If you don’t control your supply chain, someone else will.
When it comes to seeing into your supply chain, you only have two choices: lead or be led. Consider, for instance, what’s happening in the food and healthcare industries. While landmark food safety legislation awaits a Senate vote, politicians push for stricter control over FDAregulated products from production to consumption.
John M. Taylor III, counselor to FDA Commissioner Dr. Margaret Hamburg, summarizes the government’s new focus: “We are moving from an approach that was once based on reacting to problems to one that proactively prevents such problems from ever occurring.”
You don’t have to read too deep between the lines to infer that the FDA wants better supply chain visibility. And, building the necessary traceability into every process requires automatic data collection, robust information technologies and standardized product information that different companies can access and use to control the supply chain.
Major corporations in the food and healthcare industries are not waiting for any sort of government mandate. They’re taking matters into their own hands by collaborating with their supply chain partners on data standards and working to synchronize disparate information systems.
Last fall, for example, 55 foodservice goliaths—including ConAgra, PepsiCo, General Mills and Kraft—joined forces to standardize and publicize company, item and product identification data in accordance with GS1, a consensus-based, nonprofit, international standards organization. All 55 companies have agreed to assign GS1 global trade item numbers (GTINs) to their products and make them available to trading partners by the third quarter of this year. By second quarter of 2011, they plan to publish more product and logistics data for their trading partners.
These companies will access that data through the GS1 Global Data Synchronization Network (GDSN), an open platform for real-time information exchange. The GDSN is sometimes referred to as “a single source of truth” for data collected along the supply chain. GS1 designed the data repository to automate data collection, synchronize product identification across organizational lines and enable traceability.
In healthcare, a group of 14 companies has been testing the GDSN since the fall of 2008. These companies have also agreed to compliance deadlines—Dec. 31, 2010, for standardized location identification and Dec. 31, 2012, for industry-wide use of GTINs for product identification.
Just last month, this group of early adopters, which includes manufacturers Baxter Healthcare, Georgia-Pacific and Kimberly-Clark as well as distributor Cardinal Health, released a summary of its efforts to exchange standardized product information in the real world.
According to the report, the GDSN paid off in more ways than one. Barbara L. Zenner, senior product manager for e-commerce and global supply chain strategic initiatives at Baxter, explains that, by streamlining processes, the GDSN project uncovers the potential for better order accuracy and profitability. “Accurate and globally synchronized product data is the key to enabling an efficient healthcare supply chain,” she says. “By adopting the GDSN, healthcare providers, suppliers, GPOs (group purchasing organizations) and distributors can spend less time on managing exceptions and more time on ensuring the safety of patients.”
Although highly regulated industries like food and healthcare have much to gain from this kind of strategic collaboration, any industry could potentially benefit. Consider the possibilities: better monitoring and control of assets like reusable transport packaging systems, improved inventory management and order accuracy, and less waste and cost in the supply chain.
With or without tighter government control, global supply chains and the data flows within them are changing, and collaboration is key to survival.
So, you can continue to operate in a vacuum, wait for a directive, or take matters into your own hands. The choice is yours.