Comments on: Supply Risk and its Potential to Negatively Impact Revenue https://cporising.com/2010/10/20/supply-risk-and-its-potential-to-negatively-impact-revenue/?utm_source=rss&utm_medium=rss&utm_campaign=supply-risk-and-its-potential-to-negatively-impact-revenue Analyst-led research and intelligence for the procurement community. Sat, 13 Jul 2024 01:06:51 +0000 hourly 1 By: Andrew Bartolini https://cporising.com/2010/10/20/supply-risk-and-its-potential-to-negatively-impact-revenue/comment-page-1/#comment-134 Thu, 28 Oct 2010 07:26:14 +0000 https://cporising.com/?p=2819#comment-134 Wow! Thanks for sharing this information. My head is spinning…. It does make me wonder if this is a larger issue than a few batches of tainted wood pallets. Very complex!

]]> By: s. drake https://cporising.com/2010/10/20/supply-risk-and-its-potential-to-negatively-impact-revenue/comment-page-1/#comment-133 Wed, 27 Oct 2010 17:10:42 +0000 https://cporising.com/?p=2819#comment-133 Andrew, just a couple things to comment on. The supply risk impacts not only revenue but for a small organization it may mean the demise of the product or the company itself. A fair number of small entities I deal with have limited resources at product launch, feel the need to partner/contract/collaborate to manufacture, package and distribute and build market share as soon a possible. This usually leads to false risk assumptions which delays or even negates contingency planning. An event such as the TBA issue falls into the company regulatory cracks between a minor safety/moderate nuisance issue for a isolated event. The FDA has taken the stance that the issue is a GMP issue-adulterated product-hence the recall action. The TBA issue in the wine industry has been once you have it in you product and facility it is extremely hard to get rid of it.

Larger companies can survive the bump by quickly investigating the problem while concurrently moving to existing “clean” back-up providers to mitigate the impact. A smaller company without planning for the recall and delay of manufacturing of a single sourced product could find the future bleak. Not able to respond quickly or effectively forces the sales to stop, market share erosion, and partners relying on product for their bottom line will extract penalties for non-delivery. All of a sudden the few million to plan for a scenario such as this seem miniscule when compared to the cost and damages.

Regarding the wood pallet and the TBA issue, this has illuminated a huge gap in the supply chain. TBA is a substance that is detectable in minute quantities (ppb levels)by the human senses. Toxicity of the chemical is not known, exposure to TBA can make you ill (nausea, vomiting, diarrhea)but the effects are not long lasting. It is an aggressive volatile material that can contaminate wood, cork, cardboard, plastics, drywall, concrete and a variety of other materials. Removal of TBA is difficult. Currently manufacturers are accepting and transporting materials only on IPPS certified heat treated pallets to assure no chemical treatment of the palletts. But contamination can occur from direct or indirect contact with TBA or materials contaminated with TBA. This could be a nightmare in that if the supply chain from pallets to product containers to manufacturing facilities to shipping containers to distribution warehouses are contaminated at detectable levels. If you remember all of the recalled products are connected to Puerto Rico (contaminated bottles from PR manufacturers used at PR contract packagers)but in the latest recall from Pfizer it was indicated the the contamination was related to packaging materials and containers (purchased from a PR manufacturer) and there is indication in the latest JNJ recall that the recalled product was manufactured in the US. TBA may already be in the US supply chain… and what is the risk now to other commodities? This being a hot button issue with the FDA we will be hearing about more recalls from other than the current TBA victims.

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