The United States had the Saintpaul salmonella outbreak. Canada is having an ongoing listerosis outbreak. And now China is suffering potentially the worst scare of them all with a milk scandal that has sickened fifty three thousand infants and KILLED four.

All of the above outbreaks are associated in one way or another with food manufacturing, distribution and or processing of produce, meat and dairy products. If you don?t remember your basic food groups, these are three biggies.

In Canada as of September 4th 2008, 18 people ha died in connection with Listeria and seven other deaths are under review as a result of 38 total confirmed cases. That is a total potential death rate of sixty six percent (66%). Listeria is known to have a death rate of 25%. We all remember that over fourteen hundred people were infected during the U.S. salmonella outbreak. Salmonella is typically associated with less than a one percent mortality rate. That does not make it any less scary.

The most frightening of these outbreaks is the milk scare in China. You might ask why since it is not associated with North America we should consider it the most frightening. Because it is not caused by bacteria or an allergen, it is caused by a product that is not supposed to be used in food. It is the same product that was responsible for killing hundreds and sickening thousands of pets in the United Sates during 2007.

Melamine is an industrial product that can mimic protein content when it is added to food products. This practice is totally unethical. In the situation in China melamine was added to milk products to create a false protein reading on milk products that otherwise would have been rejected.

Why should we be concerned beyond just caring for our global family? Because the world is a very small place and we travel constantly for business and pleasure even with inflated fuel prices. The United States and Europe ban Chinese milk products. I have friends that live in Japan. What about our troops in other parts of the world or business travelers to China, Australia, Korea, Africa etc. We need to be vigilant.

The Sanlu Group a Chinese dairy giant is the guilty party in this case and apparently new for months that Melamine was contained in their products. This company appears in our SafeSourceIt North American Supplier Database. We will flag them for future reference. We continue to believe that supplier safety certification adherence and review is as important a requirement as is greater than one forward one back traceability.

We look forward to your comments.

Spend Management Companies need to focus there effort on automating and improving retail spend management tools by 2010.

We owe this to consumers, and the environment. Every company in the world today is dedicated to its own ideas, its own successes and its own profititablily. Don?t let anyone tell you differently. While oil companies are recording record profits the world economy is falling apart. Among other out of control costs, retailers are paying more to ship products which in turn drives up the cost of those products for consumers. Consumers as a result are spending less. As a result retailers are struggling and closing more stores than any time since 2001. This is a vicious cycle. Procurement life cycle automation can solve this problem.

The technology exists today to attack the problem of escalating costs of raw materials, shipping, retail price increases and other associated supply chain costs and it has for years. To some extent, too much thought leadership in these technologies is being invested in games, consumer gadgets and the like instead of less sexy tools focused on reducing the cost of goods which will instantly improve profitability and foster economic growth creating new jobs. This is the cycle we should be working towards.

Artificial intelligence (AI) has been around for years. John McCarthy, who coined the term in 1956, defines it as “the science and engineering of making intelligent machines.”
According to Wikipedia, Major AI textbooks define artificial intelligence as “the study and design of intelligent agents where an intelligent agent is a system that perceives its environment and takes actions which maximize its chances of success. Isn?t that exactly what we should be trying to do with the automation of spend management and the global supply chain.

Robotics is also not a new technology and has been used in manufacturing for years. I?m sure most everyone has heard of Asimo a humanoid robot created by Honda that can do many things normally attributed to human beings such as recognizing moving objects, recognizing postures and gestures, distinguishing sound, recognizing environmental situations such as terrain like steps and recognizing facial expressions. Beyond recognition, Asimo can also react to these conditions. Some say by 2015 Asimo will be available for purchase by consumers to conduct daily tasks in the home and at work.

So, what does all this mean to the procurement professional and why should it matter? Check in with tomorrows post to find out.

We look forward to your comments.

Is reverse auction utilization up or down, do they save money? There has been a lot written lately which shows there is interest, the answer again depends on who you ask and what industry you are speaking about.

I was reading Spend Matters today and the title of Jason Busch?s blog was Reverse ?Auction-Quantifying-the-Savings-Delta. Jason also quoted a blog by David Bush on E-Sourcing Forum posted recently of a case study which according to Jason does as good a job as any at showing the incremental value an auction can bring on top of other negotiation techniques.

