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Recall Depends on Supply Chain Data Management

Late last Thursday I received a call from Costco telling me the frozen vegetable medley I purchased might have listeria contamination. It notified me of the CRF Foods recall and told me to throw out the vegetables or bring the bag in for a full refund. This was an impressive feat of customer service – not only did Costco identify the offending product in my purchase history but also offered a warning to avoid the item and refund to preemptively counter any complaints I might file to the giant warehouse retailer. They must have a good master data management system in place, I thought.

Searching online, I discovered that CRF Foods first recalled 15 frozen vegetable products. But yesterday, the produce company expanded its voluntary recall to about 360 products under 42 different brands, including products sold through Trader Joe’s, Safeway and Costco in U.S. and Canada.

According to NPR, a major reason the company expanded the recall was the CDC’s tool PulseNet to track the bacteria’s spread. The CDC sequenced the genome of listeria and discovered that the small cluster of 2016 illnesses was linked to previously sequenced listeria genomes. This particular strain matches bacteria that had infected people back in 2014.

Food product companies take heed: CDC’s venture into whole-genome sequencing means that the agency can identify more listeria outbreaks. In fact, in 2015, the CDC announced two outbreaks that began in 2010 of ice cream and soft cheeses. While great for public safety, the agency’s proactivity means food companies may be caught off guard. Throwing poor data management into the mix is a recipe for disaster.

According to the story “Total Recall” in CIO magazine, globalization accounts for some of the surge in recalls in recent years. Many companies depend on overseas production. As the supply chain grows longer, the risks of contamination and lower quality control require companies to step up their game. Companies need to be tracing the pedigree and whereabouts of the raw materials used to make their products all the way through the manufacturing process said Steve David, former CIO of Procter & Gamble in an interview with CIO magazine.

“The ugliness of bad data management really hits you when you have a product recall,” David says.

Even if your multi-national global enterprise has a strong grasp on managing your own product data, are you sure that your suppliers are doing a similarly good job?

The CIO Magazine story quoted Fernando Gonzalez, CIO of Byer California, a $US300 million clothing company as saying, “If you can’t tell it was this production line on this shift on these days,” Gonzalez says, “then you’re stuck with an estimate and doing an expensive recall just to be safe.”

Any one of your suppliers with poor data management could result in a gap of your records. If you cannot trace where the raw materials came from and what materials they had come in contact with, this one lapse in data management could cost “several million dollars”.

According to CIO magazine, a recall of ConAgra’s peanut butter resulted in abounding lawsuits. Even if customers don’t sue, many will vow never to touch the food item that got them sick again. It is no surprise that the better a company recalling products can narrow the scope of the recall, the lower the costs of negative brand publicity, lawsuits, government fines, lost revenue, and duration of the recall.   

Traditionally, highly regulated industries including the pharmaceutical and aerospace industry have supply chain management down to a science. Federal regulations governing public safety require these companies track their finished products down to the component level. Many of these companies benefit from robust master data management systems that support their supply chain management, allowing them to trace components down to the temperature of the room where parts and drugs are manufactured.

Even if your industry doesn’t have as much government oversight as pharma and aerospace, according to CIO magazine, well-managed enterprise data promises supply chain security, improved efficiency, better inventory management, reduced cycle and shipping time, and better customer satisfaction.

As a customer, I feel confident going back to Costco and buying more frozen vegetables once this recall blows over. While a recall is not ideal, knowing that the company proactively contacted me to make sure I was aware of the recall. Costco would not have been able to do this if their data management had been lacking.

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