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Yet it could take global governance, stiff penalties/fines—and more—to truly deter medication counterfeiting.

Despite the Drug Supply Chain and Security Act, the efforts of Interpol’s Operation Pangea, and the efforts of pharmaceutical manufacturers, “the global counterfeit drug trade is a booming business,” says the Aug. 31 report, “Deadly fake Viagra: Online pharmacies suspected of selling counterfeit drugs.”

The article notes, “One of the main challenges of curbing the counterfeit trade is, ‘a lack of universal laws that criminalize counterfeit medicine,’” quoting John Clark, former Deputy Assistant Secretary for the U.S. Immigration and Customs Enforcement agency and now VP and Chief Security Officer, Pfizer Global Security. Clark tells CNN, “Right now it is handled differently country by country. There needs to be global governance on this issue.”

Pfizer’s website addresses several factors leading to increased counterfeit medicines: “Included among them are the growing involvement in the medicine supply chain of under-regulated wholesalers and repackagers, the proliferation of Internet pharmacies, advancements in technology that make it easier for criminals to make counterfeit medicines, the increased importation of medicines from Canada and other countries, and the relatively small risk and penalty faced by counterfeiters.”

The site notes that in 2013, “authorities from 49 countries seized more than 11.8 million tablets, capsules, and vials of counterfeit Pfizer medicines. Many of the raids resulted from leads developed by Pfizer Global Security.”

Pfizer provides web visitors with a comprehensive list of additional resources related to counterfeiting and importation.

FDA examples

A Sept. 1 look at the FDA’s website offered numerous examples of drug counterfeits, including the following two:

• Counterfeit version of Botox found in the U.S. (4-16-2015).

In this instance both the outer carton and the vial were counterfeit as the vial was missing the lot number, the outer carton did not have any entries next to the LOT:MFG: EXP:, and both the outer carton and vial incorrectly displayed the medication’s active ingredient.

• Counterfeit versions of Cialis tablets entering the U.S.

Here there were differences on the bottle label between the counterfeit product and Eli Lilly’s authentic product. The counterfeit version did not include an NDC number on the bottle front, tablet strength details, while it was printed in different patterns and colors, complete misspellings, even in the product’s name.

Criminals follow the money, and as more advanced medications with higher price tags reach the market, they appeal to counterfeiters, particularly since their effort reportedly carries modest risks and penalties.

Pfizer’s point about advancements in technology making it easier for counterfeiters is unnerving. That said, the battle on the front lines of serialization rages forward. And it’s not being fought solely by manufacturers, but throughout the supply chain.

Healthcare Packaging’s recent cover story detailed how Domino, its supplier partners, and its pharmaceutical manufacturer customers were addressing DSCSA/DQSA through interconnecting packaging equipment, materials, and components.

In an upcoming Healthcare Packaging story, you’ll read how a global pharmaceutical contract packager is investing millions of dollars in packaging equipment, software, and human resources for serialization efforts within its facilities and for lines to help its pharmaceutical/biopharmaceutical customers comply with federal serialization regulations.

Yes, the counterfeiting battle continues, and it sometimes appears to be a losing effort, but it’s reassuring to see how the packaging community is making progress in ensuring that patients receive legitimate medications, and making progress toward ultimately winning the war.

{First published on by  Jim Butschli, Editor, September 1, 2015}



When you think of an automated process, the words agile, flexible or nimble may not be the first words that typically come to mind. Most people think of automated processes as efficient, accurate, or repetitive – but not agile. You may even picture an automated process as one that cannot be stopped once it has been started ... sort of like a runaway train.

But done right, automation is really more like a smoothly orchestrated railway system – changing tracks, adjusting schedules, and delivering freight or people to the right location quickly and efficiently.

Increase your agility & responsiveness

Although you may begrudgingly acknowledge that certain automated processes are less expensive to operate, you may feel that this lower cost comes at the expense of flexibility and responsiveness. In the context of Supply Chain Management, while workflow automation can clearly be used to reduce operating costs, you might be surprised to find that an increase in agility is often the greatest result. 

This agility primarily comes from the ability of workflow automation to reduce your overall cycle times and thus increase your responsiveness to change.

Manufacturing supply chain challenges

If you are a manufacturing or distribution company, you face many challenges in your supply chain including:

  • inherent forecast uncertainty
  • shortened customer lead-times
  • inventory risks
  • the need for production capacity flexibility
  • maintaining product and service quality

You can meet all of these challenges more effectively if your supply chain processes have shorter overall cycle times and are thus more agile in responding to change.

More customization, better service, shorter lead times

Today's "empowered" consumers expect and demand more customization, better service and shortened lead times.  We want what we want now.  If your order-to-delivery cycle time does not meet your customers' expectations, then you will likely not get their business.

  • Make-to-stock companies typically have longer outbound supply chains with more finished goods inventory stocking locations, which increases the risk of higher inventory driven costs (i.e., obsolescence, damage, shrinkage, storage, cost of capital, etc.).
  • Make-to-order companies typically have shorter outbound supply chains with fewer finished goods inventory stocking locations, but they still have significant inventory risk upstream in their raw materials and sub-assemblies.


Shorter process cycle times allow you to carry less inventory and reduce your overall inventory levels and associated inventory risks.

Although you can improve forecast accuracy, forecasts are never going to be perfect, so you must be able to quickly adjust your supply chain strategy. In order to further reduce inventory risks, manufacturing companies are trying to build more to real-time actual orders (demand-pull based) rather than building to forecasts (push based). This shift requires your processes to have shorter cycle times and be very efficient. Any delay in accessing information from multiple systems of record, or having to rely on manual processes, is generally not practical.

Flexible workflow automation, flexible supply chain

Today's best workflow automation tools have the flexibility to be quickly configured with rules and alerts that you choose to match your desired process, so that you are not forced to live within a narrow process dictated by the tool. These rules and alerts can enable your people to only get involved in a process when an exception occurs that requires their attention, but can also keep them out of low-value-add transactional activities that can be completed extremely rapidly without their involvement.