This author posted a blog on September 2nd titled E- Auctions success road blocks. What are your true savings opportunities? This blog discusses the roadblocks to successfully understanding and gaining savings in a reverse auction. As we all know there are a number of different types of auctions that are part of the overall RFX process. I discussed this in There are all types of reverse auctions on June 6th.

In complex retail procurement events that require very complex information review, it is normal to begin with a Request for Information or RFI in order to narrow the field of qualified suppliers or to try and understand whether or not your actual goals and requirements can in fact be adequately met by the marketplace. This might include projects such as a major point of sale software replacement. Once the RFI has been reviewed and supplier?s that meet your criteria are selected a Request for Proposal (RFP) which includes pricing is generally submitted. At this point a reverse auction need not be run in order to compress pricing because you are negotiating directly with a limited number of vendors, visiting headquarters to view product demonstrations as well as a variety of other detailed event activities. In this process where the reverse auction may be used is on some of the more commoditized components of an open platform such as terminals, scanners, check stands etc. However this is only one person?s opinion. Hopefully your provider will have a variety of well authored strategies to share with you by individual category.

We look forward to your comments.

Can procurement professionals help citizens and potentially the economy recover from a natural disaster like hurricane Ike at the same time?

The Condition!

While the United States is in the midst of one of the most important elections in U.S. history, the fact is that the election of the first black president or female vice president has not had front page attention this last week with most national news media. There are two reasons. The first is a natural disaster named hurricane Ike which left more than six million people from the gulf coast to the upper Midwest without power and significant property damage. The second is the U.S. economy this week alone with nearly a nine percent loss in the stock market and another failure of Lehman Brothers a major U.S. based investment bank and the bail out of American International Group (AIG) by the Federal Reserve with up to eighty five billion in loans.

A simple potential solution!

So, what can procurement professionals do? We already know that billions of dollars in new products and services such as building materials, automobiles, clothing and construction will be purchased by service organizations providing benefits to disaster victims as well as by consumers themselves once they receive insurance payments. To support these efforts, procurement professionals can take extra care to insure that the products they buy substantially support the local economy. By purchasing products from U.S. based companies we keep the Americans employed that build, ship, install, and train and otherwise support these products. Simple questioning can be asked of your suppliers. First, are all the products we procure from you made in the U.S.A.? Second, are all of the raw materials that are used to make the products we procure from you sourced within the U.S.A.? Third, are all of the products we buy from you picked, sorted and packaged within the U.S.A.

We look forward to your comments.

With all of the issues facing our planet, both future and present employees are weighing their decisions as to prospective work places on more than just money. Are your human resource procurement professionals savvy enough to your company green practices and policies to attract the best and brightest?

Procurement does not only relate to the products your company buys for resale or supplies that your company uses internally. If you ask a human resources (HR) professional they are in the procurement business as it relates to people. In fact many of the tools they use during the recruitment process can in fact be sourced to reduce their cost using reverse auctions such as background checks and drug screening kits. First however they need to get the best candidates to want to work for you. So, these are not the most important products for human resources professional to be concerned with. The job of human resources when conducting an interview is to sell your company, to make it the first place someone wants to interview and the last place they want to leave once hired. Increasingly, the social conscience of your company is becoming a deciding factor as to whether or not quality candidates want to select your company as a place to work. The first question this begs, is your human resources department in a position to clearly discuss your company?s corporate social responsibility programs and initiatives (CSR)?

In a recent survey listed in USA TODAY and conducted by experience.com of 2,774 college students, the following question was asked. If you had two job offers and one company was ?green? would that have an impact on your decision? A full seventy nine percent (79%) answered yes. Let?s hope your CSR program leads to the need to use the other products required in this process because your human resource professionals are armed with a strong story.

We look forward to your comments.

Tomato?s are grown in Arizona, shipped to Mexico and then sold in U.S. markets.

This author has written a lot about the Saint Paul salmonella health scare. I have also written about the benefits of NAFTA and the fact that rising fuel prices may bring production and manufacturing jobs back to North America. But what happens if these same forces conspire to mask problems from the FDA, USDA and other organizations as they try to research and solve these outbreaks.

