On Friday, New York based OnlineMediaDaily, the declared largest and most influential media, marketing and advertising online site on the net, reported that Waterloo Ontario based startup BufferBox will be acquired by Google primarily for its network of physical parcel pick-up station capabilities.  The media outlet quotes a Google spokesperson as indicating that the global information content and services provider, with this acquisition, wants to remove as much friction from the shopping experience as possible. BufferBox an early-stage startup and its web site notes that after launching a very successful pilot at the University of Waterloo, the start-up focused efforts on rolling out a network of pick-up stations across the Greater Toronto Area.  BufferBox founders also acknowledge the acquisition by Google on their web site.

In March of this year, Supply Chain Matters noted that Google was making plans to offer a variety of co-branded tablet computers directly to consumers via an online store concept similar to sites such as Amazon and Apple.  Similar to Google’s failed experiment with its branded Nexus One phone in 2010, the effort was directed at providing a direct consumer fulfillment model, and was speculated to include the ability to also up-sell various electronic content services. At the time, The Wall Street Journal quoted people familiar with this strategy as indicating that Google believes that the current model for selling tablets is broken, including the inability of wireless carriers to gain any market traction as a fulfillment channel.  Also reported was that the company is considering subsidizing the cost of future tablets in order to be able to compete on pricing with Amazon’s Kindle Fire. The WSJ article stressed however, that physical stores will still remain an important channel for Google.

Whether BufferBox is another component of this strategy, particularly in enabling same-day or a next-day delivery capability is certainly fuel for added speculation.  In any case, we thought the announcement was an interesting one and therefore share it with our Supply Chain Matters readers.

Bob Ferrari

If producers of pharmaceutical of food products had any doubts as to the new powers and extended reach of the U.S. Food and Drug Administration (FDA) under the 2011 extended food safety law, there was ample evidence demonstrated last week.

India based generics drug producer Ranbaxy Pharmaceuticals Inc. was forced to voluntarily halt production of the generic equivalent of the highly utilized cholesterol drug Lipitor while it continues to investigate how tiny glass particles were introduced in some production batches. According to various syndicated business and social media reports, the recall was due to “possible contamination with very small glass particles similar to the size of a grain of sand.” The suspension involves certain lots of the 10mg, 20mg and 40mg dosage strengths of atorvastatin tablets, according to the FDA. The FDA took the step of halting the production of foreign produced Ranbaxy generic atorvastatin from the extended powers granted in the 2011 law to halt imports of drugs from foreign based producers suspected for having a history of quality deficiencies that could injure or harm patients.

Ranbaxy has been operating under increased FDA scrutiny because of reported quality lapses involving multiple Ranbaxy facilities dating back to as far as 2006. In 2008, the FDA barred the drug maker from shipping over 30 different drugs produced at troubled factories in India and would not consider any new applications from Ranbaxy to sell drugs in the U.S. that were produced at these troubled factories without firm evidence of remediation and conformance to documented Good Manufacturing Principles.

According to a report published on the India based Daily News and Analysis site, generic Lipitor has been one of the biggest bets for Ranbaxy, bringing in $600 million from December-May 2012 when the company monetized its exclusivity opportunity in the US. Post the completion of the exclusivity period, the company managed to retain a share of 45-50% on the generic equivalent to Lipitor.  On Friday, the headline of the Ranbaxy recall permeated traditional broad based and social media, most likely adding further damage to the Ranbaxy brand image for U.S. consumers.

Also last week, contrary to the intentions of peanut products producer Sunland Inc., the FDA continued to halt operations of the largest organic peanut butter processor in the U.S. because of continued concerns for salmonella poisoning somewhere within the supply chain. The FDA had discovered elements of salmonella at a Sunland New Mexico processing plant after 41 people across 20 U.S. states were sickened by peanut butter manufactured by Sunland for hundreds of products offered under other brands, including the Trader Joe’s brand, as well as Target Stores Archer Farms brand, and the Costco Kirkland Natural Peanut Butter brand.  The original recall issued in late-September included peanut butter and other nut butter products produced in a separate building from where raw and roasted peanuts are processed. An extension of the recall was announced on October 12^th as a result of a joint investigation by Sunland and the FDA, and included both peanut butter and raw and roasted peanuts produced by Sunland.

The enhanced food safety law gave the FDA authority to suspend a company’s registration when food manufactured or held has a “reasonable probability” of causing serious health problems or death. Before the food safety law was enacted early last year, the FDA would have had to go to court to suspend a company’s registration.

In social media, the widely read Huffington Post commentary included the following paragraph:

“FDA officials found salmonella all over Sunland Inc.’s New Mexico processing plant after 41 people in 20 states, most of them children, were sickened by peanut butter manufactured at the plant in Portales and sold by Trader Joe’s grocery chain. The FDA suspended Sunland’s registration Monday, preventing the company from producing or distributing any food.”

Sunland had voluntarily closed its plant after the September outbreak and planned to reopen its peanut processing facility on Tuesday of last week, with hopes of selling peanut butter again by the end of the year. Media reports quote Sunland as indicating that the FDA suspension was a surprise to the company and Sunland officials had assumed they were allowed to resume operations. The company now has the right to a hearing and must prove to the agency that its facilities are clean enough to reopen.

Meanwhile, Sunland and organic peanut product brands are once again tainted by mass media reporting that continues to note concerns for salmonella.

The overall message is for pharmaceutical and food producers to internalize that the FDA has increased powers to now enforce food safety, and that the agency intends to exercise these powers throughout the supply chain.

Bob Ferrari