{First published by David Riffel, Solution Consulting Director, TAKE Supply Chain; 8/26/2015on }

Economist Brian Beaulieu sees an improving economy over the next 24 months, with forward thinking companies expanding their capabilities. Is your supply chain ready for 2017?The upcoming Supply Chain Outlook Summit 2015 will feature 10 different speakers who have their fingers on the pulse of the most important changes impacting supply chain management over the next 2-3 years. At the event,Brian Beaulieu will present a keynote speech detailing the upcoming economic forecast for the supply chain. 

An economist with ITR Economics since 1982 and its CEO since 1987, Beaulieu has been providing workshops and economic analysis seminars in seven countries and to thousands of business owners and executives for the last 31 years. Over that period, Beaulieu has also consulted with companies that need a domestic and global perspective on how to forecast, plan, and increase their profits based on business cycle trend analysis.

In this Q&A with Supply Chain Outlook, Beaulieu discusses how supply chain managers need to prepare now for the projected economic growth – both domestically and in Europe – that’s in store for 2016, 2017, and beyond. 
SCO:  What main topic do you plan to cover in your keynote?

Beaulieu:  As an economist, I’m looking carefully right now at the positive economic growth trends that are coming in 2016 and 2017. We expect the domestic economy to do better across this 24-month period, which means companies should be thinking now about how to scale up for and accommodate this expansion.

SCO:  Why is this an important topic right now?

Beaulieu:  Companies need to have the right levels of qualified labor, working capital, and equipment to successfully manage their growth and be profitable. If they aren’t prepared in advance, they’re going to find that these key resources (labor, capital, and equipment) are in short supply. Labor is obviously already an issue across many sectors, and you can’t get new capital equipment at the drop of a hat. The companies that have to scramble to create capacity won’t be as profitable as those that prepare ahead.

SCO: What does this mean for supply chain managers?

Beaulieu:  Managing the supply chain means making sure you have enough materials and resources to produce at a profitable level. Going forward, supply chain managers will find that there are more throughput requests across every aspect of their supply chains. That will put added pressures on managers. For example, some will have to support growth at a time when they don’t have enough labor, or the wherewithal to handle the increase in business. They may be forced to deal with a host of challenges that will wind up draining their efficiencies and hurting their operations. 

SCO:  What else should attendees know about the potential impacts of your positive outlook?

Beaulieu:  It’s important to know that all aspects of a business are profit centers, so be ready for the increased workload that’s coming your way. The U.S. consumer is in great shape and will be increasing his and her spending levels in 2016. Con- currently, we see positive indicators for the European economy. That means that the two largest global economies will be engaged in a new, rising trend that’s going to make its first run in 2016. In addition, as Mexico continues to supplant Canada as a manufacturing source/partner, the country will be a crucial part of everyone’s business plan for 2016-18. Near-shoring is a growing reality, and Mexico is coming on very strong within that context.

Click on the link to register for Supply Chain Outlook Summit 2015. For more information, visit the website.


Farming union leaders have welcomed the UK farm ministers’ acknowledgement that the supply chain is not working and that urgent measures are required to address the immediate farming crisis.

At a meeting yesterday, there was recognition that this is not just a crisis in the dairy sector but is impacting most farmers across the board with the lamb sector also being particularly hard hit.

The meeting of the UK farm ministers, held at Defra’s office in London was also attended by the Presidents of the NFU, NFU Scotland, NFU Cymru and Ulster Farmers Union. A series of actions were agreed which retailers and the food service sector should commit to urgently.

These include; clearer country of origin labelling; clarity on sourcing policies; better, more consistent promotion of British food and, from the government, delivery of its public procurement food policy.

There was recognition that some of the issues facing farmers could only be tackled at EU level and there was agreement that the farm ministers would agree to present a united position representing all UK farmers at the emergency meeting in Brussels on 7th September.

The four UK farming union Presidents said: “We cannot allow the meltdown in the farming industry to continue. The Secretary of State and the devolved agricultural ministers have today acknowledged the threats facing the farming industry and the need for urgent action.

“Our farming members now expect to see these words followed up with visible, tangible actions. The ministers should be in no doubt that the time for talking is now over.

“Ahead of the emergency European farming summit in Brussels on 7 September all parties agreed today to work on, and agree, the UK demands that will be put in front of the European Agricultural ministers and the Commission.

“The UK farming union presidents once again stressed the importance of timely BPS payments and ministers all committed to do all they can to ensure this happens. These payments are going to be essential to the cash flow of many hard-pressed farms.

“In the immediate short term, we look to the retailers and food service companies to ensure they are treating their farming suppliers fairly. We believe they have a responsibility to ensure that there is a sustainable farming industry and they need to understand their vital role in this to guarantee their security of supply in the future.”

{First publish at 18 August 2015}

The retailer is holding goods longer at distribution centers, increasing flexibility and trying to meet e-commerce competition and the changing consumer expectations Wal-Mart Stores Inc. said inventory management was a bright spot in the second quarter that included disappointing profits, higher costs and other challenges in the last quarter.

Greg Foran, chief executive of Wal-Mart U.S., said on the company’s earnings call Tuesday that the company has been holding more of its inventory at distribution centers rather than in the backrooms of its stores, a strategic choice that gives the retailer more flexibility in meeting demand.

Wal-Mart reported that inventory grew 2.2% from a year earlier, slower than its sales, which grew 4.8%, or by $3.4 billion, in line with its goal of shedding excess inventory.

Supply chain experts say this is a necessary move as Wal-Mart increasingly embraces e-commerce and what the retail industry calls an “omnichannel” strategy, in which companies make the inventory across all their warehouses and stores available to all customers, both online and offline.

By keeping smaller amounts of a wider variety of goods at distribution centers, Wal-Mart can make products available to customers without having to stock the items in every store, said Kevin O’Marah, head of research for supply chain talent development firm SCM World. And if customers want an item in a distribution center, it can be shipped quickly and more efficiently than if a store employee were to ship it.

“It’s smart, it’s naturally an outgrowth of e-commerce…They can have less inventory systemwide, and still offer more variety,” Mr. O’Marah said. But the company faces a challenge in meeting expectations of customers who may be used to very different experiences online and in stores. While retailers can deliver goods to online customers from anywhere, shoppers at brick-and-mortar stores may be disappointed if goods aren't stocked at a store—and keeping all inventory on hand at every store can be expensive and inefficient.

