Policy strengthens process for exporting U.S.-labeled products around the world

Kellogg's best-in-class supply chain security program recently got even better.

Our company conducts a huge amount of sea-based shipping each year for the transport of finished product and other materials around the globe. Air, rail and over-the-road transportation is also utilized to get materials from one Kellogg operation to another, as well as to customers and distributors.

Our North American Import/Export team - which annually ships an average of 8,000 orders from the United States to 95 countries and territories worldwide - enacted a new policy that establishes strict, globally consistent standards governing the export of U.S.-labeled products.

"The Kellogg Export Policy for U.S.-Labeled Product provides a more tightly controlled process for our export activities and uniformly applies them to all Kellogg businesses around the world," explains Aline Harvel, Manager, International Customer Service. "It applies to all transactions, whether we're exporting product for an intercompany sale or to one of our company's approved distribution partners."

Aline adds, "The policy also ensures that our company is in total compliance with the U.S. Department of Commerce's export regulations, which require that we file complete and accurate export documentation with the U.S. Food and Drug Administration and Department of Commerce. This not only allows us to take advantage of various credits and trade incentives, but also keeps us from being at risk for stiff federal penalties for noncompliance."

Top tier

Kellogg already possesses the U.S. government’s highest level of security certification that can be earned by an American company: the U.S. Customs and Border Protection (CBP) agency’s highly coveted Tier Three status.

Kellogg was initially granted Tier One status through the CBP’s Customs Trade Partnership Against Terrorism (C-TPAT) program in 2004. We achieved Tier Three two years later following a comprehensive supply chain audit that involved the efforts of individuals and teams across numerous departments. This certification greatly reduces the need for our cargo shipments to undergo Homeland Security inspections when they enter the United States - saving Kellogg significant time and money.

"The quality, safety and integrity of our products is, of course, our No. 1 priority here at Kellogg, and it's vitally important that we maintain the best-in-class supply chain security standards that we're known for," says Bill Duggan, Vice President, Corporate Services, and Chief Security Officer.

The C-TPAT program, a joint agreement between the CBP and companies like Kellogg, was developed in response to the terrorism threat following the Sept. 11, 2001, attacks. At its core is a simple goal: protect the nation’s food supply while supporting the free flow of goods and the continued growth of international trade.

Minimizes diversion

In addition to establishing a more tightly controlled export process and assuring compliance with federal regulations, the Kellogg Export Policy for U.S.-Labeled Product ensures the traceability of products we export to other countries and minimizes product being diverted back to customers in the United States.

"Essentially, the policy reduces the risk of diversion - situations in which exported product is sold via unauthorized means back into into the U.S. marketplace at a lower price," explains Pat Coats, Senior Manager, Diversion and Returns Management. "When this happens, Kellogg can lose a significant portion of revenue on those products."

Before any of our U.S. products can be exported to another geographic area, the new policy requires that the transaction be approved by Kellogg North America Supply Chain management as well as by the business leader of the area in which the product will be shipped. The U.S. Cross-Channel Operations department coordinates the approval process.

Plus, potential export customers must be approved by a cross-functional Account Review Team, comprised of representatives from our Cross-Channel Operations, Customer Logistics Services and Corporate Security organizations.

All product to be exported must meet the licensing, regulatory and labeling regulations, as well as other applicable legal requirements, of both the United States and the country to which it'll be exported.

With worldwide concern about the safety and security of the global food supply at an all-time high, taking these additional steps to assure the integrity of our exported products helps to protect consumers as well as Kellogg's reputation.

"Overall, this new export policy not only strengthens our commitment to the
C-TPAT program," Bill says, "but it also clearly demonstrates Kellogg's commitment to the safety of our products and our consumers - and, ultimately, that is our most important concern."