Is Your Supply Chain Broken? 5 Questions CEOs Should Ask

Is your supply chain broken or about to break?

Is your supply chain broken or about to break?

A recent story in Industry Week reiterates the importance that C-level executives need to monitor and manage their supply chains.  The story, written by two supply chain experts at Wipro Consulting, details five questions that CEOs should be asking about the condition and status of their supply chains – especially in light of recent news items such as the “horsegate” problem in Europe relating to horsemeat being included in beef products. The authors raise the question of whether or not the scale of the supply chain might in and of itself have been a contributing factor in quality control failures.

One key point they make: if you think quality in a supply chain is just having the right materials in the right place at the right time, you’re not thinking broadly enough. Supply chain management must also focus on the quality of the materials, the accuracy and content value in the information shared between supplier and customer, and the accuracy and timeliness in the financial transactions.

They suggest that it makes financial sense to proactively manage your supply chain to make sure it is designed to be successful and propose five questions that every CEO should ask:

1. Is quality built into your supply chain, or do inspection and correction occur after the fact?

2. Is supply chain management a strategic senior level position in your organization or is it a part of an operations activity?

3. Is the movement of information and money as critical in your supply chain as the movement of materials? In other words, does it take longer to create paperwork and process payments than it takes to deliver the goods?

4. Do you have a built-in change management process that constantly reviews the elements of your supply chain and looks for opportunities to improve quality and operational efficiency—or do your systems, policies and procedures block improvement?

5. Does your supply chain minimize the amount of touches and the touch time in supply chain transactions, so as to reduce the number of potential failure points?

All too often, we at Intelleflex see supply chains (especially cold chains) that are primarily reactive. Information about the condition of a product that has spoiled or been exposed to adverse conditions is available only after-the-fact when it is too late to take corrective action. Additionally, information is not typically easily shared between supply chain partners and too much of the record keeping is paper-based which slows down supply chain operations and can introduce costly errors.

The article proposes some answers to these questions stating that the issues relate to culture, capability, flexibility, capacity and technology, systems and processes, repeatability and reliability, and collaboration.

Solutions that provide the ability to automatically capture and collect information electronically about products as they move through the supply chain is essential.  But, equally important is the ability to access, share and act upon that data. RFID and cloud-based data services (such as ZEST Data Services) can help make this happen and not only improve supply chain operations but provide valuable information to supply chain executives that provides the ability to proactively manage an intelligent supply chain.

The article concludes with some wise advice: It shouldn’t take a high-profile quality control failure for CEOs to take a fresh look at what’s happening in their own organization since a supply chain failure of any kind could devastate or destroy profitability. Start being proactive by asking the five key questions and ensuring that your supply chain organization has a culture of collaboration, responsiveness and constant improvement.

You can read the entire Industry Week article here.

Kevin Payne
Senior Director of Marketing

Big Data in the Supply Chain? Why?

There's big benefits associated with Big Data

There’s big benefits associated with Big Data

Big Data is one of the hottest topics in business today. Companies in the financial, insurance, retail and a host of other industries are quickly realizing that the vast amounts of data being captured and collected can be of incredible strategic value to their business operations. The same holds true in the cold supply chain where literally hundreds of thousands of temperature, condition, waypoint and production data points can be collected for a single shipment.

But what can you do with this data and how do you make sense of it?

Making sense of it requires the ability to sift through the data to identify areas that require specific (and occasionally) immediate attention and essentially archiving and analyzing the rest of the data later to spot macro trends. Fortunately that technology exists to do this. When you identify events or issues that require immediate attention you can focus supply chain personnel’s attention directly on addressing those issues and event. For example, if a pallet of fruit or meat was left sitting on a loading dock, a temperature monitor can identify the issue and, via a reader connected to a cloud-based data service, can then notify a dock worker to collect that pallet and re-chill it immediately resulting in less waste, better quality and cost savings.

Where does the supply chain stand on Big Data?

