Over these past months, I have provided numerous commentaries related to incidents of food contamination resulting in human safety and massive product recall.  The latest incidents involving salmonella contamination of peanut butter and peanut-related products distributed to institutions and numerous other food-related supply chains will be long cited as a wake-up call to today’s overall vulnerability of contamination anywhere along the supply chain, and the obvious lack of adequate controls that exist today.

A recent announcement from the Grocery Manufacturers Association (GMA) should therefore capture your attention.  GMA is an industry association representing more than 200 companies that manufacture and market branded and private label consumer goods.  Member companies include names like Birds Eye Foods, Campbell Soup, Coca Cola, Colgate Palmolive, Con-Agra Foods, General Foods, Kraft Foods, and Unilever among others. This is known in trade circles as a very influential industry organization.

GMA has publicly stated that “food safety is the industry’s most important priority, and supports proposals requiring all food companies to have a comprehensive food safety plan in place“.  In an opinion article published in the Atlanta Journal-Constitution, GMA President and CEO Pam Bailey calls on the U.S. Congress and the Obama administration to increase the FDA food budget to at least $900 million, allowing the FDA to hire more qualified staff and inspectors, invest in advanced technologies, and expand monitoring programs. Ms. Burton writes:  “Congress should: require every food company to have a food safety plan available for FDA confirmation; require that food importers police their foreign suppliers and make a foreign supplier food safety plan available to FDA; focus inspections on facilities and foods that pose the greatest risk of contamination that could result in food-borne illness or injury; give FDA the power to establish federal safety standards for certain fruits and vegetables – when risk and science demonstrate that standards are needed; and give FDA the authority to order a mandatory recall when a company has refused to conduct a voluntary recall and there is a serious risk to public health“.

And while this public call comes from the consumer goods industry, the FDA and the pharmaceutical industry previously called for the Secure Supply Chain initiative that would voluntarily enlist 100 drug makers that would help demonstrate the feasibility of guaranteeing the safety of foreign-produced drugs and active ingredients.  As was noted in a posting in January, I was not totally convinced that a complete turn towards industry self-regulation was going to in itself provide a secure supply chain.  While it was a step in the right direction.  I leaned more toward higher regulation until the industry can prove it is ready and equipped for responsive self-regulation.

I absolutely applaud GMA for this action, and you should as well.  It would now appear that the GMA has embraced the notion of both higher self-policing as well as increased FDA oversight and inspection.

It’s now time for the pharmaceutical industry to also actively support these measures with the same pubic and in-house commitment, and for the U.S. Congress to fund oversight needs.

Enough is enough in terms of the safety of food and drug-related supply chains.

Agree or disagree?

 Bob Ferrari

Accenture released results of a research study focused on sustainability and supply chain strategy. This survey concludes that leading-edge companies recognize not only recognize the business imperative of incorporating sustainability activities in both product and supply chain  practices, but make extra strides in linking the objectives of sustainability with cost effectiveness, customer service, and other objectives. The emphasis of the designated leading-edge companies is focused on pragmatic strategies vs. those that are unproven or bring higher risk.

This survey polled 245 cross-industry logistics, warehousing and transportation executives to identify the fulfillment capabilities that were most highly correlated with superior performance in both customer service and cost responsiveness.  A number of questions surveyed supply chain sustainability and carbon footprint management. This study segmented the companies surveyed into three categories: masters, average performers and laggards.  Masters were those organizations who achieved top-quartile performance on both cost effectiveness and customer service.

 The study conclusions indicate that masters are:

• Designing products with sustainability in mind
• Actively managing their supply chain carbon footprint
• Choosing processes and systems that offer the best return
• Benefitting from an integrated view of sustainability across the supply chain

Masters are also twice as likely to model and actively manage their carbon footprint across all areas of their businesses. In addition to overall reduction in energy consumption, other pragmatic mitigation strategies cited by masters include introduction of energy-efficient lighting, material recycling, and proactive preventative maintenance. 

Yet, this Accenture survey reveals that among the overall surveyed population, 37 percent of supply chain executives have no awareness of the level of supply chain emissions in their supply chain network, and only one in ten companies actively manage their supply chain carbon footprint.  Obviously, there is a need for progress.

In a Supply Chain Matters posting in April of last year, I noted that green supply chain strategy makes sense from an overall business perspective, but data indicated that the vast majority of companies were in early stages of strategy development. European based companies had more momentum because of the financial and legislative environmental policies directed at carbon and waste reduction. This latest Accenture study seems to reinforce these observations.

Implementing an end-to-end green supply chain is an immensely complex problem and will require multi-year initiatives as well as technology-enabled analytical analysis and tracking tools. But that is no excuse to not to get started. The Obama administration is now strongly hinting that the U.S. needs to adopt stronger sustainability policies, including a potential carbon cap and trade policy similar to other countries.

Leading-edge companies are establishing their sustainability strategies, and are making progress with integrated and complimentary pragmatic approaches, even in the midst of severe economic recession.  If as Accenture indicates, only one in ten companies actually take the time to  measure their supply chain carbon footprint, than that would imply that that should be a first step in your own company’s supply chain sustainability strategy.

Do you agree? What about your company’s strategies in this area?

 Bob Ferrari