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The Spoils of Raw

6/7/2012

Manufacturers must take steps to ensure product safety

Shortly after news broke of the melamine milk contamination in China, the UNC-Tsinghua Center for Logistics and Enterprise Development in Beijing hosted an international symposium on food and drug safety on the same day China’s new food safety law went into effect. While food products can become unfit for humans for many reasons, the symposium pointed to the importance of good supply chain infrastructure and management. China, like many emerging countries, does not have adequate cold chain capabilities to assure that food remains in controlled-temperature conditions at all points in its supply chain. Center co-director Noel Greis and faculty board member Ann Marucheck, both of UNC Kenan-Flagler, began working with their Tsinghua colleagues and industry partners to research cold-chain capability in China. Without an adequate cold chain, as much as 30 percent of food products spoil and become unsafe to eat before they reach the consumer.

Raw

A series of such high-profile product safety incidents in similar highly regulated industries prompted Marucheck and Greis to compile a global research team to study the problem. Their article “Product Safety and Security in the Global Supply Chain: Issues, Challenges and Research Opportunities,” published in the Journal of Operations Management in November 2011, examines the reasons for product failures in fi ve highly regulated industries: food, pharmaceuticals, medical devices, consumer products (particularly toys and electronics), and automotive.

“Traditional local solutions and existing regulations aren’t sufficient to assure the safety of products whose supply chains have become increasingly global, long and complex,” Marucheck said.

The drivers of product safety and security issues are quite different in each of the industries. Food safety must reduce the risk of contamination in the supply chain, particularly by improving cold-chain capability. Pharmaceuticals must combat counterfeiting and control the secondary distribution market. Medical devices must manage rapid innovation and technology. Consumer products and motor vehicles must integrate safety into the product design process.

Though no single solution will fi x the problem, traditional tools of supply chain management are more effective than relying on regulations and inspections. The Marucheck/Greis team recommends that manufacturers:

  • Work with policymakers to provide incentives for product safety.
  • Manage hazards in conjunction with life cycle analysis.
  • Use technologies, such as radio-frequency identification (RFID), for better traceability and recall management.
  • Better manage suppliers.

“There has been little harmonization of regulatory and industry standards across countries,” Marucheck said. “As manufacturing moves to emerging countries, compliance with safety standards may be difficult for small organizations with limited resources that will struggle with the costs of implementing safer methods of production.”

Ann Marucheck is the Crist W. Blackwell Distinguished Scholar and chair of operations, technology and innovation management at UNC Kenan-Flagler.

Noel Greis is co-director of the UNC-Tsinghua Center for Logistics and Enterprise Development and director of Center for Logistics and Digital Strategy at UNC Kenan-Flagler.

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