26 Years. Since January 1996.
Consumer delivery demands push retailers to build, hire, and automate.
Just in time for the hectic holiday season, and on the heels of my return from visiting a new 3rd party logistics client in California, an article in the November 6th, 2015 Miami Herald newspaper about how retailers are ramping up ahead of the holiday season to meet ever growing consumer demands for faster delivery.
Major retailers – whether those with brick-and-mortar stores or those known for their online presence – are building more and larger warehouses and utilizing their store locations more strategically in order to figure out how to deliver ordered goods to their consumers faster and cheaper.
As noted in the article, some of the warehouses being built are the size of 20 football fields.
These warehouses are being fitted with robotic product picking machines that enable orders to be processed in minutes instead of hours. Amazon purchased robotics company Kiva in 2012 for $775M, and has 30,000 robots in use in 13 warehouses. The goal of these retailers is to meet what has become the acceptable consumer demand of two-day delivery.
How much are retailers investing? WalMart is committing over $1B per year this year and next, which is putting pressure on their profits and thus causing anxiety with financial analysts, the result which has caused WalMart stock price to fall. As of last year WalMart opened an additional five distribution centers and has plans next year to open three more.
All of these retailers building distribution centers and utilizing third party logistics companies is a great economic boost, as people are employed, warehouse supplies (e.g. racks, cartons, tape, computers) are purchased, robotics are acquired, and certainly construction itself is increased. And it is all because of consumers’ insatiable demand for products to be delivered faster and cheaper than where they can be ordered from a competitor retailer.
So get out those credit and debit cards one-and-all and shop away this holiday season! You will be helping retailers get a return on their investment, and will ensure the economy continues its drive forward as more retailers spend like holiday shoppers on warehouse space, employees, supplies, and technology to make sure we get our goods when we want them and as cheaply as possible, year-round. Because there are plenty of choices out there in a commoditized world where service remains the great differentiator.
Thanks and happy holidays to one and all.
Fraud is a culture.
According to a Washington Post article that appeared in the October 17, 2015 edition of the Miami Herald, the latest hit reality show in Brazil may also be the one that the government wishes would go away the fastest.
In a TV Globo expose, a reporter caught on camera legislative assembly employee Senhora Edinair dos Santos Moraes who, over the course of three consecutive days, was captured logging in to work in the morning only to turn right around and then either head home or go to a park. When interviewed on camera the woman informed the reporter that she was unemployed. The reporter, stating that the film crew had evidence of her reporting to her place of employment and then immediately leaving, sent an obvious shudder through the woman who then immediately ran away, chased by the reporter and camera crew. Too late, unfortunately, as the entire encounter was captured on camera and has been distributed through the media.
Senhora Moraes works for – or by now did work for – Goias state deputy Marlucio Pereira. She and two other employees have been summarily dismissed for their falsification of work and public service fraud.
So rampant has the story spread that even a video game called “Senhora Come Back Here” – a nod to the request of the reporter as he chased the woman as she ran away upon being exposed – complete with a rock music theme, has been downloaded more than 600,000 times.
Brazil is unfortunately awash in fraud and the citizens are tired of it. From the multi-billion dollar scandal at Petrobras the result is the jailing of high-ranking politicians and executives. Social media postings such as “Who has never paid a bribe?” imply that everyone is cheating and if you are not part of the fraud culture you are the sucker, not the other way around.
In fact on a TV Globo show the week before the “Senhora” incident, studio guests discussed a survey that revealed 69% of high school and higher education students admitted that they had cheated. Amid the audience laughter the guests acknowledged that they themselves had either cheated or helped someone to cheat. This shows that the bad habits in a culture that accepts fraud as a fact of life starts early.
When fraudulent behavior is woven into the fabric of society or business, as can happen due to such complicated and convoluted rules and regulations, illicit behavior becomes the only likely means of circumventing the system and streamlining the processes. The result is that fraud is going to occur because the “black market” operates without regulations, the only rules are either to survive or be eliminated. Government and business executives must take leadership roles: the clean-up starts with the tone at the top.
