What's in YOUR supply chain, Baxter?

Well, we wouldn't exactly call it "scooping" a major newspaper, but we here at SupplyScope are basking a bit in the glory of having highlighted the complexities and lack of transparency in Baxter's supply chain for its popular blood thinner nearly a full week before The Wall Street Journal's Gordon Fairclough and Thomas Burton brought the issue of China supply-chain transparency to Page 1.

Fairclough, ever the intrepid overseas reporter for the Journal, tromped right into a backwater sub-tier supplier in Baxter's heparin supply chain in rural China, interviewed the owner, snapped a few photos and shot a video of the Yuan Intestine & Casing Factory pig intestine-processing operations. (You may want to view the photos and video on an empty stomach.) What we learn from this article should be enough to make us think hard not only about what's in the drugs we consume, but in the food we consume as well. Baxter denies that the "factory" shown in the pictures snapped by Fairclough is part of Baxter's supply-chain for heparin. Our question to Baxter's supply-chain management team is: "Can you be so sure?"

For those in the field of supply-chain management - no matter what type of finished goods our companies sell - the evidence that continues to emerge from the Baxter heparin fiasco should remind us that establishing an off-shore, distributed supply-chain in places like China requires more than relying on on-shore first-tier suppliers or selecting a known or supposedly reputable first-tier off-shore supplier. It requires constant monitoring of and current knowledge about what's going on in the lower links in the chain. And doing a good job at this requires that sourcing organizations have the tools and invest in the resources that can keep their companies stay out of trouble and avoid negative publicity.

Right now Robert Parkinson, Baxter's CEO, and his team continue to remain mute about the company's blood thinner supply-chain traceability woes (not exactly a wise PR move, guys). In the end, this supply-chain problem is going to cost Baxter a lot of money. It sure would have have cost a lot less in the end to invest in supply-chain mapping and supplier-reputation research services. This is going to be one expensive "lesson learned" for Baxter.