Accenture Academy Blog

Fair warning to everyone engaged in the food and drug industry, the U.S. Food and Drug Administration (FDA) is refocusing its efforts on traceability initiatives and pedigree. At a public forum in December 2009, Jerold Mande, deputy undersecretary for food safety, unequivocally stated:  “Outbreaks of food borne illness should be prevented; however, when they do occur, they must be identified quickly and stopped.”

Though supply chain operations rarely create food safety problems, supply chain managers play a key role after the fact. They must develop processes to shorten the time from outbreak detection to resolution and recovery. Similar capabilities are needed in pharmaceutical supply chains when counterfeit or contaminated product is discovered.

Just to be sure we’re on the same page; let’s define the two key concepts:

  • Traceability:  the ability to trace the history, application, or location of an entity by means of recorded identifications. When considering product, traceability can relate to the origin of materials and parts, the processing history, and the distribution and location of the product after delivery. (International Standards Organization)
  • Pedigree:  a statement of origin that identifies each prior sale, purchase, or trade of a drug, including the date of those transactions and the names and addresses of all parties to them. This can be accomplished by means of electronic documents, an “e-pedigree.” (FDA

Certainly, both capabilities are important from a regulatory compliance standpoint. Federal and state agencies are pushing hard to enact strong traceability requirements in food and drug supply chains. At a basic compliance level, this means “one up, one down” traceability where an organization must be able to quickly identify where product came from and where it went.

However, companies may miss a real opportunity to achieve value if compliance is their only focus. Instead, they should pursue whole chain traceability. This global view of the supply chain provides greater product flow visibility, control, and responsiveness. Potential benefits include:

  • Greater consumer confidence—the ability to promptly identify and efficiently recall potentially unsafe product bolsters consumer confidence in the food and drug industry.
  • Reduced impact of recalls—rich information (complete, accurate, and timely) provides the insights needed to identify and recall only the implicated product. This pinpoint accuracy avoids the need for costly and brand-damaging widespread recalls.
  • Process improvement—stronger origin to store shelf information feedback loops and greater trading partner collaboration will enhance product quality, condition, and delivery, as well as supply chain efficiency.
  • Retailer compliance—it’s only a matter of time before retailers require a certain level of traceability. Suppliers without such capabilities are risking relationships and sales, not to mention the loss of brand strength to competitors who are able to effectively trace product.

Although these benefits are compelling, there are costs and challenges involved in developing a robust traceability system. Can-Trace, the collaborative and open initiative focused on the development of traceability standards for all food products sold in Canada, has developed a set of decision support templates that can be used to conduct traceability cost-benefit analyses. They also have developed a traceability self-assessment tool to highlight a company’s current level of capability to trace a product throughout their supply chain.

Additional resources are available to companies seeking to improve their supply chain traceability and pedigree skills. Valuable resources include:

As you look through these documents, you’ll find that manual traceability systems can handle regulatory compliance aspects of traceability but have little ability to minimize the scope and duration of recalls, improve supply chain performance, or protect brand equity. These goals are best achieved through technology-based traceability systems. For more information on these electronic approaches, check out my next installment of the Supply Chain Academy SCM Blog.

 

Comments:
  1. A pathogen free supply chain - Article by gpisanic@mac.com
    By Gustavo Pisani Gustavo Pisani on Thursday, March 11, 2010 at 9:58 AM
    Very opportune call in terms of awareness on associated risks, not easily perceived or detected on the customer side. World supply chains are responsible for the mobilization of goods, services, data and living organisms. Whether they are transporting people, vegetables, livestock or lab species they will carry any pathogen not tackled by prophylaxis measures, acting as a vector spreading it along the life cycle. Awareness is deemed vital to block this sometimes unadverted infectious focus by specific containment actions.
  2. An Ever-Changing Landscape
    By Brian Gibson Brian Gibson on Tuesday, June 1, 2010 at 9:05 AM
    Gustavo - I agree that it will be very challenging to keep the food supply chain free of problems, particularly as it becomes more global. Key food industry participants need to think more about the end consumer when asked to participate in traceability and risk prevention initiatives. There has been so much backlash of late regarding the Produce Traceability Initiative that the organizations have backed off a bit on milestone completion dates. That may be good for the companies but what about the consumers? For more details on changes to the initiative, visit: http://www.producetraceability.org/press_contact/10-5-21.cfm