And speaking of governments stepping in to clean up their culture of fraud, the Chinese Communist Party is now prohibiting all 88 million party members from being golf club members too. The Communist Party believes that golf, along with excessive eating and drinking and “improper sexual relations” is a violation of a moral code issued by the Party’s top Central Committee which is comprised of the nation’s 25 top leaders.
The moral code is part of President Xi Jinping’s goal to rebuild the Communist Party’s tainted image. Golf is viewed as a symbol of Western extravagance and Xi wants to eliminate Western values. Golf courses are also notoriously viewed as venues where corrupt deals are made.
Security concerns of Internet-connected interconnected devices
In the series reboot of Battlestar Galactica, Commander Adama, played by actor Edward James Olmas, strictly forbid the networking of the Galactica’s primary computer systems together for fear that doing so would allow them to be compromised by their machine-enemy, the Cylons. He was proven correct in several episodes as to how keeping critical systems such as navigation and defense segregated and disconnected was a winning move against a cyber enemy.
In July 2015 Jeep was forced to recall 1.4 million vehicles after it was discovered that hackers could infiltrate the computer system of various vehicles and take control of the automobile’s navigational control mechanisms, e.g. braking, acceleration, and steering. The hackers gained entry via the vehicle’s entertainment system and then made their way to the automobile’s connected control systems.
Fiat-Chrysler labeled the hacking a “criminal action.” However this does nothing to wipe away the fact that 1.4 million of its vehicles – and possibly more – were vulnerable. Criminal – by who? The automaker or the hacker?
According to a Bloomberg News article in the July 31, 2015 Miami Herald, drug pumps can be hacked resulting in too much or too little medicine being delivered to the patient, in either cause causing life-threatening injury or death. The United States Food and Drug Administration (FDA) has issued a warning to healthcare providers that drug pumps called Symbiq manufactured by Hospira should be taken out of use immediately because they can be hacked via the healthcare facility’s wireless networks.
And as reported in the September 4, 2015 Miami Herald, certain baby monitors do not have basic security features which make them vulnerable to cyber-hacking. The results being that unknown persons may be watching your little ones, and that the unsecured baby monitors could be used to take control over other WiFi enabled devices in your home such as a security system or a personal computer. Security lapses in the baby monitors included unchangeable and hidden passwords or a lack of encryption of their data streams.
With the figurative explosion of Internet-connected devices, one must consider security before connecting these devices and relying on them, especially when it comes to life-altering consequences. Sensors may not be that smart, only capable of registering simple environmental changes, but the interpretation of those changes is why device security needs to be implemented at the connection source and within the device itself.
This is no different than protecting a computer with a firewall and anti-virus software.
We also have to think of the practicality of some devices being advertised as Internet-connected: just because you can does not mean you should. What will an Internet-connected thermostat provide you that a traditional thermostat does not? Do you really need a mobile banking application to check your account balance every hour? Is it necessary to have household appliances connected to the Internet? Are we really comfortable with devices around our house that record what we say when we talk to them, and are they really not listening when we tell them not to? Ask yourself if the feature is a must-have or superficial add-on the next time you consider a product purchase. How much more of your personal identity are you willing to shed and lose control over to an inanimate product that is the face of one or any number of consumer product or – eventually – marketing data companies?
Ultimately as consumers we have the power to control what we purchase and what features companies include or exclude in the products we buy. We need to ensure our products are safe and reliable, and this needs to include hardened against hack attacks in the upcoming age of the Internet Of Things.
A few months ago I caught up with June Wolfe, President of the South Florida Manufacturers Association. It had been a few years since I had seen June especially as she had to navigate through a personal health crisis which, I am very happy to report, she came through with successfully. Ever the perky cheerleader, June was at an SFMA event meeting and greeting everyone because, quite honestly, she basically knows everyone in South Florida’s manufacturing community and essentially everyone in South Florida’s manufacturing community knows June. I have known June for 15 of Katzscan’s 19 years in business.
