The e-coli crisis in Germany earlier this year quickly triggered the media’s fear about the dangers of global supply chains. We are often told that large scale production and fast over-night supply chains are unsustainable, kill off local production and increase risk. And with over 2,400 people left infected by the outbreak, the fear was that the global situation was spiralling out of control. It seemed even The Archers were not immune to the crisis, with the writers introducing a storyline based on an e-coli outbreak on Bridge Farm!
At first the source was believed to have been Spain before the attention eventually turned to a bean sprout farm in North Germany. These insights came too late for Spanish vegetable growers though, whose sales dropped catastrophically overnight with huge volumes of fresh produce going to waste.
Of course you can’t blame the consumer. You’re not going to buy a product you think might harm you. But while international supply chains may unwittingly help spread a dangerous product, the way in which information travels instantaneously across the world in the modern media, and the fast reaction time of the supply chain, are factors that can actually limit the damage.
Global supply chains are certainly not new; they are not even a product of the last century. They have been with us since the days of the East India Company in the seventeenth century. And whatever critics may say, global supply chains have supported consumers and given them a wider choice than local production can supply. And at lower prices.
There is simply nothing pre-ordained in the balance between global and local supply; there is, in the global system, a continuous rebalancing going on. Cost differentials change over time, vulnerability and risk are re-assessed, and what was outsourced one year may come back the next. For instance, high fuel prices and a weak pound are contributing to a strengthening of UK manufacturing. The tools of modern global logistics – the shipping, transport and distribution capacity and the IT Systems that keep them running – are resources that allow this constant rebalancing to occur at a higher pace than ever before.
But as supply chains become more and more global, traceability becomes such a major issue. We need to be able to trace the problem back to its source. This is where modern logistics tools and techniques will again provide some of the answers. The pharmaceutical industry has long had systems in place that provide a detailed trace of every part of a drug back through its supply chain and manufacturing stages. Earlier this year U.S. President Obama signed the Food Safety Modernization Act, requiring new levels of product traceability in the food processing industry.
While it is always difficult to harmonise regulations across borders and continents, we believe that the industry itself – producers, logistics operators and retailers – will inexorably move towards ever tighter control and traceability. It is the tools of the modern logistics business that will make global supply chains as responsive and safe as possible. Traceability equals visibility. safety and efficiency.