Global Logistics and Supply Chain Strategies - May 2008 - (Page 32)

that they will never have a recall,” Hobson says. “When a situation develops that requires Plan B, a well-established recall protocol and experience with mock recalls can make a huge difference.” This is a theme that the Supply Chain Risk Management Practice at Marsh Inc., New York, also preaches to its clients, says Alan Schoem, senior vice president of Marsh’s Global Product Risk Practice. “If a crisis erupts, everyone needs to know exactly who is responsible, what to do and how to do it so that product can be located and pulled back as expeditiously as possible.” A recall situation is “one time when you absolutely don’t want chaotic procedures. It is important that everything be handled in a controlled and systematic way,” agrees Dennis Reimer, owner of the Baltimore office of SEKO Worldwide, a global logistics services provider. “That means making sure that your team has all the right people, including people at your logistics partner; identifying IT resources that need to be brought to bear; defining the types and levels of data that need to be exchanged between parties; and making certain that everyone knows which operating procedures they are to follow,” he says. Most large companies do, in fact, have well-defined policies in place on what to do in the event of a recall, says Krish Mantripragada, global head of supply chain management and RFID solutions at SAP, Newton Square, Pa. “The challenge typically is being able to execute on that plan when something happens,” he says. This is especially true when companies are dealing with off-shore suppliers that may not be as sophisticated or have the necessary IT systems in place to automate key processes, he says. “Then you may have to rely on human intervention to be able to execute, which is always more difficult.” Executing a recall broadly includes four steps, Mantripragada says. The first is identifying the magnitude of the problem. This requires understanding the cause and then narrowing the scope of potentially affected products to as few as possible. The second step is locating the product in the supply chain, which requires knowing where those specific products were sent and whether they are in storage, on the shelf, or have already been purchased by a consumer. The third step is notifying customers and physically getting the affected products back. The fourth is properly disposing of affected product and taking care of required documentation, reporting and reimbursements. SAP has created recall templates for various industries designed to help companies with all these steps, he says. How Big is the Problem? Identifying the magnitude of the problem is crucial to containment and depends largely on good record-keeping. “When there is a problem, most of the time only 1 percent to 2 percent of product is affected, so having to bring back everything is a huge waste all around,” says Jon Rasmussen, director of consumer goods at Intermec, Everett, Wash. “Being able to identify just that small percentage of flawed products begins at the source, with identifying and tracking the raw goods or components,” he says. “If the problem stems from an ingredient, you have to be able to find everything that ingredient went into,” says Beth spreads and toppings. Federal food and drug regulations require that food companies like Berner be able to trace products within several hours, but “that is not good enough for our standards,” says Troy Grove, IT director. “We want to be able to identify all the ingredients that went into a product and where all of the suspect product is within one hour.” When dealing with ingestible products, the time factor is critical, he says, and “CDC has really helped us” meet this stringent time goal. Berner has never had a recall due to its products, but did experience a recall because of defective glass containers from a supplier. “We were able to go in and look at all the different types of product that used that container. We found all the locations and within the hour were able to let customers know what product we needed to quarantine,” says Troy. Time-stamping also is important when a product’s quality is impaired as a result of a manufacturing problem. “If you have the “When there is a problem, most of the time only 1 to 2 percent of product is affected, so bringing back everything is a huge waste.” — Jon Rasmussen of Intermec Berndt, director of product management and industry solutions, CDC Software, Atlanta. “Each lot of ingredients has to be traceable to specific products.” One way that this typically is done is by time-stamping and otherwise coding production or machine runs, which enables a company to keep track of which lots of an ingredient or which components went into the products manufactured on a specific line between specific times of a specific day. Berner Foods, Dakota, Ill., relies on the CDC Factory solution for its record-keeping. “CDC factory gives us real-time data that supervisors, managers, and even operators all can access, so if we need to go back and look at the time-stamp data, we can get that and pull it into reports very quickly,” says Gary Gold, vice president of quality. Berner is the industry’s leading private-label manufacturer of premium process cheese sauces, right controls in place, you can narrow down the time when a machine malfunction might have resulted in inferior products,” says Tom Kozenski, vice president of product strategy at RedPrairie, Waukesha, Wis. “If you know what inventory was made in a specific time frame, you know which products to go after. If the problem lasted for only a short period of time, having to call back everything that you made that day or that week is just tragic.” Based on its many years of work with major food and beverage clients, RedPrairie has built into its solutions inventory controls that include time stamps, lot controls and expiry dates based on shelf life, Kozenski says. “Because we have been doing that for decades with our food and beverage customers, we had the structure in our system to support these functions and have evolved a best-of-breed offering.” RedPrairie’s solution, 32 MAY 2008

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Global Logistics and Supply Chain Strategies - May 2008 Contents Editorial GL and SCS Exclusive Fast Forward Up Front Cover Story: 'Be Prepared Is Motto that All Companies Should Follow When It Comes to Recalls Here and There 1+1=One Opinion Can't Happen Here Industry Voices

Global Logistics and Supply Chain Strategies - May 2008

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