There of manufacturers associations in Florida’s major metropolitan areas, but at 40 years old the SFMA is probably the grand-daddy of them all, and may be the largest too.
Recent articles point out that millennials are not gravitating towards manufacturing jobs because they believe them to be “dirty”. Manufacturers are also on the verge of losing critical knowledge as their baby-boomer employees retire and, based on surveys, have little to no plans on replacing these employees and the knowledge as it walks out the door. With all of the efforts being made to re-shore manufacturing and bring back pride in “Made In The USA”, who is going to make all of these products if there is no one to fill the employment gap?
My professional career was entirely in manufacturing companies and I absolutely loved it! Film processing, food processing, apparel manufacturing, and industrial textiles represented the companies I worked for before starting Katzscan in January 1996. I have always had a fascination with how something was made, and seeing it first-hand has given me a much greater appreciation.
Yes, manufacturing can be and has been a dirty industry. But modernization has cleaned it up tremendously, and current manufacturing is cool: it is process driven and automated. The machines used today are some of the most advanced robotics around, and the operators that enter the parameters and ensure their calibration are as technically skilled as any information technology professional. Factories are no longer health-hazards and instead can be as wondrous to walk through as a theme park. My shoe manufacturing client’s factory in China was more meticulously clean than many manufacturing facilities I have visited in the United States.
Katzscan is an official endorser of Manufacturing Day: www.mfgday.com
I firmly believe in manufacturing, I love manufacturing, and I support manufacturing. It is the backbone of our economy. To keep manufacturing going strong we have to show the next generation that it is clean, it is cool, and it is high-tech.
If you believe as strongly in manufacturing as June and I do, go to www.mfgday.com and, if your company is able, learn how to host an event. Let’s not just re-shore jobs: let’s make sure manufacturing will not slow but also grow.
This month I introduce the relaunch of the Katzscan web site.
Every few years I go through a major overhaul of the site not only because my consulting practice evolves but also as my own web development skills get better. Yes, I do my own web site because I know how I ultimately want it to look and feel and read…and I am a bit of a control fanatic when it comes to my business.
What you will find different about the new web site is that it is bolder, more colorful, more graphical, and highlights my ever-evolving technical and operational skills more clearly. I have added training to my list of services, pulling from my four years as a university adjunct instructor for clients who need to enhance their employees’ skills in Microsoft PowerPoint®, Word®, and Excel®. (As a Microsoft Access® developer I will provide training in that product too.)
I pulled out a six-series seminar I produced for the retail industry trade association that educates selling companies on how to be non-disruptive retail vendors. I am now offering this training since the retail industry trade association returned my intellectual property back to me when they merged with the global barcode standards organization in 2013. Vetted by six retailers and the global barcode standards organization, this educational seminar will inform any company who wants to sell into retail literally everything they need to know with regards to the operational and technical impacts and requirements of supply chain vendor compliance.
You can also get a sneak peek at my forthcoming second book. A possible book jacket image is displayed as well as a link to my book’s page on my publisher’s web site where you can read background information and place an early order if you would like.
If you have never visiting www.katzscan.com or it has been a long time since you have stopped by, please go there and look around. Aside from learning what I do, you’ll see that I am an active writer of not just books but trade journal articles; an active speaker with 40 conference, university, and meeting presentations performed nationally and internationally; the list of trading partners I have helped my clients conduct business with; and the list of companies across a wide variety of industries I have helped in the past 19+ years.
I have a solid track record of consistently performing on-time and on-budget.
If you know of a company, maybe your own, that could use some help in transforming data into meaningful information, strengthening supply chain relationships, transacting supply chain business, help with a software system, revitalizing operations, or improving employee performance, give me a call or send me an e-mail.
Thanks in advance for stopping by www.katzscan.com and visiting. I think you’ll be glad you did.