An article in the Sunday edition of the Arizona Republic titled Fallout from Arizona?s employer sanctions laws discusses the issue of Arizona companies sending work to Mexico due to the high cost of labor in the United States. Specifically to our subject, is the example of Willcox based Eurofresh Farms picking their tomato crops at 5 a.m. and shipping them to the bordering Mexican state of Sonora to Collectron International Management Inc. for processing and reshipment back to the U.S. the same day.

Does anyone recall when during the tomato scare we were told not to eat Jalapeño?s processed in Mexico? My blog Holy Jalapeño discussed this issue. How much of our produce is processed in Mexico. Do Californian, Texan, New Mexican and other bordering states ship product to Mexico for processing? If so, what crops? Should we not have been eating any Jalapeño?s? Or, only those jalapeño?s grown in Mexico. This seems like another case of consumers not knowing what we don?t know. Are retailers aware that products they are buying for resale are being processed outside the U.S.? How do we know that these products are not mixed with products grown in Mexico?

This author believes that retailers and consumers should expect complete disclosure from our federal organizations. If indeed we all support traceable data within our supply chain, this is a perfect example of something that seems simple not being traceable by one forward one back methodology. In fact, one back from the retailer might be Eurofresh Farms in this case. What would not be readily apparent is the step to Mexico or any potential introduction of Mexican grown products into the cycle. That would require at least two back and maybe three or four back.

Let?s all support true traceability and full disclosure of where our products come from.

We look forward to your comments.

Tomato’s are grown in Arizona, shipped to Mexico and then sold in U.S. markets.

This author has written a lot about the Saint Paul salmonella health scare. I have also written about the benefits of NAFTA and the fact that rising fuel prices may bring production and manufacturing jobs back to North America. But what happens if these same forces conspire to mask problems from the FDA, USDA and other organizations as they try to research and solve these outbreaks.

An article in the Sunday edition of the Arizona Republic titled Fallout from Arizona’s employer sanctions laws discusses the issue of Arizona companies sending work to Mexico due to the high cost of labor in the United States. Specifically to our subject, is the example of Willcox based Eurofresh Farms picking their tomato crops at 5 a.m. and shipping them to the bordering Mexican state of Sonora to Collectron International Management Inc. for processing and reshipment back to the U.S. the same day.

Does anyone recall when during the tomato scare we were told not to eat Jalapeño’s processed in Mexico? My blog Holy Jalapeño discussed this issue. How much of our produce is processed in Mexico. Do Californian, Texan, New Mexican and other bordering states ship product to Mexico for processing? If so, what crops? Should we not have been eating any Jalapeño’s? Or, only those jalapeño’s grown in Mexico. This seems like another case of consumers not knowing what we don’t know. Are retailers aware that products they are buying for resale are being processed outside the U.S.? How do we know that these products are not mixed with products grown in Mexico?

This author believes that retailers and consumers should expect complete disclosure from our federal organizations. If indeed we all support traceable data within our supply chain, this is a perfect example of something that seems simple not being traceable by one forward one back methodology. In fact, one back from the retailer might be Eurofresh Farms in this case. What would not be readily apparent is the step to Mexico or any potential introduction of Mexican grown products into the cycle. That would require at least two back and maybe three or four back.

Let’s all support true traceability and full disclosure of where our products come from.

We look forward to your comments.

On April 30th the FDA announced they would be hiring 1300 new associates. On the same day they announced the completion of this initiative, they also warned that baby formula could be contaminated.

The following was from the FDA April 30th press release which also corresponded with the Salmonella Saintpaul outbreak which ended up sickening over 1400 people. In fiscal year 2008 alone, the FDA is looking to fill more than 600 new positions and to backfill over 700 others to implement the FDA Amendments Act of 2007, the Food Protection Plan and the Import Safety Action Plan. That’s nearly triple the number of people hired from 2005-2007.

The question begging to be asked, is with the hiring of thirteen hundred individuals completed which includes biologists, chemists, medical officers, mathematical statisticians and investigators, are we safer? Additionally, is our supply chain any more traceable? It appears we are making progress.