Mr. Foran said on the call that keeping the inventory further upstream also has the added benefit of extra space in store backrooms, enabling employees to operate more efficiently. By also upgrading technology used by its managers and simplifying the process of deliveries and stocking shelves, the company can now “keep associates on the sales floor rather than in the stock room,” the executive said.

By overhauling inventory management, Wal-Mart has “allowed us to reduce [store] inventory while improving both in-stock levels and sales,” Mr. Foran said. “Inventory management will continue to be an ongoing focus for us.”

{First published Loretta Chao at [email protected]}

Every day brings a new report about a food product recall. With all of the progress in disease detection and recall management, hasn’t the food supply become safer? Is the increase in recalls a result of more aggressive government enforcement of food safety? Or has the media simply become more attuned to food safety issues and giving them more scrutiny?

The short answer is that the globalization has created gaps in safety in the food supply chain and as a result, recalls are increasing. Food production, warehousing, transportation and supply chain technology has all evolved to close these gaps. But it has taken the supply chain time to identify all of its vulnerabilities and to get up to speed on the tools being introduced.

The government, meanwhile, is addressing  food safety issues with more stringent regulations, in particular, those covered under the Food Safety Modernization Act (FSMA). And while the regulations in and of themselves will provide the supply chain an additional measure of safety, they remain in a state of uncertainty as the government has yet to finalize them.

While supply chain decision makers explore the various technologies that will enable improved safety practices, there are already some signs of progress. Confidence in the safety of the U.S. food supply has remained consistently high since 2008, according to the Washington, D.C.-based International Food Information Council. The organization’s 2014 consumer survey found that 67 percent of consumers have confidence in the U.S. food supply. (page 9 IFIC 2014 Food Tech Survey).

The survey also suggested that the majority of Americans also have a positive view of modern agriculture, with 74 percent agreeing it can be sustainable, 71 percent saying it produces nutrition and high-quality foods, and 70 percent saying it produces safe food.

A note of caution

Nonetheless, the findings do carry a note of caution. While the confidence level remains high, it has been starting to decline, however slightly. The percent of consumers who are not confident in the safety of food rose to 14 percent in 2014 following a 4-year low of 10 percent in 2013.

Increasing food recalls could be contributing to the decline in confidence. Highly visible recalls such as Blue Bell Ice Cream and Kraft Macaroni & Cheese have focused attention on listeria, salmonella and E.coli.

Rising recalls also increase the cost of food operations, a cost that gets passed along through the supply chain.

Swiss Reinsurance Company Ltd. (Swiss Re), a global reinsurance company based in Zurich, Switzerland, examined how the increasing number food recalls is impacting public health services, governments and companies. The report also examines how risk mitigation can protect food manufacturers operating in a highly globalized, often fragmented, supply chain.

The report found:

  • The number of recalls per year in the U.S. has almost doubled since 2002.
  • Food contamination costs U.S. health authorities $15.6 billion per year.
  • Half of all food recalls cost the affected companies more than $10 million.
  • A globalized food supply chain is making risk management for food recalls more difficult.

Adding to the complexity is that much of the food now consumed today is “ready to eat.” Ready-to-eat foods are the number one recalled food product category by a wide margin, as shown in figure 4. Ready-to-eat foods use more ingredients than other food. Hence, these foods require a larger supply chain which has more potential for unsafe food.

Ready-to-eat food, once processed, typically requires a third party such as a logistics provider to transport the food to distribution warehouses. In some cases, the logistics firm manages the warehouses while in other cases, another supply chain partner provides this service. Yet another entity can be involved in delivering the food from the warehouse to the store.

Maintaining the quality standards necessary to keep the often perishable product safe is a challenge, the report notes, even when the product only contains meat, vegetables or milk products. For a ready-to-eat meal, different foods come together in a complex system prone to errors. This explains why the ready-to-eat food category is leading by share of recalls.

The rise in the consumption of convenience food over the years has accentuated this trend.

Still other factors come into play. New food ingredients are continually coming to the market. Nanotechnology, nutraceuticals or functional food are also turning up in food products.

“In a more globalized economy, ensuring the highest level of food safety is becoming an ever greater challenge for firms,” says Jayne Plunkett, head of casualty reinsurance at Swiss Re. “Today, ingredients and technologies are sourced worldwide. This leads to greater complexity for food manufacturers and consumer and regulatory demands on companies are continually increasing.”

Demographic change creates vulnerabilities

Globally, the report found that demographic change is also exposing more sensitive consumer groups to the dangers of contaminated food. Ageing societies, an increase in allergies and malnourishment all increase the exposure to food safety risk.

“Food recalls can be caused by something as simple as a labelling error on the packaging, or as complex as a microbial contamination somewhere along a vast globalised supply chain,” says Roland Friedli, risk engineer at Swiss Re and co-author of the report. “Yet even a simple mistake can cost a food manufacturer millions in losses and even more in terms of reputation.”

The complexity of the food supply chain has unleashed a barrage of visibility and traceability tools that allow companies to prevent recalls and, when necessary, respond to them effectively.

Safety specialists play a key role

Increasingly, food companies are looking to third-party safety specialists to improve safety.

Checkers and Rally’s Restaurants Inc. upgraded its safety auditing this past year by outsourcing the task to Ecosure, a quality assurance solutions provider owned by St. Paul, Minn.-based Ecolab Inc., according to Joe Ventimiglia, operations services and systems manager at the Tampa, Fla.-based franchise company.

The Ecosure audits are more comprehensive than Checkers and Rally’s previous internal audits, Ventimiglia says. Ecosure’s safety audit includes 170 questions. The audit also manages compliance with the different local safety regulations the restaurants must meet.

“You have a new set of eyes,” Ventimiglia says. “Everything they’re seeing, they’re seeing for the first time. The biggest blessing has been the visibility. It allows us to protect the whole brand.”

Ecosure, for its part, upgraded its safety audit process by introducing a dashboard reporting tool from St. George, Utah-based Steton Technology Group. The Steton Internet portal allows Ecoserve clients to manage all the data collected via a single database—even if it’s from multiple locations worldwide.