96th Annual IMA Conference Wrap-Up
I have just returned from Los Angeles where I had the honor of presenting at the 96th annual conference of the Institute of Management Accountants. Any association that has been around long enough to have had ninety-six years of conferences is certainly one to be admired for its strong membership. There were over 600 conference attendees and over 60 attendees in my session on auditing for supply chain fraud, the subject of my first book.
Since the conference drew attendees from all over the world I thought I would help give my session audience a perspective, albeit from a somewhat humorous vantage point, on my exposure to fraud while I tell them a little about my personal and professional background.
Displaying a map of Florida and pointing to the South Florida (Miami – Fort Lauderdale – Palm Beach) area, I highlighted some of the notable ways in which the state of Florida, and the South Florida area in particular, tops the national lists for various fraud topics:
· Former Fort Lauderdale attorney Scott Rothstein brought down all those around him, personally and professionally, in his $1.4B law firm fraud;
· South Florida is #1 in the US for personal identification theft;
· South Florida is #1 in the US for tax return fraud;
· South Florida is #1 in the US for mortgage fraud from 2010-2014;
· South Florida is #1 in the US for Medicare fraud, deemed a “hot spot”;
· South Florida is top-five in the US for home value decline;
· Governor Rick Scott is the former CEO of the company who paid the largest Medicare fraud fine in history, $1.7B, though he escaped “Scott-free” from prosecution;
· 5% of Miami-Dade county mayors faced fraud charges in 2013-2014.
(I also pointed out to my audience that the state of Florida ranks #1 in the United States for lightning strikes and shark attacks though I did not believe either were targeting the right people.)
Where did I learn about all of these fraud facts? From my daily newspaper. For my newsletter readers who do not know what that is, it is the papery thing that tells you today what happened yesterday. I still get it and enjoy the daily read and review.
Yes, South Florida is full of fraud. The causes may be many. Florida, and again South Florida in particular, is also known to have one of the highest immigrant populations in the US, one of the highest income disparities in the US, and the state (local geography) with the most Obamacare signups in the US. Is it cause-and-effect or just coincidence?
Probably a mix of both.
The IMA conference was a wonderful opportunity to speak to an engaging audience, attend interesting sessions, meet other professionals, and share stories.
For more information in the Institute of Management Accounts please go to www.imanet.org.
Can website companies be sued for listing false data?
That is the crux of the question in the case of Spokeo versus Robins when the United States Supreme Court considers this in the term beginning in October later this year.
Thomas Robins of Virginia sued website operator Spokeo for publishing incorrect information that he claims adversely affected his job search. Spokeo incorrectly listed his age, incorrectly stated he has a graduate degree, and incorrectly stated he was wealthy, married, and with children. Mr. Robins – unemployed and looking for work – claims this incorrect information harmed his job search prospects.
The case is being argued on the basis of the Fair Credit Reporting Act (FCRA), which prevents credit reporting agencies from compiling incorrect or inaccurate information which could harm a person’s ability to obtain a loan or pass a job employment background screening check.
Inasmuch as there is no direct proof that Mr. Robins was harmed, Mr. Robins – as the plaintiff – need only argue that his rights were violated under the FCRA for a lawsuit of this type to proceed based on input from one legal analyst.
Mr. Robins initially lost his case in district court but the Ninth U.S. Circuit Court of Appeals in San Francisco reversed the lower court decision, ruling that Spokeo did indeed violate the FCRA.
This opens up a potential flood of billion-dollar lawsuits against search-engine and data-aggregation companies if Mr. Robin’s class-action lawsuit is successful. Web sites Facebook, Google, and eBay are (naturally) on the side of Spokeo.
Not mentioned in the article, but could this open up other lawsuits as well? Could website viewers sue website operators for posting incomplete or inaccurate information that website users rely upon? What about maps and directions that don’t guide us directly to the spot for the address we entered? Are we able to sue for damages for incorrect information? Will all websites need information accuracy disclaimers on them in the near future?
The article states that even if the Supreme Court does not side with Mr. Robins the case will likely spur Congress to act and institute laws to protect consumers from the effects of false financial-related information on web sites.
