ePedigree Delay a Sign of An Eventual Supply Chain U.N.?

StevenSimske — Thu, 20 Nov 2008 05:49:00 GMT

I have been remiss in discussing the delay in the California ePedigree until 2015. This has been interpreted as a long-term delay for track and trace and overall product safety. For a nice overview and analysis of the problem, see http://www.industryweek.com/ReadArticle.aspx?ArticleID=17793.

However, ePedigree initiatives are underway by the WHO, FDA, EU, AQSIQ (China), GS1 and other standards/regulatory organizations. A full serialization+pedigree requirement may be delayed until 2015, but it is unlikely that ePedigree will not already be in place before then. Recent passing of PRO-IP and Country-of-origin labeling (COOL) legislation in the US indicates that the US,too, will continue with initiatives before 2015.

The delay of California ePedigree legislation, moreover, may be indicative of another passing of the torch. Much as the recent Presidential (and Congressional) election results likely signal a more collaborative, less "independent" US foreign policy, the delay in ePedigree may signal a more collaborative, less independent nation-to-nation legislation in the future.

Will the big players--WHO, FDA, EU, AQSIQ, GS1, ISO, and others--work together to create a reasonable roadmap for product track and trace, pedigree and provenance? In effect, create a "United Nations" for track and trace? I, for one, hope so. With the increasingly convoluted supply chains for virtually all products resulting in chaos during recall, fraud and even normal node-node shipping situations (how many retailers can confidently tell you everywhere a product has been on its way to their shelves?), how long can it be before the legitimate market says, "enough is enough"? Plus, a universal process will reduce confusion, lower cost, and improve response time around the planet.

Is the current combination of counterfeiting, diversion, factory overrun, smuggling, return fraud and other supply chain crime the commerce equivalent of the two World Wars? A series of events so drastic that the set of collective players decides to band together into a United Nations to try to prevent such a meltdown in the future? (I realize the United Nations is by no means perfect--but we have been without nuclear combat for 63 years...). Maybe so. And maybe the delay in the California ePedigree shows that the US, rather than defining the path forward, is willing to work with the rest of the Supply Chain United Nations in formulating the optimum set of requirements moving forward.

-Steve

Tomatoes that terrorize--or the recall to recall

StevenSimske — Sat, 21 Jun 2008 06:15:00 GMT

There are three topics that, as part of the HP community blog team, we are not to discuss on our blog: religion, politics and the ingredients in a hot dog. The topic I discuss tonight is a close fourth. So, I will try to be a little delicate here.

The recent tomato recall (http://www.fda.gov/oc/opacom/hottopics/tomatoes.html) may end up being as severe to the tomato industry as the cod moratorium has been to the Newfoundland fishing industry. Based on the cost of present goods and the infrastructure depreciation, etc., a year's loss of sales translates into roughly 10% lost value in an entire industry. Meaning that no tomato sales this year, and the tomato industry is worth 90% of what it was worth before this year...for a long, long time. Was that 10% factored into the "streamlined" supply chain the tomato--like any other agricultural--industry uses to reduce costs, provide just-in-time inventory, and devalue tomato picking? Of course not. Like counterfeiting, massive recalls are simply not modeled by the proponents of the just-in-time, multi-input, massive throughput supply chains that describe virtually every product type on the planet today.

We all know the stories about how many different cattle you're eating when you eat a burger (again, I must not talk about the hot dogs)--it's in the dozens. But do we know how many different raw material providers are involved in the production of a pharmaceutical? Of a tea bag? Of an automobile? Dozens, hundreds, thousands? The more there are, the harder it is to audit each and every element of the product provenance. So many have given up trying. Close your eyes, pretend it won't happen to you, and when it does, well, pull everything off the shelves--TOTAL RECALL. Aside from the incredible waste of such a recall, the lauded efficiencies of scale under non-recall situations simply don't ring true either.

For the food industry, one need look no further than Pollan's excellent book, the Omnivore's Dilemma (http://www.michaelpollan.com/omnivore.php), to see how "supply chain efficiency" has resulted in tragic inefficiency (fossil fuels are converted into corn syrup that converts us into obese diabetics). An Amazon.com (Bunny Crumpacker's) review of it (http://www.amazon.com/Omnivores-Dilemma-Natural-History-Meals/dp/1594200823) notes ominously:

"Each bushel of industrial corn grown, Pollan notes, uses the equivalent of up to a third of a gallon of oil. Some of the oil products evaporate and acidify rain; some seep into the water table; some wash into rivers, affecting drinking water and poisoning marine ecosystems. The industrial logic also means vast farms that grow only corn. When the price of corn drops, the solution, the farmer hopes, is to plant more corn for next year. The paradoxical result? While farmers earn less, there's an over-supply of cheap corn, and that means finding ever more ways to use it up."

All this to have a just-in-time inventory? When gas hits $10/gallon (and it will...soon) will it still be worth it? It costs nearly $1000/day to run a farm tractor already (just ask a farmer). Why have we allowed this to happen?

So, add recalls to the lengthening list of why outsourcing to unaffiliated parties is a recipe for disaster. Here is the potentially delicate subject. I am not against all out-sourcing, and a true Flat Earth is not a bad thing. But we all know that the earth looks flat from space (the earth is size-proportionately smoother than a cue ball), but up close it has all these inconvenient hills, dales, valleys, vales, arroyos, lifts, canyons and rifts. It's messy in the details. Nothing is flat, not even Friedman's cerebral cortex (sorry, too easy a joke there, but Friedman seems to think that people with the manufacturing jobs somehow won't learn how to design and be creative--a huge oversight, in my opinion). If you outsource to people you're intentionally hiring to save costs, you have opposing motivations. You want them to cost less, they don't care if you succeed. You think they're cheaper than employees, they think you're too overstretched to look too closely.

In short, you're asking them to try to cheat you. Guess what? In many cases, they're happy to oblige. And it serves you right. Outsourcing to disenfranchised third parties is a very short-term strategy that has been deployed for medium-to-long-term already. Take a cup of cluelessness, add a dash of denial, and you've got a supply chain that doesn't hold to inspection.

Which brings us back to those terrorizing tomatoes. What went wrong? Sure, Sam and Ella, that dynamic duo, reared their ugly heads. The problem was, no one knew where their necks were. The supply chain is simply too convoluted, with too many on and off ramps, that trying to do a partial recall is simply not worth the effort.

Time to reclaim the supply chain. It's not just about counterfeiting. It's about knowing what you're actually getting.

-Steve

Security Printing and Imaging : Recall, Supply Chain

ePedigree Delay a Sign of An Eventual Supply Chain U.N.?

Tomatoes that terrorize--or the recall to recall