Few consumers give much thought to the supply chains of produce items in their grocery stores. The words "home-grown" and "produce" are practically synonymous and almost always appear together.
But a U.S. government recall of ginger in July reminded us that these assumptions are often faulty. This event, following on the heels of other Chinese-made product
recalls in the U.S. highlights the ever-growing need for better information about the supply chain for every type of product.
The Wall Street Journal recently published a front-page
piece on the ginger recall. When California state inspectors tested ginger sold by a major U.S. supermarket chain and discovered that it contained a dangerous pesticide that is not approved for use on ginger in the United States, their investigation quickly led them to China, prompting a major recall of China-grown ginger. Follow-on news reports revealed that close to 80% of raw ginger imported into the U.S. comes from China. That's ginger that ends up not just in the produce aisles of local markets, but the dishes at Chinese restaurants, ginger-flavored canned soups and seasoning in frozen dinners, to name a few. Not exactly home-grown produce.
Aside from the revelation that
fruit and vegetables (and juices) sold in U.S. stores (and not only
ginger) might not be all that "home-grown," was the realization that identifying and monitoring a multi-tiered supply chain that originates halfway around the world is a herculean task given the few current human and IT resources most import-dependent companies have at their disposal and the dearth of reputable sources of information available to help them. After all, this shouldn't solely be viewed as a story about Chinese product quality and environmental and health standards. American companies have created similar health and safety concerns among consumers at one point or
another. It's one reason why the
Superfund Program exists in the U.S.
In the case of the tainted ginger, there were at least six steps in the supply chain - including points in China and the U.S. - before the root made it onto someone's dinner plate. Six steps might not seem all that bad given the complexity and depth of supply chains for manufactured goods such as electronics components and automotive parts. (By the way, with the weakened US dollar, supply-chain complexity is should now be an issue for China-based buyers, too, as the Chinese increasingly become net importers of US-made products).
So, what's a purchasing manager to do? Whether you're importing toys, pet food, car
tires or produce from "low-cost countries," simply hoping for better government enforcement of import-quality regulations won't solve the problem. In the US, government agencies lack the manpower to monitor all shipments of products entering US ports, let alone conduct adequate sampling of the broad range of shipments arriving daily from countries such as China. Even China's quality-control agency, the General Administration of Quality Supervision, has "only"
30,000 inspectors located primarily at the country's ports, border crossings and airports. Consider as a point of reference that nearly all of the 25 million suppliers registered on Alibaba.com are based in China. That's a lot of ground for Chinese government inspectors to cover!
Where does that leave us? There's no catch-all solution for preventing another ginger,
toothpaste or vehicle tire recall. But for corporate buyers concerned about protecting their customers and companies from harm and liability, respectively, the most valuable commodity these days in the world of supply-chain management is information or "intelligence" about their supply chains:
- Intelligence about their suppliers and, in turn, intelligence about their suppliers' suppliers since there's no way to know how far down the supply chain a problem might take root.
- Intelligence about their current suppliers and intelligence about potential new suppliers because a buyer can't be certain that a supplier he or she has relied on for years might not suffer a lapse in control or a catastrophic event or that an alternative source of supply might prove more capable in meeting the buyer's quality and delivery standards.
- Intelligence gathered from internal sources as well as external sources because the most capable factory auditor might just happened to have visited a supplier's factory or farm on a "good" day and missed some early warning signs that another employee (or even another customer) might have observed.
- Intelligence as basic as where the supplier is located so buyers can assess the relative challenges of and risks associated with getting raw materials to the supplier and finished product from the supplier to points of distribution and on to end consumers.
Until now, putting “eyes and ears” on the ground at suppliers and gathering and sharing supply-chain intelligence has been an arduous task, something that only the
largest of companies could afford to do themselves.
Now
SupplyScope is making supply chain intelligence-gathering and sharing affordable. Make that free. SupplyScope offers a virtual supply-chain market intelligence service. Leveraging businesses' increasing adoption of broadband internet in developed and developing economies, attributes of "social networking," suppliers' desires to differentiate themselves in light of the many recent supply chain fiascoes and a desire among buyers to move beyond traditional secondary sources of information about suppliers.
For a purchasing manager using SupplyScope, you'll soon have the tools and information to find out about possible areas of concern in your supply chain well before they land on a customer's dinner plate--and in plenty of time to take action and head off unwanted publicity about your products.
Buyers and suppliers, go ahead and register now. It's free! Pass the ginger.