This legal case certainly has ramifications for website operators, some of which are yet to unfold.
For the complete article please go to:
It is always nice to be remembered.
I received an e-mail from someone who I had not communicated with for five years. I only know Dennis from participating in some conference calls as the member of a team put together by a South Florida doctor trying to get a new medical product to market. I was referred to “Dr. Joe” for my expertise in supply chain vendor compliance as the goal was to get the products to retail, which would require my unique knowledge in this niche area.
Dennis, a doctor himself in the northeastern US, said he was always impressed with what he heard me say on the conference calls, how I offered clear and practical business advice and how I was able to turn around the problems presented by the group by offering a different perspective on the actual issue and then providing common sense solutions.
I was quite humbled by this that not only was someone listening but that after five long years someone remembered.
The purpose for Dennis reaching out is that he wanted to discuss his own business idea with me, flushing out the rough edges of the concept he was considering. In the course of our one-hour phone call I refined his idea and sharpened the focus to a more practical business model.
Reflecting back, I realize I have performed this service more times than I thought. It is the mix of my technical and business skills that have allowed me to take concepts and create software prototypes, design databases from ideas, brand companies via clever web site domain names, and launch people into their own businesses by helping them find their specialties.
Business strategy consulting is something I do as part of my services to my clients, and to friends and special acquaintances. Unfortunately over the years these talents have been dismissed by some, and the results as I have witnessed have always unfortunately resulted in non-start or failure. And happily where my advice has been followed my clients and friends are prospering nicely.
Katzscan has grown to be not just national, but international in scope, innovating along the way, changing in business model as my evolution has occurred. It might be easy to initially dismiss this technical person as someone who cannot engage in a conversation with regards to business strategy, but my advice is do not judge all books by their cover … unless of course it is the one I authored.
And as for Dennis, it is too early to tell if his business idea will make for a profitable business yet, but with a clearer vision he will be able to make that determination soon.
If you know of a company – maybe your own – that is struggling with its strategic direction, which may be due to the inability to get meaningful information upon which to base decisions, it is probably time to engage a consultant with the unique dual-perspective to help bring clarity to the picture.
Florida can’t seem to CONNECT to its unemployed.
The state of Florida launched a new website to support its hundreds of thousands of unemployed residents in October 2013. But according to a February 28, 2015 article in the Miami Herald newspaper, the state’s auditor general issued a rather scathing report the day before criticizing the CONNECT system, adding to the already existing pile of evidence that the system is in a state of chaos.
The CONNECT system is currently running a price tag of $77 million, more than $14 million more than the previous estimate. The CONNECT system is managed by the state of Florida Department of Economic Opportunity (DEO).
The audit, conducted between February 24, 2014 and June 30, 2014, covered a time period when 500,000 unemployment claims were processed. The audit revealed several areas of concern such as:
· Security: Claimants were required to use their Social Security numbers to log on in violation of state law and exposing users to unnecessary risks.
· Timeliness: The DEO may have broken federal laws by not paying or resolving claims in a timely manner. The audit found that 44% of over 400,000 documents being processed as of June 30, 2014 were in the “unidentified” queue. The DEO had no procedures on how to handle unidentified documents in a timely manner.
· Accuracy: The CONNECT system itself repeated entered wrong data on documents such as inaccurate postmarks on documents which could help negate a legitimate claim. Other cross-checks to prevent the inaccurate entry of data were not in place, the result being the increased odds of incorrect cancellation or overpayment of a claim.
· Fraud: Because of loose safeguards over 20,000 potentially illegible claims were paid between March 1, 2014 and June 30, 2014.
As a software, operations, and anti-fraud professional I am aghast at the gaping holes that were overlooked. Pick any small off-the-shelf accounting software application such as QuickBooks® and you will find more data integrity features and checks-and-balances apparently beyond what the CONNECT system has embedded in its design.