“The system gets the audit data in the client’s hands a lot faster,” says Gary Smith, director of food safety systems at Des Moines, Ia.-based Eurofins USA, another audit service provider that has added the Steton portal for its clients. Eurofins has renamed Steton’s auditing technology “Eurofins Audit Portal,” or “EAP,” for short.

“EAP allows our clients to have one system to see all their food safety audit results,” says Smith. “The audit results can be used to better identify the root cause of their non-conformances, manage their corrective actions, and make business decisions off trended data.”

Voluntary food safety audits increase

The need to control safety in the supply chain has fueled the growth of voluntary food safety certification  systems such as SQF, BRC, IFS, FSSC and Global Gap. Industry experts have noted these voluntary standards, as well as those of the Global Food Safety Initiative (GFSI), will enable a food company to comply with most of the pending rules under the Food Safety Modernization Act (FSMA).

Retailers and manufacturers sometimes have their own safety certification standards for third-party warehouses. But increasingly, food retailers and manufacturers are embracing safety certification programs administered by third-party audit organizations.

Lineage Logistics, based in Colton, Calif., in 2012 began introducing SQF certification to its facilities. The SQF certification is more stringent than the Good Distribution Practices (GDP) certification the company was using for its facilities, says Jim Reynolds, director of food safety and compliance. Lineage contracts SAI Global for both GDP and SQF certification audits.

The SQF certification is a Global Food Safety Initiative (GFSI) approved protocol, Reynolds says. In 2007, eight of the nation’s largest food retailers began requiring food vendors to be GFSI certified.

By next February, 15 of Lineage Logistics’ 112 facilities will have SQF certification. Reynolds notes the importance of selecting a reliable auditing company. “The auditing companies themselves are coming under greater scrutiny,” he says.

Most of the technologies employed in complying with the audits have been available for some time, Reynolds says. These include temperature controllers on transportation vessels, temperature monitoring systems in storage rooms, and security cameras. “A lot of these technologies have existed—it’s a matter of employing them to a higher degree of rigor,” Reynolds says.

The technology that has improved the most has been remote temperature monitoring, he says. The technology can alert a supervisor in real time when a temperature is approaching a certain point. “We’re able to determine at any point during the transportation whether the temperature is elevated to an unsafe level based on what type of product is on there.”

Smith at Eurofins USA, says food safety certifications are growing 25 percent a year in the U.S. The U.S. is rapidly catching up to Europe, which has had a 15 -year head start in this area.

Food safety regulations are driving some of this certification activity, Smith notes. “There’s a feeling that if a company has a certification audit, the government may reduce the risk of that organization and therefore reduce inspection frequency,” he says.

The different certification programs, notably GFSI benchmarked standards, have their unique strengths. As a certification audit provider, Eurofins educates clients about the difference between the programs to help the customer decide which program best meets their needs. Certain programs may be more appropriate for companies based on their cultures, markets and industry.

Safety certifications specific to user groups

Food safety certification standards are specific to the key user groups: manufacturers, distributors and retailers, Smith says. For instance, the standards for manufacturers are not the same as for retailers, for instance.

For distribution centers, audits focus heavily on temperature reporting in cold storage areas. Added concentration areas include product rotation, protection from temperature abuse, employee hygiene and cleanliness during transportation. A distribution center audit will take one to two days depending on the size of the company.

Eurofins USA certifies food manufacturers and distribution centers. For direct retailers audits (restaurants, supermarkets, etc.), the company partners with Charlotte, N.C.-based Steritech Group Inc.

Cold chain players implement safety standards

Attendees at this year’s International Association of Refrigerated Warehouses (IARW)—World Food Logistics Organization (WFLO) convention and expo in Orlando, Fla. got a chance to hear from three cold chain service providers who have implemented safety standards.

Ken Johnson, senior vice president of MTC Logistics in Baltimore, Md., told the gathering that voluntary safety certification makes for a better company. The company uses BRC. He noted that BRC audits are more stringent than customer safety audits. He said the safety audit, which lasts a day and a half, cost the company between $3,500 and $5,500.

Supply chain providers are also finding better tools coming on the market for their internal safety testing.

RLS Logistics, a 3PL based in Mt. Laurel, N.J., has introduced a more efficient listeria testing product calledSample6, says Selina Hart, RLS quality assurance manager. The Sample6 testing is done onsite at the company’s Newfield, N.J. facility and eliminates the 5-day process of sending samples to an offsite laboratory. The Sample6 kit consist of a substance that gives a light indication within seven hours.

“It gives you a lot of information quickly and you’re able to react faster,” Hart says. “We have the ability to sample a lot more. It’s fun and it’s amazing.” The company has doubled the amount of tests with the new system.

RLS developed its own software that emails supervisors and technicians when to do listeria tests. The software system also creates a record of the results. The new system not only saves time, according to Hart; it reduces the chance for a contaminated product to go undetected into the supply chain.

Norpaco Gourmet Foods, a Middleton, Conn.-based manufacturer of Italian-style specialty foods for grocery stores and restaurants, has built a robust environmental testing program using Sample6. Shifting from the tedious work of managing multiple spreadsheets has been a time saver, says Tiffany Ptaszkiewicz, manager of safety and quality. “It’s just much quicker to do it in-house,” she says. “My technicians have really embraced it and we are looking forward to rolling it out beyond the quality team. It just makes sense for our business.”

The software automatically uploads the test results with other test results so all results can be viewed in one place.

With increasing globalization of the food supply chain, supply chain service providers must consider the full potential for lapses in safety controls. Stricter safety regulations are forcing these companies to pay closer attention to all possible vulnerabilities, a development that safety conscious supply chain service providers welcome.

At the same time, advances in safety technology are providing more tools to the industry to better safeguard the global food supply chain.


How To Control Trailer And Container Access In The Food Supply Chain

TrakLok International LLC, a firm specializing in trailer and container access control, became active in the food trade recently in response to food shipper requests, according to CEO Tom Mann.

The TrakLok device is an electromechanical system that provides an integrated access control, tracking and sensor/alarm platform. The system protects cargo integrity by monitoring lock and latch status changes, and providing enter/exit Geofence alerts. It notifies personnel by emails and text messages.

