumer safety? 7. Packaging o Does the method of packaging affect the multiplication of microbial pathogens and/or the formation of toxins? o Is the packaging material resistant to damage, thereby preventing the entrance of microbial contamination? o Is the package clearly labeled "Keep Refrigerated" if this is required for safety? o Does the package include instructions for the safe handling and preparation of the food by the consumer? o Are tamper-evident packaging features used? o Is each package legibly and accurately coded to indicate production lot? o Does each package contain the proper label? 8. Sanitation o Can the sanitation practices that are employed impact upon the safety of the food that is being prepared? o Can the facility be cleaned and sanitized to permit the safe handling of food? o Is it possible to provide sanitary conditions consistently and adequately to ensure safe foods? 9. Employee health, hygiene, and education o Can employee health or personal hygiene practices impact the safety of the food being prepared? o Do the employees understand the food preparation process and the factors they must control to ensure safe foods? o Will the employees inform management of a problem which could impact food safety? 10. Conditions of storage between packaging and the consumer o What is the likelihood that the food will be improperly stored at the wrong temperature? o Would storage at improper temperatures lead to a microbiologically unsafe food? 11. Intended use o Will the food be heated by the consumer? o Will there likely be leftovers?

12. Intended consumer o Is the food intended for the general public, i.e., a population that does not have an increased risk of becoming ill. o Is the food intended for consumption by a population with increased susceptibility to illness (e.g., infants, the elderly, the infirm, and immunocompromised individuals)? (h) Developing Preventive Measures The preventive measures procedure identifies the steps in the process at which hazards can be controlled. After identifying the hazards the food establishment must then consider what preventive measures, if any, can be applied for each hazard. Preventive measures are physical, chemical, or other factors that can be used to control an identified health hazard. More than one preventive measure may be required to control a specific hazard and more than one hazard may be controlled by a specified preventive measure. For example, if a HACCP team were to conduct a hazard analysis for the preparation of hamburgers from frozen beef patties, enteric pathogens on the incoming raw meat would be identified as a potential hazard. Cooking is a preventive measure which can be used to eliminate this hazard. Thus, cooking, the preventive measure, would be listed along with the hazard (i.e., enteric pathogens) as follows: Step Cooking Identified Hazard Enteric pathogens Preventive Measures Cooking sufficiently to kill enteric pathogens

HACCP PRINCIPLE #7: ESTABLISH EFFECTIVE RECORD KEEPING SYSTEMS THAT DOCUMENT THE HACCP SYSTEM (a) Written HACCP Plan This principle requires the preparation and maintenance of a written HACCP plan by the food establishment. The plan must detail the hazards of each individual or categorical product covered by the plan. It must clearly identify the CCPs and critical limits for each CCP. CCP monitoring and record keeping procedures must be shown in the establishment's HACCP plan. HACCP plan implementation strategy should be provided as a part of the food establishment's documentation. (b) Record Keeping The principle requires the maintenance of records generated during the operation of the plan. The record keeping associated with HACCP procedures ultimately makes the system work. One conclusion of a study of HACCP performed by the U.S. Department of Commerce is that correcting problems without record keeping almost guarantees that problems will recur. The requirement to record events at CCPs on a regular basis ensures that preventive monitoring is occurring in a systematic way. Unusual occurrences that are discovered as CCPs are monitored or that otherwise come to light must be corrected and recorded immediately with notation of the corrective action taken. The level of sophistication of the record keeping necessary for the food establishment is dependent on the complexity of the food preparation operation. A sous vid process or cook-chill operation for a large institution would require more record keeping than a limited menu cookserve operation. The simplest effective record keeping system that lends itself well to integration within the existing operation is best. (c) Contents of the Plan and Records:The approved HACCP plan and associated records must be on file at the food establishment. Generally, the following are examples of documents that can be included in the total HACCP system:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Listing of the HACCP team and assigned responsibilities; Description of the product and its intended use; Flow diagram food preparation indicating CCPs; Hazards associated with each CCP and preventive measures; Critical limits; Monitoring system; Corrective action plans for deviations from critical limits; Record keeping procedures; and Procedures for verification of HACCP system. (d) Format for HACCP Information In addition to listing the HACCP team, product description and uses, and providing a flow diagram, other information in the HACCP plan can be tabulated as follows: The following chart is an example of a HACCP plan documentation for a product cooling step in a retail level food establishment. PROCESS STEP CCP Criteria or Critical Limit Establish Monitoring Corrective/Preventive Action HACCP Records HACCP System Verification COOLING Critical Control Point #8 Cool Foods Rapidly in Small Quantities to 5C (41F) Department Personnel Break Down Food into Small Quantities and Monitor The Cooling Process Modify Cooling Procedures/ Discard Deli Cooking/Cooling Log Deli Safety Audit by Store Manager

(e) Examples of Records obtained during the operation of the plan: 1. Ingredients o Supplier certification documenting compliance with establishment's specifications. o Establishment audit records verifying supplier compliance. o Storage temperature record for temperature-sensitive ingredients. o Storage time records of limited shelf-life ingredients. 2. Preparation o Records from all monitored CCPs. o Records verifying the continued adequacy of the food preparation procedures. 3. Packaging o Records indicating compliance with specifications of packaging materials. o Records indicating compliance with sealing specifications. 4. Finished product o Sufficient data and records to establish the efficacy of barriers in maintaining product safety. o Sufficient data and records establishing the safe shelf-life of the product; if age of product can affect safety. o Documentation of the adequacy of the HACCP procedures from an authority knowledgeable of the hazards involved and necessary controls. 5. Storage and distribution o Temperature records.

Records showing no product shipped after shelf life date on temperature-sensitive products. 6. Deviation and corrective action o Validation records and modification to the HACCP plan indicating approved revisions and changes in ingredients, formulations, preparation, packaging, and distribution control, as needed. 7. Employee training o Records indicating that food employees responsible for implementation of the HACCP plan understand the hazards, controls, and procedures. Refer to the discussion regarding Training and Knowledge under Principle #7.