The fact that tax dollars – my tax dollars – are being spent on such a disaster causes me more dismay, let alone the reality that it is running more than 20% over budget and will apparently need more money to fix the numerous problems the audit uncovered.
What makes this all the more egregious is that it is unemployed folks – people who really need their money on a tight timely basis – who are relying on this broken system.
Thinking through possibilities, examining all of the angles, stepping through the processes, worrying about what might fall through the cracks: these are the things that I consider on each and every project I work on for my clients. It is too bad the designers of CONNECT couldn’t connect the dots on this project, and it’s the taxpayers and unemployed claimants who are left to unnecessarily suffer for it.
Oh boy – it seems that things are getting a little confusing when it comes to whether it is a good idea to back up e-mails. On the surface common sense says it’s a good idea to do so, but when I read a recent article for a moment I wasn’t too sure.
Businesses are expected to back up e-mails. In some circumstances such as Sarbanes- with regards to public companies the record-keeping requirements may be essentially forever because they are legally required.
E-mail retention and retrieval was a big problem before cloud services. Backup tapes were often reused so a true history of all e-mail from “Day Zero” may not have been possible. If the company migrated from one e-mail application or server to another and did not include the history in the backup and something happened to the old system rendering the e-mails irretrievable Oxley it could be a problem. Backup tapes have a fixed capacity so they are limited to how much data they can store, possibly leaving behind very old history deemed not as relevant should a recovery from tape be required. The backup to tape needed to be completed during a quiet period when little e-mail activity was occurring, so the more data to back up the longer the backup would take, a contradiction to be managed by information technology departments. Tapes were not perfect, and a physical tape error could render useless an entire backup.
With cloud storage and virtually unlimited server capacities the problems of data retention and recovery would seem to have been solved, which I would submit they have. But when l read the following piece in the February 12, 2015 Miami Herald newspaper it gave me pause for thought about whether all of this e-mail backup was really such a good idea:
It seems that the United States government is able to use vague language in the Electronic Communications Privacy Act of 1986 that extends protection against unreasonable search and seizure to electronic communications only sent or received fewer than 180 days ago.
The “180-day” rule enables U.S. government officials to treat any e-mails, text messages, photographs, or documents stored on remote servers (a.k.a. “the cloud”) as “abandoned” and “therefore accessible using administrative subpoena power, a tactic that critics say circumvents due process” according to the article. This includes anything deleted that may yet still exist on a third-party server.
While some members of Congress are suggesting legislation to close the loophole, some government officials have warned that any such legislation would hamper government civil and criminal investigations by agencies such as the Securities and Exchange Commission which has subpoena but not warrant authority.
In my opinion given the corporate scofflaws that seem to abound any hampering of a regulatory agency’s ability to get to the truth is a bad idea. The vast majority of us have no cause for concern about a subpoena to search our old e-mails, and I am still retaining my full e-mail history. But I have little doubt that many corporations are contacting their local lawmakers to close this loophole given the continual business shenanigans that make the news and the proverbial potential skeletons lurking in corporate e-mail closets.
This is not the only instance of the U.S. government dusting off old laws to catch common-day crooks, as mail and wire fraud laws are routinely applied to e-mail scams. Recall that Al Capone served his longest prison sentence for tax evasion: http://www.fbi.gov/about-us/history/famous-cases/al-capone
As I wrote about in my book, Detecting and Reducing Supply Chain Fraud, (Gower Publishing, August 2012), I defined the supply chain as the movement of something between a supplier and a customer from start to finish. The something that moves can be raw materials, components, finished goods, documents, data, money, services, or people: a supply chain can be comprised of some or all of those things that move, whether in series or in parallel, whether individually or with other things grouped together.
(FYI: Supply chain methodology is used to make decisions upon which people talent resources are distributed by some of the top global consulting firms.)
For all of the technology that ties the world together, for all of the transportation infrastructure upon which our goods are carried, for all the coordination that clicks, for all the sensors that signal, for all of the computer software that calculates to precision, nothing within any of the supply chains around the world would happen without the people that build and operate them. From the decision-making analysts to the transportation specialists to the freight handlers, supply chains rely on people to make them move.