One of the advantages is that the system creates an electronic record. The driver uses a code to open a door. The system records who opened the door and how long the door was open. “The reporting side has become most important to these (food) customers,” Mann says. “It’s a brand protection issue.”

Food is a leading cargo for over the road burglary since it is easy to resell, he says. The rate of food theft is rising. “Cargo at rest is cargo at risk,” he says.

TrakLok recently upgraded its reporting function to support compliance with the reporting requirements for the Food Safety Modernization Act (FSMA). While electronic access control is common for facility security, trailer and container access control are traditionally mechanical only systems requiring manual recording and reporting of events.


Physical Safety Threats On The Rise

As terrorism increases, the global food supply chain faces a new set of risks.

TATE Global, based in Alexandra, Va., allows senior executives to make informed decisions about international  operations through analysis and assessment with its TATE Global Access offering. The company makes recommendations based on knowledge of local threats to infrastructure, the local business environment, and local government practices that could affect business.

The company offers three primary reports: “In Review,” “Market Evaluation and Entry,” and “Personnel Threat Assessment.”

TATE Global Access has been used by food industry clients, notes Peggy Lyons, company director.

A Mexican multinational organization began utilizing TATE Global Access customized reports to mitigate the risk associated with traveling in Mexico. The company’s trucks were traveling to facilities throughout the country 24/7 and experiencing problems with cargo theft, extortion and kidnappings. TATE Global provided reports that allowed the company to rework transportation routes and protect both the company’s personnel and infrastructure.

The report describes specific upcoming security threats by state, specifically focusing on highways and providing reliable details for planning and development. “For a food industry supply chain, this report comprehensively covers threats to employees, raw materials, cargo, facilities, as well as threats along the entire supply chain—from rural areas where food is produced, to food processing facilities, to shipping,” Lyons says concerning the Access: Mexico report. “The report also identifies areas and activities that could be affected by cartel violence, extortion, kidnapping, cargo theft, corrupt authorities, and violence between government forces and cartels that could affect the company’s business.”

A global agribusiness was concerned about its interests in China, where it sells product and purchases chemicals used in food production. TATE Global Access provided the company insight on potential threats to the supply chain via its strategic analysis report. Report details include partnership and labor issues, details on pollution and contamination, regulatory development insight, local, national and regional political dynamics, and potential maritime threats to the supply chain. The report allowed company leadership to better plan for current operations and investment in a new facility.




LONDON — Supply chains for two of Britain's largest defense programs have benefited in the last few days from a rush of production contract awards by industry primes BAE Systems, General Dynamics and Lockheed Martin.

By early August, with Parliament on its summer recess and people's minds here turning to the beach, it's normally a quiet time on the announcement front for defense.

The last few days were different, though. Fourteen contracts from across supply chains that include equipment from Austria, Germany and the US, as well as the UK, were announced for three British programs.

Supply contracts were awarded for the Type 26 frigate. (Photo: BAE Systems)

Supply contracts were awarded for the Type 26 frigate.

(Photo: BAE Systems)

The contracts illustrated the increasing globalization of defense supply chains and emphasized the continued willingness of the British to look overseas for equipment. It's something the British government hopes to see reciprocated more by its allies.


International supply chains, and Britain's role in them, were on British Procurement Minister Philip Dunne's mind when he visited Washington recently and talked up Britain's ability as an equipment supplier.

"We have been actively encouraging US and other non-UK domicile primes to come into the UK to explore our supply chain," he said in a speech July 28.

The relationship is the most fruitful with the US, but even here he said he found it curious the trade "often seems to go largely in one direction. Put simply, we buy a lot more from you than you buy from us," he said.

It's not all a one-way street, though. Lockheed Martin reckons it spends £1 billion (US $1.56 billion) a year with its UK supply chain, while Raytheon estimates it spends around £600 million — in both cases much of that is spent by the significant local operations both companies maintain here.

Outside of the US, Dunne pointed to naval shipbuilding as a sector where Britain could enhance its international equipment supplier credentials.

While he noted that many nations wanted to handle shipbuilding as a matter of national pride, "many of those nations don't have the design capacity to build everything which goes into them," he said.

Almost on cue, BAE naval ships business announced Aug. 5 seven contracts worth in excess of £170 million with suppliers from the UK and overseas for equipment to be installed on the first three of what it is hoped will be a 13-strong fleet of Type 26 anti-submarine warfare/general purpose frigates for the Royal Navy.

General Dynamics UK and Lockheed Martin UK also weighed in with four supply chain contracts worth a total of £290 million for the Scout Specialist Vehicle program. The program will provide the British Army with a new family of medium-weight tracked armored vehicles, with deliveries planned to begin in 2017.

The Ministry of Defence late last week also got into the act, awarding about £80 million of business to put a spring in the step of 12 of the 13 Type 23 frigates, with new diesel power generation systems manufactured by Rolls-Royce Power Systems in Germany and voltage converters from Hitzinger of Austria.

The Type 23s have been the backbone of the Royal Navy surface fleet for years and are undergoing upgrades to its systems and weapons.

On the Type 26, BAE signed production contracts with Babcock, David Brown Gear Systems, GE Power Conversion, Raytheon Anschuetz, Rolls-Royce Power Engineering, Rohde & Schwarz and WR Davis. BAE's combat systems unit will deliver an environmental system.

The contracts range from Rolls-Royce MT30 gas turbines to the integrated communications system from Rohde & Schwarz.Raytheon Anschuetz will deliver the integrated navigation and bridge system.

BAE is four months into a yearlong, £859 million demonstration phase contract awarded by the government to allow the shipbuilder to continue with detailed design and purchase of long-lead items. Negotiations over price and delivery for the first batch of warships have been extended.

Geoff Searle, BAE's Type 26 program director, said the contracts "reinforced the strong momentum behind the program and is an important step toward the start of manufacturing the Type 26 in Glasgow next year."

The company hopes to have about 47 contracts placed with 30 equipment suppliers by the end of the demonstration phase.

Roughly £600 million of the demonstration phase deal will be spent on equipment supply.

BAE is looking to sign a production contract for the first three ships of the class after completion of the demonstration phase at the end of March 2016.

Searle said BAE was still on track to cut the first steel for the Type 26 in late 2016, but that was contingent on a signing of the production contract.

