Technology is making it possible for more companies, even smaller ones, to compete globally. The benefits of global supply chain systems, such as increased market share and lower manufacturing costs, are obvious. But, these benefits bring with them the need to be educated on the issues facing companies doing business on a global scale. Companies must be prepared to communicate with buyers and suppliers in differing time zones and account for potential language barriers. Special care must be given to the supply chain regulations that govern each country in which you buy, sell or ship. Ignoring these factors can result in heavy fines, reductions in production and expensive legal fees. However, identifying the issues immediately, taking time to investigate relevant new laws, and searching out the latest supply chain technologies can save you time and money down the road.
Timing is Everything
If you’ve ever traveled to Asia or Africa, you understand the difficulties that can arise from trying to communicate with coworkers, clients, suppliers, and buyers back in the United States due to time zone differences. Trying to organize meetings, shipments and deliveries at a specific time when the contributing partners are in drastically different time zones requires foresight. Imagine your customer’s delivery was due at noon, but you can’t reach the partner necessary to rectify the situation because it’s midnight in their location.
These issues can be detrimental to a 3PL or any organization in the supply chain industry. In fact, they can put a company out of business completely. One solution to this problem is to have equipment and processes in place that anticipate and proactively address potential shipping and delivery issues early. If your company does not have the infrastructure in place to account for these situations, partner with a company that does.
Chain of Custody Matters
When it comes to law enforcement, the term “chain of custody” refers to the integrity of the paper trail of a piece of evidence. Chain of custody in the global supply chain industry is similar in that every product in inventory must be meticulously tracked from packaging throughout each phase of the product’s journey until it reaches its final destination. Information such as product size, weight, parts or ingredients, temperature, pressure, mode of transportation, and delivery must be visible and passed on to each member of the supply chain.
Proper chain of custody doesn’t stop when an item is delivered. It also includes noting the condition of the product at the time of delivery and recording any disruption of the supply chain along the way. According to the article, Chain of Custody: Source of Control in Global Supply Chains, “This documentation should be precise enough to also be validated by a court.”
If chain of custody is taken this seriously by courts, surely your company should invest the time to make sure you have current, industry compliant technology and capable partners in place to ensure a clean digital footprint. The benefits? Companies with the best chain of custody procedures can expect that “increased transparency along the physical supply chain enables organizations to improve financial supply chain operations and reduce inventory levels and working capital.”
Drug Supply Chain Security
Another problem related to the chain of custody is the issue of counterfeit medications finding their way onto shipments. The threat is real, it’s serious, and even the largest pharmaceutical companies are not immune. A multi-million-dollar international counterfeit drug ring targeted Pfizer, the maker of Viagra, Lipitor, Zoloft, and Celebrex. The U.S. Attorney’s Office indicted 18 people for attempting to sneak counterfeit Viagra among other items onto shipments. Pfizer now makes use of radio frequency identification (RFID) tags to monitor medicines most likely to catch the attention of counterfeiters.
The FDA’s response to the pharmaceutical counterfeit epidemic is the Drug Supply Chain Security Act (DSCSA) of 2013. This act puts forth an exhaustive list of precautions pharmaceutical supply chain members must exercise to create “an electronic, interoperable system to identify and trace certain specific drugs as they are distributed in the United States.”
DSCSA is rolling out in phases, but it already requires participation by all supply chain members including manufacturers, re-packagers, wholesale distributors, and dispensers. If your 3PL or global supply chain team is not DSCSA compliant yet, now is the time to get your house in order.
Smart Container Data
Smart containers are just that…smart. They are essentially sensor-equipped, sometimes temperature-controlled containers, that allow global supply chain systems to electronically verify the contents of all their containers. The containers include data that can be sent via radio frequency or satellite to those in the supply chain system, customs or border protection personnel. Their unique identification numbers make it possible to track the cargo in route. The fact that smart containers provide these protections without human intervention makes them a sound investment instead of a risky expense. Smart containers provide much more than the ability to track shipments and present automated delivery receipts. The data can provide a chain of custody legal defense against claims of product loss, damage or cargo tampering because of the plethora of data stored in the containers.
Supply chain management has grown from a shore to shore industry to a global one. This isn’t news. Still, not every supply chain or logistics company has the systems in place to compete on a global scale. This means having a clear understanding of best practices when it comes to managing time zones, using smart containers and employing proper chain of custody protocols. Reach out to us at JIT Services for supply chain consulting for the global supply chain management arena. We can help your company implement the processes you need to not just survive but actually thrive in 2019 and for years to come.