EyeForTransport, a UK-based provider of business intelligence and C-level networking for the transport, logistics and supply chain industry, recently published their Supply Chain Big Data Report for 2013 (you can get a copy by filling out a form here), along with an accompanying infographic. The report, based on their survey done in February of this year with companies worldwide, reveals some interesting insights.

  • 84% of supply chain executives that think big data will have an impact on their company’s performance.
  • Over 61% of the supply chain executives said they were currently implementing 27.4% or considering (33.7%) implementing a big data analytics project.
  • When asked to rank leaders in the field, nearly 45% cited retailers and over 22% cited consumer goods manufacturers.

Why do so many supply chain executives think so much of Big Data? The top answer: to increase supply chain visibility.  Supply chain visibility means reducing costs (and improving efficiencies).  Respondents also said that they want to move away from making decisions using historical data and move towards real-time decision making.

One last interesting take-away: According to the EyeForTransport survey, of those executives currently implementing Big Data solutions, two thirds of those surveyed expect to see ROI on the project within 12 months.  That’s impressive. There’s that much value in the data and having the ability to improve supply chain visibility and real-time decision making.

Kevin Payne
Senior Director of Marketing

Food Security: Is it Really About Production?

Maybe production isn't the issue

Maybe production isn’t the issue

A colleague recently sent me a link to an interesting blog Open the Echo Chamber with a recent post by Edward Carr titled Doing Food Security Differently – Theme 1: Get Over Production. The main gist of the blog post has to do with feeding a growing global population.  There are two basic ways to feed an increasing global population:

  1. Produce more food.
  2. Waste less food.

Most commentators tend to focus on finding new technology and tools that will help us produce more food, more efficiently. As I’ve blogged about before, people tend to forget about the second option: finding ways to maximize post-harvest yield and waste less.  (We waste between $35 and $400 or so billion of food each year, depending on which source you cite.)

Carr’s blog post makes the point that production isn’t the issue and that we are already producing more than enough food to feed a growing planet and that we should instead focus our resources on the fact that we waste too much.  Some interesting comments in his blog post:

  • Every year, the Earth produces roughly twice the calories needed to feed every single human being.
  • There is no unavoidable global shortage that creates famine and hunger. Nor, in fact, are we likely to be looking at a global food shortage any time soon.
  • There is less excess marketable supply than ever before.  Note that there is less excess marketable supply – this is the amount of food we produce that actually reaches market, not the total amount of food grown and raised each year.

In Carr’s opinion:

The simple point here is that these trends are manageable if we can get over the idea of food security as a question of production. [Emphasis added.] The idea of scarcity is perhaps the biggest challenge we face in addressing the world’s food needs.  As long as food security policy and programs remain focused on solving scarcity, food security will remain focused on technical fixes for hunger: greater technology, greater inputs, greater efficiency.

Carr then adds:

Simply put, it is cheaper and easier to enhance agricultural extension to improve local food storage techniques, build and maintain good roads, and improve electrical grids and other parts of the cold chain that preserves produce from farm to market than it is to completely reengineer an agricultural ecology.  [Emphasis added.] It makes far more sense to make basic infrastructural investments than it does to tether ever more farmers to inputs that require finite fossil fuel and mineral resources.  It makes more sense to better train farmers in storing what they already produce in a manner that preserves more of the harvest than it does to invest billions in the modification of crops, especially when the bulk of genetic modification in agriculture these days is defensive – that is, guarding against future yield loss, not enhancing yields in the present.

I’m glad to see that I’m not the only one that sees reducing waste as an area where we should focus our attention. The technology exists for us to significantly reduce waste and get more fresh food to the consumer.  (And, yes, I believe our temperature monitors and ZEST Data Services are a part of this solution.) Yet the industry seems bent on the idea that billions of dollars of waste is an acceptable and unavoidable cost of doing business. It simply isn’t true.

Kevin Payne
Senior Director of Marketing

Bare Shelves at Walmart? $1.14 Billion in Strawberry Losses! What’s the Connection?