Discussions over delivery of the first Type 26 continue, but 2021 or 2022 are likely dates allowing the Royal Navy to start pensioning off the first of its Type 23 fleet by 2023.

On the land systems front, a £3.5 billion production contract for 589 Scout SVs from the British government last September is now translating into deals with the supply chain.

General Dynamics is the overall platform prime, with Lockheed Martin the prime for turrets for 245 reconnaissance versions of the vehicle for the Army. First deliveries are due in 2017.

Thales UK, with vehicle sights and other systems, Rheinmetall with turret structures, and Meggitt's US operations supplying the ammunition-handling system for CTA International's unique 40mm cannon firing case telescoped rounds.

Perhaps most interesting at this stage of the program is a £17 million deal with British Formula One racing car company Williams to design and manufacture the vehicle's core infrastructure distribution system (CIDS) based on a General Dynamics design.

CIDS enables the distribution of power and data around the vehicles.

General Dynamics has been using its own CIDS design from pretty much the outset of the program, but brought in Williams Advanced Engineering to refine and repackage the system.

The work should make the system lighter and smaller, while improving its sophistication and data-processing ability, said a spokesman for Williams.

A spokesman for General Dynamics UK said the company brought in Williams because it has "cutting-edge expertise in Formula One-bred technologies and capabilities, including data analytics and systems integration."

Email: [email protected]


While politicians wrangle over the Greek debt crisis and economists speculate on the lasting impact to the European and global economy, a decision on who controls a container quay miles away from Athens could reshape European supply chains.

Although Cosco Pacific is expected to win the concession for a third container quay at the port of Piraeus, opinions differ on whether the terminal operator will be able to market share from Northern European ports by providing an alternative route into the European interior — long an unfulfilled goal for Mediterranean ports — or would merely provide additional competition for other Mediterranean ports. The winning of the concession would give a subsidiary of state-owned COSCO Group, complete control of one of the fastest-growing container ports in the world, raising concerns about competition at the busiest Greek container gateway.

The Greek government is expected in October to announce the winner of the concession after months of back-and-forth on whether to pursue further privatization, a key plank in Athens’ effort to refill its shrunken coffers, and signal to investors and the EU that its taking steps to improve its ailing economy. APM Terminals, part of Maersk Group, and Philippines-based International Container Terminal Services are also bidding for the 51 percent stake in the port.

If Cosco Pacific wins the concession, its sister liner company, Cosco Container Line and its CKYHE alliance partners — “K’ Line, Yang Ming, Hanjin Shipping and Evergreen Line — will would be expected to bring more cargo through the gateway, said August Braakman, a Rotterdam-based advocate who specializes in EU maritime competition law and secretary-general of the European Maritime Law Organization.The CKYHE alliance controls 23 percent of the Asia to North Europe market and 8 percent of the Asia-Mediterranean market. The alliance’s market shares will likely shift from the former to the latter if Cosco Pacific wins the concession.

A Cosco Pacific win would also advance Beijing’s effort to build so-called Maritime Silk Road trade corridors connecting the coast of China to Europe through the Indian Ocean on one route, and from China’s coast through the South Chinese Sea to the South Pacific in the other. Geopolitical strategies mean little to shippers in the short-term, but better access to the European hinterland, which Cosco Pacific says it can provide, does.

Piraeus, along with the port of Thessaloniki, could potentially gain more Asia imports headed into Eastern Europe, presenting a new competitive challenge to Hamburg, Rotterdam and Antwerp, ports that Braakman said for years have faced little competition from the Mediterranean. Although Thessaloniki is closer to containerized rail lines than Piraeus, the latter has been more aggressive in developing better intermodal links to the Eastern European hinterland.

Northern European ports’ “long-standing status as the primary gateways into and out of Europe can no longer be taken for granted,” wrote Frans-Paul van der Putten, author of the Clingendael Report, titled “Chinese Investment in the Port of Piraeus, Greece: The Relevance for the EU and the Netherlands.”

But others see Piraeus and indeed the entire Mediterranen port range as a limited threat to northern European ports because of poor and costly rail and truck transportation to landlocked countries such as Hungary, Slovakia and the Czech Republic, said Jurgen Sorgenfrei, director of consulting at IHS Maritime & Trade, the IHS business that is part of. There were similar expectations that Mediterranean ports Gioia Tauro, Italy; Algeciras, Spain; and Tanger-Med, Morocco, would grab market share from northern European ports, but that hasn’t happened, he said.

“Without a drastic change in supply chain management, there will be nearly no effect,” Sorgenfrei said in an email.

Piraeus, however, could snatch business away from other Mediterranean ports and function as a transshipment hub for the Black Sea area, he said. There is also the risk that through its monopoly Cosco Pacific will reduce competition in the regional Greek market.

To gain a greater foothold into the European container freight market, Piraeus and Thessaloniki will have to improve container rail services.

“Thessaloniki simply hasn’t taken advantage of (containerized rail), mainly because of the dominance of the government in the port’s management,” said Braakman.

Cosco Pacific has been widely credited for turning around Piraeus since winning the concession of two container quays in 2009. Piraeus Container Terminal, the wholly-owned subsidiary of COSCO Pacific in the last four years has spent $384 million to modernize the terminal and buy state-of-the-art quay and yard cranes, said commercial manager Tassos Vamvakidis.  Container volume through the two container quays run by Cosco Pacific rose 18.5 percent year-over-year to nearly 3 million TEUs, according to a company report. The traffic jump grew the company’s profit from the facility by nearly 26 percent last year to nearly $29 million. The government-controlled berth saw traffic fall 7.1 percent to 598,000 TEUs in the same period. 384,140,750

Cosco Pacific in November struck an agreement with the Piraeus Port Authority to spend $285 million to build a fourth container quay, which would boost the port’s capacity from 3.7 million 20-foot equivalent units to to 6.2 million TEUs by 2021.