It appears as though we are reacting more quickly also. The bay formula problem is not with products manufactured in the United States. The problem is with formula made in China not for sale in the U.S. which contains melamine the same contaminant that was responsible for poisoning and killing thousands of dogs in the United States during 2007. The fear is that the products could make their way into Asian neighborhood markets illegally. The FDA has already contacted all U.S. manufacturers and is working with state and local health agencies to notify local Chinese communities. This is a good job by an over worked agency.

We continue to believe that the best possible protection for consumers and risk mitigation for retailers is a traceable supplier database that supports more than one forward one back tracking.

We look forward to your comments.

I speak on a regular basis about safety in the supply chain. Some think it is just a hook. It is in fact a passion. Today I was discussing the ramifications of EN 13869 with a retailer. This safety standard applies to those small cigarette lighters sold at the point of purchase at many supermarkets, drug stores and convenience stores. This standard which is also related to ISO 9000 quality standards is known as BS EN 13869 and covers Lighters, Child-resistance for lighters, and Safety requirements and test methods.

Our discussion went on to cover where in fact the lighters ultimately come from, whether they are impacted by the resin market, the use of logo?s and branding restrictions related to those logo?s such as those of sport teams and the risk of the retailers logo also being placed on these lighters. Too often, these concerns are not considered when purchasing such a small resale product. Later in the day I went for my daily run, during which I passed a blue lighter lying on the side of the road. I wondered if this lighter still worked, or if it had a retailer?s logo on it? What if it has been damaged? What if a child picks it up and is injured by it? Who is liable? The only traceable element is the retailer?s logo. This certainly provides some food for thought when procuring these products. This author would make sure retailers request and retain all safety certifications of your supplier on file and additionally provide several levels of traceability as well.

If that does not inspire you the keep better records as regards safety, just check today?s release from the FDA. West Virginia Livestock Owner Sentenced in Criminal and Civil Contempt Case. The U.S. Food and Drug Administration announced today that a West Virginia cattle dealer has been sentenced to six months probation for refusing to obey court orders in 2006 and 2008 that prohibited her from introducing animals into the food supply until the FDA had approved her record-keeping system. The FDA initiated the case after illegal levels of drug residue were found repeatedly in calves that Shirley A. Rhodes of Sandyville sold for use as human food.

The fact is that safety is important. It needs to be included in all sourcing decisions and traceable information kept on file. Consumers deserve no less and quality suppliers owe it to their retailer partners.

Safety is our passion. We look forward to your comments.

I am in Boston this week. I always enjoy my trips here because I grew up here and still think of it as home. Never mind that I?m also an avid Boston sports fan.

The other thing I like to do when I?m in town in addition to reading the local news papers, is to visit local retail locations. One of the first accounts assigned to me when I was a young salesperson at NCR was Star Market. They were a division of Jewel Companies at that time and Peter Lynch now the CEO of Winn Dixie was responsible for operations. Star had a very interesting store that actually sat on top of the highway spanning both east and west bound lanes. I often wondered what health effects that might have on the workers exposed to the fumes of the very heavy traffic below.

Today when reading the Boston Globe the business section had an article by Erin Ailworth titled Eco-friendly energy to power revamped Star Market. Based on my post from yesterday titled How can the procurement department lead the way in company green initiatives, this article caught my attention.

The article goes on to indicate that the store located on Route 9 in Newton Massachusetts will be powered with an energy-saving fuel cell that runs on natural gas, use an innovative refrigeration system that reduces carbon emissions, and be illuminated with light-emitting diodes that last up to 10 years. The best part of the entire article was the third paragraph. ?What it allows us to do is save energy and save money, and it allows us to show our commitment to environmental stewardship,? said Holly Angell, director of engineering for parent company Supervalu. This is an example of corporate social responsibility at its best. And, all of these products had to be acquired through the procurement department. I?ll bet if I were to ask that the construction company is also LEEDS certified.

Congratulations to Supervalu, Star Market and the Boston Globe for reporting on this subject on the front page of their business section. This is an example of paying it forward. Keep up the great work.

We look forward to your comments.