A story in Kevin Coupe’s Morning News Beat references Bloomberg as saying that: at a February 1, 2013 internal Walmart meeting, US CEO Bill Simon said that keeping shelves stocked has become a big problem, is “getting worse,” and is a “self-inflicted wound” that is the company’s “biggest risk.”

Where are my groceries?

Where are my groceries?

According to the piece, Walmart “has been trying to improve its restocking efforts since at least 2011, hiring consultants to walk the aisles and track whether hundreds of items are available. It even reassigned store greeters to replenish merchandise. The restocking challenge emerged as Wal-Mart was returning more merchandise to shelves after a previous effort to de-clutter its stores. Walmart’s inability to keep its shelves stocked coincides with slowing sales growth.”

While Bloomberg reports that Simon’s comments are taken from official minutes of the meeting, company spokesman David Tovar said they were “personal notes from one participant in the meeting and are not official company minutes,” and said that “there are a number of significant misinterpretations and misleading statements that do not accurately reflect the comments by Bill Simon or any other participant in the meeting.”

Tovar said that Walmart is happy with its in-stock positions.

Mr. Coupe then opines: No disrespect to Walmart, but I believe Tovar about as far as I can throw a supercenter. I’ve gotten a number of emails from folks in recent months suggesting that out-of-stocks has become a growing problem for Walmart, one that it has a hard time dealing with.

Coincidently, FreshPlaza recently reported that Walmart is donating $3 million to the University of Arkansas’ Center for Agricultural and Rural Sustainability to create and manage a national competitive grants program, awarding money for projects that will, among other things, expand where strawberries can be grown, enabling shorter trips for the berries between farm and consumer.

The story mentions that: “Strawberries are a highly perishable fruit with a short shelf life in the supply chain,” said Curt Rom, a horticulture professor for the Division of Agriculture, and part of the center’s leadership team. “Strawberries travel an average distance up to or exceeding 3,000 miles from farm to market.” Though prized for their delicate taste and texture, those same qualities can be the berries’ weakness – especially when hauled thousands of miles. It’s estimated that between the time the berries are picked to the time they reach the consumer, losses can reach 36 percent, with an annual value of $1.14 billion, Rom said.

Wow! $1.14 billion in losses – 36% of what’s harvested – between harvest and the consumer? Yikes, that’s a lot of berries! That’s a lot of money! Other academic and industry research shows that half of this loss is due to improper temperature management. One potential consequence of this loss: out-of-stocks.  If you’re a retailer and you’re expecting pallets of strawberries to replenish your shelves and discover upon delivery that they’ve spoiled, you may end up with an empty shelf and an unhappy customer who will turn to another retailer to buy their strawberries.

To be clear, I’m not suggesting that any Walmart out-of-stocks are specifically strawberries but the connection between the two stories is meant to drive home a point about the complexities and challenges associated with managing the supply chain to keep inventory in stock. If it is difficult to do for non-perishable items, imagine how much more challenging it is to ensure your high value produce, meat, seafood, poultry and dairy can be.

Kevin Payne
Senior Director of Marketing

US Ambassador Visits Intelleflex at Fruit Logistica

It was a special day at the Intelleflex stand at Fruit Logistica as Philip Murphy, the US Ambassador to Germany came by to greet the team.

Kevin Payne, US Ambassador Philip Murphy, Erik Cotman and Stephen Dunphy

Kevin Payne, US Ambassador Philip Murphy, Erik Cotman and Stephen Dunphy

The Ambassador was touring the US Pavilion at the show. Tens of thousands of people are at the show which concludes on Friday.

Kevin Payne

Senior Director of Marketing

Spring Training Means a Fresh Start

OK.  I’ll admit I’m fulfilling a life long ambition to blog about baseball and pay unabashed homage to my team but when the ballplayers show up for Spring Training I find it refreshing.  It’s a clean slate.  A fresh start.  You’re in first place.