Of the 48 Mediterranean container terminals, PCT was the sixth-most productive port in the Mediterranean, followed by the Piraeus Port Authority-run terminal, at 8th place, and the Thessaloniki Container Terminal, at 41st place, according to JOC-IHS Port Productivity Rankings. The rankings are based on seven elements — including berth arrival, berth departure and number of moves — provided by ocean carriers representing more than 75 percent of global capacity. In terms of Mediterranean container terminal productiviy, Terminal de Contenidors de Barcelona is top ranked, followed by APM Terminals Algeciras, in Spain, and Beirut Container Terminal, in Lebanon.

Cosco Pacific’s tenure hasn’t been without bumps, as the local dockworker union launched strikes in 2009 and has threatened more of the same as recently as May. The weakness of the Greek and broader European economy has also contributed to a slowdown in growth, with container traffic at Cosco Pacific’s two berths rising only 0.8 percent year-over-year in the first half of 2015. Volume growth at the top three northern European ports, Antwerp, Hamburg and Rotterdam, has been far stronger during the same period, rising 4.7 percent, 5.1 percent and 5.8 percent, respectively.

There is some evidence, though, that Piraeus has already gained some market share from its northern European competitors. Hewlett-Packard, one of the largest sellers of personal computers and printers, relocated distribution operations from Rotterdam to Piraeus and uses the services of state-owned rail company TrainOSE s to haul its goods from the port toward south, central and eastern Europe destinations. HP also uses Piraeus as a gateway for markets in Central Asia, North Africa and parts of the Middle East. ZTE and Huawei, both Chinese telecommunication companies, also gain shorter transit times by unloading goods in Piraeus and tapping block-trains, rather than at northern European ports, according to a report by Clingendael, Netherlands Institute of International Relations. Samsung, Dell,  Lenovo, IKEA and LG are also reportedly eying Piraeus, too, the report stated.

Of the roughly 3 million TEUs handled last year, 15 percent moved to the hinterland. Importers moving cargo out of Greece and into eastern and central Europe can tap 3 to 4 weekly block trains, Vamakikdis said in an email. Daily services to Sofia, Bulgaria, and Skopje, Macedonia, will begin soon.

Cosco Pacific competitors aim to blunt its efforts by winning the concessions at Thessaloniki, Greece’s second largest port, Braakman said. Eight companies, including APMT, Cosco Pacific and Hutchison Port Holdings, are competing for a majority stake in the port. Hutchison appears to be the leading contender, largely because it recently beat out Cosco Pacific for a tender for an 89-acre plot to build a container terminal, Braakman said.

Cosco Pacific’s winning of the Piraeus concession could trigger a European Union investigation into the role of the Greek government in subsidizing supporting rail and road infrastructure, Braakman said. Since the EU doesn’t have a common ports policy, ports must determine whether they run afoul of anti-competitive rules without any guidance from the European Commission.

“This is not an easy task, in particular since EU law provides for a specific regime for economic activities that are assigned to a private undertaking and therefore fall within the scope of the EU laws on state aid but are nonetheless in the public interest and therefore might be argued to fall outside that scope,” Braakman said.

Also hanging over Cosco Pacific if it takes control of the Piraeus port is a proposed EU law that would require members states to have at least two providers of port services, including terminal operation, for each port. U.K. ports, which are predominantly run by a single operator, blocked the EU Ports Services Directive twice, but the issue isn’t going away completely, said Chris Welsh, secretary-general of the Global Shippers’ Forum, the world’s largest group of ocean container shippers.

The successful privatization of the maritime nation’s most important port has been trumpeted as a sign of how Greece can liberalize its economy. If will be a strange irony if Cosco Pacific wins the concession and EU regulators poke into whether Athens gives too many favors to Cosco Pacific or the terminal operator is hurting competition. But then, that would be nothing as bizarre as the recent months have been for Greece and its creditors.

Contact Mark Szakonyi at [email protected] and follow him on Twitter: @szakonyi_joc.

{This article was first published by | Jul 29, 2015 2:45PM EDT}

The digital economy is changing the game for supply chain customers. Value chains are shifting rapidly, while technology advancements are disrupting old-style operations. Additionally, traditional value chains are also on the move. Hardware Original Equipment Manufacturers (OEMs) are moving to capitalize on software and services models. Original Design Manufacturers (ODMs) are moving into the OEM space. And there is considerable pressure on manufacturing services companies like Jabil Circuit JBL +1.06% Inc., Flextronics International Ltd. (now just Flex), and Foxconn Technology Co. Ltd. to deliver much greater value and full-service manufacturing solutions than ever before.


Today’s Customer Needs


Innovation, rapid response, and the increased need for actionable data have put immense pressure on the supply chain. Ever-increasing competition is putting pressure on margins, and advances in technology are forcing supply chain executives to focus their efforts on agility, reducing costs, and improving efficiencies. To accommodate each goal, companies invest significant man-hours and capital only to achieve marginal improvements.


Further, advances in the digital economy, Big Data, and The Internet of Things (IoT) have expedited the need for companies to detect supply chain changes, disruptions, and opportunities in real-time. Bringing end-to-end visibility into every aspect of the supply chain has become paramount, but evaluating and analyzing the massive amounts of structured and unstructured data can be a daunting task. Especially if the supply chain, including customers, business partners, suppliers, and employees are on disparate systems. When organizations interact with each other on a common network, they can enjoy the same increases in revenue-generating opportunities and decreases in cost structures across the supply chain.


Information Over Inventory


Advances in technology, especially IoT, are creating dramatic changes in supply, distribution, and logistics. Spurred by improvements in sensing, computing, and communications technologies, inventory-to-sales ratios for global business have fallen dramatically for several years. Customers want to invest in expertise, intelligence, and solutions that move at market speed, reduce inventories, mitigate risk, and manage and/or orchestrate third-party logistics and service providers more efficiently. Businesses are relying more and more on timely, contextually relevant data to achieve return on their investments. With the increase in diverse datapoints, systems are being developed to move beyond business intelligence to single sources of truth—or single instances of ERP—which provide a single console for all aspects of operational and enterprise systems. SAP SE (Business All-in-One), IFS AB (Applications), Microsoft MSFT +2.1% Corporation (Dynamics), and Oracle ORCL +1.3% Corporation (JD Edwards EnterpriseOne and E-Business Suite) are showing leadership in this space.

