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Monday, July 11, 2011

The Next Wave of Supply Chain Innovation

We have seen in several sources (Modern Materials Handling Blog, Logistics Management, and Venkat Rajaji's (global product manager for Infor) theory of the next big push for technology in the supply chain will probably come about because of government regulation. He is watching the recently passed Food Safety Modernization Act. This bill aims to make food safer by giving the Food and Drug Administration (FDA) increased power to inspect food processing facilities and force companies to recall tainted food. As Infor points out, the bill and any new government regulation, for that matter, has been met with its fair share of controversy.

In a press release, Rajaji argued that technology solutions can aid food manufacturers by helping companies better manage their internal processes and, where possible, implement solutions to prevent future outbreaks. “Savvy companies throughout the United States have already implemented technology solutions that provide better visibility into their operating processes and address manufacturing problems before they happen,” he said. “However, with this new regulation in place, more companies will likely invest in technology solutions to compliment their processes to ensure quality and prevent the lofty expense of food recalls.”

As a result of this new bill, Rajaji said, "Food safety will have to be part of your DNA from top to bottom. You will need to design your processes and systems for food safety." So, everything from the R&D process to buying from the right vendors to how a company maintains its machinery may have an impact on food safety.

To comply with the law, to minimize the impact of a recall, and to provide transparency to distributors and retailers, Rajaji believes the food industry will increasingly turn to supply chain software and technology tools, like RFID and sensors that can monitor temperature to insure that food products were stored at an optimal temperature.

“You will need to make sure that you’re accountable and that every touch point across the supply chain is safe until it gets on the shelf,” he said. “To do that, you need tools to help you manage and capture data at every point. The legislation is going to drive the need for technology adoption to stay in compliance with the food safety legislation.”

Taken from interview done by Bob Trebilcock, Executive Editor of MMH
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