Image

For the fifteenth year in a row, I was in Phoenix to watch my team (the Oakland Athletics) “freshen up” (and heaven knows, they need it at times).  Usually, come spring, the weather in Phoenix is warm and pleasant but, as you can see from the photo, sometimes weather is unpredictable.  This year started out with a nice 87 degree day. The next day it was 47 degrees and we had a hailstorm.  Unpredictable indeed!

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Now imagine if you were shipping produce or other perishable foods.  You can’t count on a consistent temperature.  That’s why it’s important to monitor the temperature of your product every step of the way. Fortunately, we can help you do that with our XC3 Technology readers and temperature monitoring tags.  You’ll have actionable data to know if your produce is at 87 or 47 and be able make proactive decisions to help ensure its delivered fresh to maximize value and your produce finishes in first place!

Hope your team does well too!

Kevin Payne

Senior Director of Marketing

HDMA Meeting in Florida…Alligators don’t bite but Serialization and ePedigree Might (and soon)

As a native Californian, I am particularly mindful (aka nervous) about alligators whenever I visit Florida.  And, while I didn’t see any gators on this trip, I did see some signs of nerves at this week’s Healthcare Distribution Management Association (HDMA) conference which was held in Orlando. Many, or perhaps more accurately most, of the people that came by the Intelleflex exhibit expressed concerns about the challenges yet remaining to meet upcoming serialization and e-Pedigree requirements.

Didn't see any of these but...

Across the industry it seems that most pharma manufacturers, 3PLs and couriers are still struggling to find ways to provide the next steps to take for serialization and e-pedigree, beyond item level where most agree that 2D is the way to go. In the case of carton-level, or pallet-level, temperature monitoring linked with a way to store integrity data that ensures the efficacy and safety of the product, still has a long way to go in terms of educating of the masses. One of the reasons is that folks across the industry simply are not happy with the solutions they’ve been forced to work with to date, but RFID is becoming a “buzz-word” again.

While 2D barcodes certainly solve part of the problem, old style temperature monitors and data loggers simply aren’t up to the challenge of providing the industry with the temperature and condition data that they need in the time frame and format they need, nor can they provide any form of an e-Pedigree. One gentleman I spoke with was quite passionate in describing his frustration with the limited formats and levels of information that he was getting from his existing data logger and his ability to easily work with and share the data. Once we informed him of the added abilities of the Intelleflex tags he was already working on new ways to confirm how the drugs were treated outside of his control when they wanted credits for returned cold chain products.

Our Peter Norton speaks with a fellow attendee at HDMA in Orlando

HDMA is a truly top-level conference with very high caliber attendees. A sense of panic isn’t the accurate description for what came across in my conversations but rather a sense of frustration and urgency. While it’s possible that e-Pedigree and serialization requirements may get deferred yet again, it’s also possible that a number of different laws will be enacted by different governing bodies and at the state level, which would create a huge headache for the industry. As such, there was strong interest in new solutions for wireless temperature monitoring (yes, attendees liked Intelleflex RFID temperature tags) but also for products and solutions for sharing and aggregating of data along the supply chain. Solving the e-Pedigree and serialization problem won’t be done in a silo but by cooperation among manufacturers, couriers and vendor partners who can deliver methods for capturing and securely sharing information along the supply chain.

Watch out for the alligators!

Kevin Payne

Senior Director of Marketing

RFID in the Pharmaceutical Industry

A recent issue of The PDA Letter (October 2011) featured an article titled “Evaluating the Use of RFID in the Pharmaceutical Industry”. The article was great about highlighting many of the benefits and issues associated with using RFID solutions, especially related to the reduction of counterfeiting and theft and improving supply chain security. Unfortunately, the article raised some concerns about the use of RFID in pharmaceuticals that no longer apply.  Let me explain.

Examining RFID in Pharmaceuticals

Prior to joining Intelleflex, I was in charge of the anti-counterfeiting serialization program at Genzyme.  I was a big believer (and frankly still am) of using 2D barcode technology for tracking individual units of pharmaceuticals. At the case- and pallet-level however, RFID is a much more effective solution than barcodes, especially now that there are good RFID tags for storing the information related to the inference data that also features chain of custody recording capabilities.

