DISCUSSION

What will it take to dramatically reduce risk in the retail supply chains?

January 23, 2019Written by Dave Wendland

Photo: Getty Images

Whether it’s romaine lettuce, breakfast cereals or prescription drugs, never before has there been such significant attention given to overcoming supply chain hiccups and providing oversight and transparency. Supply chain risk management aims at identifying areas of potential trouble and implementing appropriate actions to contain it. It’s defined as identification of risks across the supply chain through a coordinated approach among supply chain members to reduce vulnerability as a whole. While risk has always been present in the process of reconciling supply with demand, there are a number of factors that have emerged in the last decade, which might be considered to have increased the risk level. These include:

The globalization of supply chains
The trend of outsourcing
A focus on efficiency rather than effectiveness
Reduction of the supplier base
Volatility of demand
Lack of visibility and control procedures

A number of these factors were identified across the pharmaceutical supply chain, which led the Healthcare Distribution Alliance (HDA), National Association of Chain Drug Stores (NACDS), and National Community Pharmacist Association (NCPA), among other leading trade organizations, to form a unified front to bring issues of adulteration, product tampering, counterfeiting and risks associated with global sourcing to the forefront within the Food and Drug Administration and the U.S. Congress. Signed into law November 2013, the Drug Supply Chain Security Act (DSCSA) remains a global mandate, requiring any company wishing to sell a pharmaceutical product in the U.S. to facilitate product "traceability" by 2023. In theory, this means a consumer should be able to pick up a bottle at a pharmacy and see all the hands that touched it prior to the point of sale. In practice, however, the law demands that manufacturers, licensers, distributors and dispensers track, collect and share product data at each step of the supply chain. A daunting task to say the least. Track and trace systems, in my estimation, offer a more streamlined method to quickly address risks as they present themselves, including responding appropriately to unexpected disruptions and minimizing financial and operational impacts to businesses across the supply chain.

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