Supply chain breakdowns are making us sick.
This year, Material Handling Management is celebrating its 65th year as the voice of the material handling and logistics industry. We’ve been helping companies learn how to get the right amount of product to the right place at the right time since the end of World War II. Radio frequency identification (RFID) has been around even longer, having been used by the Allies during WWII to track aircraft. Fifty years ago, the concept of supply chain management emerged from pioneering research conducted at MIT, and the advent of personal computers in the 1980s made it possible for companies to tie together all of their manufacturing, scheduling and warehousing transactions into the same database.
And yet, here we are, in the year 2010, and I wonder if we’ve really come very far when I see news items like these:
ITEM: Earning a distinction as the recipient of MHM’s “Worst Supply Chain of the Year” Award for 2009 is Peanut Corp. of America (PCA). Every revelation about this company’s operations was an embarrassment, but perhaps the worst allegation was that PCA continued to ship products even after they tested positive for salmonella. The salmonella outbreak resulted in more than 700 illnesses, some of them fatal. Apparently, the U.S. Food & Drug Administration (FDA) knew something was amiss at PCA for at least a decade but chose to look the other way until the outbreak occurred.
ITEM: National Steak and Poultry recalls nearly 250,000 pounds of steak meat that had been distributed to a number of national restaurant chains. The voluntary recall was prompted by an outbreak of E. coli in 16 states.
ITEM: Advance Food Co. recalls 110,000 pounds of frozen beef steak fritter products due to foreign materials found in the meat.
ITEM: Toyota recalls more than 4 million automobiles to replace faulty gas pedals that are suspected as a cause of more than a dozen fatalities.
ITEM: Pharmaceutical company McNeil Consumer Healthcare recalls entire lots of various Benadryl, Motrin, Rolaids and Tylenol caplets after numerous complaints of musty odors that, in some cases, led to nausea. The root problem appears to be the wood pallets that the packaged products were shipped on; however, the FDA has discovered that McNeil (a division of Johnson & Johnson) did not properly investigate the source of the odor. While McNeil determined that the caplets were not contaminated by microorganisms, the company did not look into problems in the packaging of the product. Apparently, McNeil knew about the problems as far back as 2008. It’s only January, but already McNeil is the early favorite for the “Worst Supply Chain of 2010” Award.
Car seat carriers, window blinds, hazelnuts, cribs, children’s jewelry, pistachios...the list of recalled products just keeps going on and on. Basically, what we’ve got here is a systemic mess, a breakdown throughout the extended enterprise where one hand doesn’t know what the other hand is doing—manufacturing isn’t communicating with packaging, packaging isn’t communicating with distribution, suppliers aren’t communicating with customers, and all too often, the end consumer is the one who ends up in harm’s way.
For McNeil to suggest, for instance, that the root of the problem was the pallets and not, in fact, their proclivity to look the other way despite scores of complaints about mustysmelling products strikes me as disingenuous. In a recent report filed by the FDA, McNeil’s facility in Puerto Rico is cited for numerous quality issues and hundreds of complaints of various natures. The FDA notes a pattern inherent in the company’s quality unit to consider all complaints as “isolated incidents of unknown origin.”
We can have RFID embedded in pallets, we can have warehouse management systems that can tell us where every case is stored throughout a vast distribution center, we can have packaging systems that absolutely guarantee that ingestibles are never contaminated by microorganisms, but unless there are responsible human beings keeping a watchful eye over the whole process, then the result is predictable: supply chain disruptions. And that’s enough to make all of us sick to our stomachs.