Ethical, Safe and
Secure Supply
Chains
Mark Skipper - Chairman
Agenda
• What can go wrong in supply chains
• Tracing supply lines beyond suppliers to their suppliers
• How to protect Brand Reputation
• Temperature Abuse Perishable Goods (Sea / Air / Road / Rail)
• How to protect Perishable Goods / Brand Reputation
Counterfeits
• Been a problem for decades, especially in Asia
• Fake products, that are getting harder to detect
• Pfizer alone detected 6,000 doses in last 10 years in Australia
• Customs seized over 500,000 fake products in cargo worth $43 million.
Washing power, sunglasses, beer batteries represented 80%. Recent BBQ
chicken bags, tooth brushes, stationery sets, phone accessories, personal care
products, car and aviation spare parts. 86% made in China according to TM
Investigation Services & Customs.
Counterfeits
• Companies concerned can register with Australian Customs
• Look out for price and product inconsistencies
• Internet, E-Bay and Gumtree sellers
• Legitimate products –third shift
• Horse meat, slavery, child / forced labour, Rana Plaza factory tragedy – lack of
visibility of suppliers in supply chain
Counterfeits
• Consumers buy – 40% on price, 30% on value, 17% on quality, 2% on ethics
• Fashion retailers – lean and agile supply chain – faster fashion cycles
How to protect Brand Reputation
• Important to know every aspect of your supply lines
• mining
• growing
• producing raw materials
• manufacturing
• shipping
• Ad hoc and documented monitoring needs to take place regularly
Perishable Supply Chains
Agriculture / Food
Ambient
Agriculture / Floral
Life Sciences
Industrial
Meat / Poultry
Fresh Cut
Pharmaceuticals
Some Chemicals
Dairy
Bulbs / Seeds
Blood / Plasma
Some Paints
Seafood
Organs
Fruit & Vegetables
Vaccines
Some instances where temperature could also impact ambient / shelf stable products, eg chocolate
Food Integrity – Traceability /
Certified (eg: Halal / Kosher)
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Examples
• Ambient
• US Army Iraq – Cola Cola poisoning – 2,000 troops sick
•Chilled
• Australia - $650,000 in vaccines, left of tarmac in Darwin awaiting airlift
• Thailand – meat container shipment – last leg truck had faulty power ($200,000)
• Frozen
• Australia – saving money, major Grocery ships frozen / chilled in same
compartment on 6 + hour journeys.
•
•
•
•
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Ships turning off reefers mid voyage for a few days to save fuel
Some rogue truck and rail operators as well
Some just forget to plug the reefers in
Impact of heat generated by truck brakes on immediate area above
Too densely packed loads, air cannot move around to cool or chill.
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One third of perishable food produced is lost, on an annual basis, due to lack
of cold chain integrity somewhere, amounting to 1.3 billion tons or $US 20
billion per year in USA alone, in supermarkets. Some goes to food banks
UN says its $US 48 billion, when you add in consumers.
http://www.ers.usda.gov/media/
183501/eib44.pdf
US Supermarket Data
63% of mustard greens
11.4% of fresh fruit
9.7% of fresh vegetables
4.5% of fresh meat / poultry / seafood
1
Worlds Temperature Zones
South
East Asia
Temperature –
23 May 2013
Humidity –
23 May 2013
Australian cold chain challenge
Food & HACCP Safety
Rate of deterioration
As a general rule, all products must be kept at temperatures NEVER
WARMER THAN the recommended temperature.
Always keep chilled foods at 0ºC to +4ºC to ensure that the product
temperatures is NEVER WARMER THAN +5ºC.
Always keep frozen foods and ice cream - NEVER WARMER THAN 18ºC.
Pharmaceuticals varies, vaccines usually between 2ºC - 8ºC
The rule also requires that a product dispatched from a manufacturing
or processing centre arrives at a cold store NEVER WARMER THAN
the above temperatures.
Laws / Regulations have changed
• US Food Modernization Act 2011
•
•
Australian Food & Grocery Council 2013 (code of compliance)
US Food Safety Modernization / Sanitary Transportation Act 2014
• FDA legally enforce receiver to reject loads that were EVER out of temp range guidelines (even 1 degree)
• includes sea, air, rail and road
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Frozen Meat Brisbane – Perth (< - 18 degrees)
Vaccines Melbourne – Perth (2 – 8 degrees)
Chilled Lamb Colac VIC – Brisbane (0 – 1.5 degrees)
Frozen Beef to Korea (< -18 degrees)
Possible Solutions
• Data Loggers
• low cost
• only accurate where positioned
• easily manipulated
• only find issues after receipt of goods
•Temperature Sensors in trucks / containers
• low cost
• only accurate where positioned - normally at air outlet, not over brakes and at other end
• easily manipulated
•Online Real Time Sensors
• low cost
• accurate, reliable, provable
• works with road, rail, sea and air using one system
• Complete traceability, huge competitive advantages
• ability to take action before load is spoilt
• Can call shipper when temperature gets to threshold, before spoiling
• If too late, can tell shipper not to deliver load
• Can re-organise re-shipment
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Online Real Time Sensors
(GPRS or Iridium Network)
Expensive loads, like pharmaceuticals could use more tags
Works through existing truck telemetrics
Online Real Time Sensors (GPRS or Iridium Network)
Intern
et
Interne
t
GPS Sat
Supplier
Iridium constellation
Smart-Trace Container Network
• Self organizing, self healing
• Star and Mesh topologies
• 900MHz ISM band spread spectrum
• Close metal barrier tuned antennas
• Using Iridium Short Burst Data
(SBD)
• Fully self-sufficient, independent
Can run
independent of
ships network
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Smart-Trace
Example of Data
Light / tampering
Real Time Alert Created
– one pallet was loaded hot
Perishable Supply Chains are a major concern globally
• Requires considerable more focus to ensure
• Brand reputation
• Freshness
• Tampering prevention
• Use by date validity
• Consumer Health
• Significant competitive advantage opportunity
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Thank You