The reliance upon people is critical so much that a person making an incorrect decision can have a significant negative impact on a supply chain, including a severe quality issue resulting in illness, injury, or death. Certainly the need for 100% performance in daily operations to maintain trading partner compliance, regulatory compliance, and perfect order accuracy is enough pressure without having to consider the aforementioned personal consequences of certain failures.
All of this is why The Last Mile infographic in the December 2014 issue of Inbound Logistics (www.inboundlogistics.com) magazine was more than just a little disheartening but completely applicable to supply chain fraud. With data provided by CS Recruiting (http://cs-recruiting.com), the page was titled “The Hidden Costs Of Logistics Hiring” and mapped out the costs a company goes through in its recruiting efforts.
What I found of particular interest were the following statistics related to resumes:
· 43% of people misrepresent themselves
· 12% of people misrepresent their credentials
· 15% of people misrepresent their length of employment
· 17% of people misrepresent their skills
· 27% of people misrepresent their salary
· 19% of people misrepresent their job responsibilities
Essentially all this misrepresentation represents fraud! If someone misrepresents themselves and is placed in a position of authority or decision-making which they are not actually competent to hold and then make a fatal or harmful decision they have put every single person within that “fate chain” – themselves, the employer, the potential victims – at risk.
For my staffing and recruiting friends reading this newsletter, you may want to reference the CS Recruiting infographic and the similar one from Inbound Logistics as they are a little bit different. Most certainly there is value to your services in qualifying candidates on behalf of your clients and helping to filter out those who would misrepresent themselves as your own reputations are at risk too.
Preserving integrity expands beyond the bounds of your staffing and recruiting companies: it reaches into the supply chains of your clients. Candidates with questionable credentials can inflict damage into your clients’ supply chains that may reverberate back in the products you (and I) consume and use, with potentially damaging effects, due to their fraudulent professional representations which were left unchecked as part of a due diligence process.
Beef supply chain traceability.
I am addicted to BBC news. From their nightly news broadcasts to regular features like Click (a technology showcase), HardTalk (a one-on-one interview) and Outside Source (a panorama of news highlights), the quality, insightfulness, and diversity of the programs, newscasters, and reporters is simply second-to-none in my opinion. The range and detail of information covered is vast and there is always some new knowledge to be acquired, as I discovered with a very interesting segment on Uruguay’s beef industry supply chain.
Uruguay is a country with a human population of just under 3.4 million people but approximately 12 million cattle. Under a government mandate, therefore required by law, there is full traceability in the beef supply chain in Uruguay, literally from farm to plate. Regardless of whether the farm has two cows or two thousand, every farmer in the country fully participates in the program. That is correct: there is 100% traceability because there is 100% participation.
The implementation of the program cost $70M but it was paid for by the state: there was no cost to the farmers. Given Uruguay’s beef export market has a value of $1.5B this was realistically a small investment to establish complete credibility in the beef supply chain. A problematic cut of beef could be traced to the source farm and potentially even the cow.
Full traceability is viewed as a driver to increase sales, as well as it should: no other food supply chain in the world can currently match Uruguay’s 100% computerized beef traceability. If the commitment to transparency and quality holds true Uruguay is truly at the forefront of achieving full farm-to-plate food supply chain traceability. Imagine being able to directly trace a problem in the food supply chain back to its source with relative speed and ease, halting more outbreaks of a disease before it spreads, revealing the root-causes of the problem faster, all in the name of not just economic savings but also saving affected lives.
With all this visibility and traceability, the chances of fraud occurring, e.g. beef from outside sources, is significantly reduced. This retains the integrity of the quality of the products within the supply chain and thus maintains the value of the products themselves.
For more information on this story please see the BBC news web site: http://www.bbc.com/news/world-latin-america-30210749
Welcome to a new year and a new standard in food supply chain traceability.