As indicated in the article, over the past couple of years, many advances have been made towards an industry-wide adoption of RFID but few of have yet to take advantage of the additional benefits next generation RFID Class 3 Battery Assisted Passive (BAP) tags that companies like Intelleflex manufacture.  These BAP tags offer many new features and capabilities towards improving the documented proof of efficacy at delivery, actionable data for in-transit monitoring and for serialization. These tags, with their built in memory and processor, are able to log and store condition data of the product from inside the package while providing secure access.  They’re also are FAA compliant, with a much longer free air read range than traditional passive RFID tags that provides the power to penetrate the packaging without opening or tampering.

The article raises unfounded concerns surrounding what, if any, impact RFID would have on biologics and their efficacy. As reported in The RFID Journal,  the University of Southern Florida recently conducted a study on the drug/biologics efficacy impact of RFID and came up with no evidence of any such impact.

Class 3  is definitely worth a look for your pharma supply chain applications.

Peter Norton

Senior Cold Chain Consultant – Intelleflex

Seismic Shifts and Cold Chain Processes

Dramatic shifts are taking place in the pharma cold chain.  Due to profit pressures, government regulations and economies of scale, there’s an increasing focus on outsourcing of cold chain logistics from manufacturers to third party logistics providers and couriers.  It makes a lot of sense in a lot of ways but, in the case of pharmaceuticals, transferring cold chain logistics to another party doesn’t necessarily also include transfer of responsibility to another party.

Ultimately, the manufacturer of a vaccine or medication will always share responsibility for ensuring the quality and efficacy of their products, even if control of shipping it is passed to a logistics provider.  How can the manufacturer ensure that the logistics provider has handled the product properly?  How can the logistics provider provide proof to the manufacturer that they’ve got their back covered?

Read this new article by Peter Norton

Industry consultant Peter Norton has authored two new articles that discuss this topic and shed some light on the answers:

Both of these, as well as other articles by Peter can be found on our website.  Please let us know what you think!

Kevin Payne

Senior Director of Marketing

PMA 2012: Closing Thoughts and Hats Off to PMA, Cisco and 2nd Harvest

The 2011 PMA Fresh Summit is now over and it was quite an event. We had a lot of people come by who were very interested in the recent case study that we recently concluded relating to blackberries being grown in Mexico and shipped into the USA. Growers and packers from all over the US, Canada and Latin America found the data fascinating and saw immediate applications to their own processes and how they can reduce waste and improve quality.

And, as mentioned in my last post, I learned something new again  today: Rubbage.  Rubbage turns produce into rubbish.  What’s rubbage?  It’s what produce experiences when it gets jostled about in containers as the truck hits bumps in the road.  This problem is apparently quite severe in less developed countries.  (Though anyone that’s driven California’s freeways of late would wonder if we quality as well.)  Take away is, in addition to temperature, people are also concerned about other sensor-based applications that work well with RFID relating to shock and vibration.

I also wanted to mention something very important that happens at PMA. As you can imagine, there are tens of thousands of pounds of produce on display for the show. When I ordered berries for our booth demo, I wondered what would become of them each day and found that PMA works with The Second Harvest Food Bank in Atlanta to collect and distribute the produce at the end of each day and (en masse) at the end of the show.  Who knows how many thousands of people will get fresh produce as a by-product of this event.  That’s great!  And, I also want to tip my hat to 80+ volunteers from Cisco Systems who showed up at the end of the show to collect the produce from around the convention center and package it all up to be delivered to people in need.  That’s really fantastic and speaks very highly of both the volunteers from Cisco and of Cisco itself for supporting such an effort.  So, thank you volunteers!

Hats off to the Cisco volunteers and Second Harvest Food Bank!

Kevin Payne
Senior Director of Marketing