The Internet of Things (IoT) promises to fundamentally reshape supply chain management. Some estimates say in 2020 there will be over 200B connected devices collecting a myriad of both structured and unstructured data, while the amount of data collected doubles every two years. Where companies once suffered from ignorance about their customers, capabilities, and company, they can now have real-time intelligence. Where there was once opacity about supply and demand chains, there is now intelligence and transparency. IoT is allowing companies to gain visibility into all aspects of their businesses from customers, suppliers, distributors, manufacturers, employees, partners, etc. IoT is having a major impact, and the implications expand beyond the supply chain.


Former Chairman of the US Federal Reserve, Alan Greenspan, once said,


The remarkable surge in availability of more timely information…has enabled business management to remove large swaths of inventory safety stocks and worker redundancies. Information access in real-time…has fostered marked reduction in delivery lead times and the related work hours required for the production and delivery of all sorts of goods. Information technologies, by improving our real-time understanding of production processes and of the vagaries of consumer demand, are reducing the degree of uncertainty and, hence risk.


Sound decision-making and the accompanying risk reduction enable companies to invest more in their financial and operational capabilities to improve efficiencies.


Smart leaders have realized that Big Data and analytics have become table stakes for high performance supply chains. While companies collect more and more information from digital technologies, they need a way to make sense of the information and, more importantly, have the ability to make informed decisions.


Over the next few years, most companies will face transformational changes in all aspects of their business. As market changes are driving the need for businesses to be more agile and responsive to real-time consumer demands and customization, customers are clearly weighing their options for streamlining their supply chain. The rigid and inflexible strategies of the past have been played out and have little additional life left. It is important for customers to consider new information strategies and approaches that can help align and manage manufacturing resources with the new technologies of today. In the face of rapid changes and innovation in the marketplace, instant response, and immediate availability requirements, companies like Jabil Circuit are responding in kind to these trends and driving real value today.


This has been a partial excerpt of a much longer and in-depth research brief commissioned by Jabil Circuit. The full report includes actual survey data from over 300 individuals with responsibility for their company’s supply chain function. The full report can be downloaded here free of charge.

{This article first appeared on 7/29/15 and is writtten by Chris Wilder}

Manufacturers know they need to make their supply chains as lean and efficient as possible, but it can be hard to know where to start and what to prioritize. I had the opportunity to discuss supply chain optimization with Brooks Bentz, the president of Supply Chain Consulting Services at Transplace. He gave insight on best practices and obstacles to avoid, as well as how to measure supply chain success, how to combat tightening capacity and how to automate operations.

Bridget Bergin: What are some major obstacles to achieving an efficient supply chain?

Brooks Bentz: The major obstacles stem from trying to operate 21st century supply chains with last century’s operating practices. Change has been with us since the beginning of time, but what has radically shifted recently is the speed at which change is occurring. We’ve described this as a state of “permanent volatility.” Expectations are up, product life-cycles are down and supply chains are not facile and flexible enough to respond dynamically to rapidly changing markets. 

Leading-edge and bleeding-edge technologies are now available that can change the face of logistics and transform supply chains into the more dynamic and responsive functions that are required to meet customer expectations and improve the customer experience. This requires a different vision and mind-set and also requires the technological underpinnings to make it all work in a unified, holistic fashion. The bottom line is this: everyone needs better, more accurate information much faster to enable better management decision-making and superior execution.

Bergin: What are best practices for manufacturers to implement to combat these obstacles?

Bentz: The critical best practices to examine relate to how to best transform the logistics operations of the present into the supply chain of the future. This requires strategic vision, beginning with the end in mind. It also requires the capability to thoroughly and rigorously map the “as-is” processes and procedures of running the supply chain of today and the ability to translate that into a vision for, what I would call, the “to-be” model of the future and the roadmap to get there. 

When a manufactured product that has been in production to the point of choosing to re-engineer or let its life-cycle play out, the experts examine the product and the market it serves in order to determine what should be done. The “new and improved” model has to be envisioned, designed, engineered, prototyped, tested, evaluated and only then readied for production. Supply chain reengineering needs to follow a similar set of steps.

Bergin: How can manufacturers best measure supply chain performance?

Bentz: The key in developing an outcome-based approach is asking the question, “What are we trying to achieve?” Lower cost, higher speed, smaller inventory, better reliability, some or all of the above? It all comes back to designing the supply chain that best serves the corporate strategy, then identifying the key elements of that so that the metrics and KPIs can be established. Next, you need the data to drive the continuous monitoring and measuring of performance against those metrics and KPIs. This is where so many fail. They simply don’t have the ability to get performance data accurately enough or fast enough for it to be meaningful. 

If on-time performance is a key metric, but you can’t report on it until 30 days after the event, the impact becomes much less than if you can see results within minutes of a completed delivery. FedEx and UPS know almost instantly when a parcel is delivered to a residence or a business. On the other end of the scale, some don’t know until the delivery company sends signed paper delivery receipts back through the postal system to accounts payable.

Bergin: How can manufacturers best combat tightened shipload and truckload capacity?

Bentz: This is currently one of the hottest and most important questions faced by everyone who ships or receives product. The single, best, most powerful approach is to look at your business as a network of freight flows (inbound, outbound and inter-facility) and holistically reengineer capacity management across the entire network. This is done through what we refer to as “expressive competition” which leverages the power of the overlapping networks of buyer freight flows and service provider capacity.   

By optimizing overlapping networks of buyer freight flows and service provider capacity, the net result is a more stable network and a reduction in the inefficient use of capacity, empty miles for example. This takes cost out of the supply chain for both buyer and seller and links them more closely together in an interdependent way. It also reduces turnover and instability driven by constantly chasing other opportunities viewed as a more efficient use of the service provider’s assets.

Bergin: What are some effective ways of automating or digitizing supply chain operations?

Bentz: The “holy grail” in supply chain is true end-to-end supply chain management. This can only be done — at least for the present — by using a best-of-breed technology stack that provides the enabling software for relevant supply chain functions. This typically manifests itself in something referred to variously as a network services center, command center, control tower, logistics hub and other monikers. The central thesis is having a unified, integrated suite of enabling technologies that allow for complete end-to-end supply chain visibility, event management and execution.


{Article first appeared on Fri, 07/17/2015}

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