The next wave of supply chain innovation

By Bob Trebilcock, Executive Editor
January 18, 2011 - MMH Editorial

Venkat Rajaji has a theory. The next big push for technology in the supply chain could come about because of government regulation. “If you look back historically, a number of technology changes have been triggered by compliance to government regulation,” says Rajaji. “Think about Y2K. Think about Sarbannes Oxley.” 

Rajaji is global product manager for Infor’s (http://www.infor.com) product lifecycle management division. The government regulation he’s eyeing this time is the recently-passed Food Safety Modernization Act.

The bill aims to make food safer by giving the Food and Drug Administration (FDA) increased power to inspect food processing facilities and force companies to recall tainted food. As Infor points out, the bill and any new government regulation, for that matter, has been met with its fair share of controversy, but a story in this morning’s Wall Street Journal about another product recall from Johnson & Johnson related to quality issues from improperly cleaned machinery at a plant making Rolaids underscores the point.

In a press release, Rajaji argued that technology solutions can aid food manufacturers by helping companies better manage their internal processes and, where possible, implement solutions to prevent future outbreaks. “Savvy companies throughout the United States have already implemented technology solutions that provide better visibility into their operating processes and address manufacturing problems before they happen,” he said. “However, with this new regulation in place, more companies will likely invest in technology solutions to compliment their processes to ensure quality and prevent the lofty expense of food recalls.”

What does Rajaji have in mind? The bill, he told me, puts more responsibility and liability onto the shoulders of food manufacturers and processors. In the past, the FDA provided standards and guidelines, but the food industry largely policed itself as a matter of practice. Recalls were a negotiated process between the FDA and a manufacturer when the manufacturer self-volunteered that there was a problem. “Now, the FDA has police power,” he said. “They can issue a recall.”

The implication is this: In the past, a food manufacturer’s reputation was at stake. Now, they may be breaking the law. As a result, Rajaji said, “food safety will have to be part of your DNA from top to bottom. You will need to design your processes and systems for food safety.”

Everything from the R&D process to buying from the right vendors to how a company maintains its machinery may have an impact on food safety. If you doubt that, look no further than the latest J&J recall, which was blamed on product that was contaminated by improperly cleaned equipment.

To comply with the law, to minimize the impact of a recall and to provide transparency to distributors and retailers, Rajaji believes the food industry will increasingly turn to supply chain software and technology tools, like RFID and sensors that can monitor temperature to insure that food products were stored at an optimal temperature.

“You will need to make sure that you’re accountable and that every touch point across the supply chain is safe until it gets on the shelf,” he said. “To do that, you need tools to help you manage and capture data at every point. The legislation is going to drive the need for technology adoption to stay in compliance with the food safety legislation.”



About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When it comes to Congress actually getting its act together on a new long-term federal transportation bill, things remain as status quo as it gets, with the big takeaway being nothing really ever gets done, when it comes to passing a badly overdue and needed bill, rather than these band-aid extensions Congress keeps signing off on.

Truckload and intermodal pricing was up on an annual basis, according to the December edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

While the official numbers won’t be issued until early February in its quarterly Market Trends & Statistics report, preliminary data for the fourth quarter and full-year 2014 intermodal output from the Intermodal Association of North America (IANA) indicates that annual growth was intact.

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

About the Author

Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484 or email [email protected].

Comments

Post a comment
Commenting is not available in this channel entry.