Security breach

thoughts from the frontline
The news that horsemeat has
been found in beef products
has raised serious supply chain
issues for several supermarket
giants. Our experts give us their
thoughts from the frontline...
Hitesh Patel, partner in the
information protection and
business resilience practice,
KPMG, commented: “This situation
offers a stark illustration of the risk
of supply chain failure and should
serve as a large wake up call for all
organisations, not just those in the
food sector. Regardless of whether
horsemeat entered food products
through criminal activity, fraud or
mistaken contamination, this situation
starkly illustrates the importance of
robust counterparty due diligence for
organisations in today’s market and
poses some stark questions as to how
far down the chain those procedures
should go. A drive to cut costs through
the supply chain can have unintended
consequences. The unfolding situation
offers a clear warning to organisations
that they have a duty to assure their
supply chain for their end consumers.
At a time when trust – from
customers, regulators and government
– is an important issue across many
sectors, relinquishing control over
suppliers can have considerable
ramifications.”
Sue Clarke, senior information
management analyst at Ovum,
said: “Traceability in the food
industry has been in force in Europe
since 2005, and this has resulted in
much quicker, simpler, and cheaper
product recalls. Ensuring traceability
requires organisations to have
effective systems in place to trace
components back to previous stages in
the manufacturing process as well as
forwards to the next manufacturers in
the supply chain. The use of traceability
systems has allowed the affected
organisations and regulators to trace
the likely source of the contaminated
meat to Poland. However, the damage
to the companies affected has already
been done, the meat industry has been
discredited and the suppliers of the
meals have suffered brand damage,
and will inevitably suffer from loss of
sales.
Without the necessary systems in
place the situation would have been
much worse. Much of the information
relating to the manufacturing process
itself will be contained within an ERP
system, but supporting documentation
may be stored in an ECM repository.
The benefit of a traceability and
product recall solution based on
an ECM system is that all of the
documentation received from other
organisations in the supply chain can be
stored in the repository. Scanning and
extraction can be automated using a
traceability and product recall solution
from an ECM vendor. It is claimed
there was criminal involvement in the
horsemeat scandal, but the ability to
trace food components back to their
origins through the use of software
systems means criminals should be
apprehended much quicker.”
opinion
Mikko Soirola, VP at Liaison
Technologies, added: “The
transparency of supply chain
processes provides additional means
to take corrective measures while the
process is still active. It also enables
retrospective audits with all the
information available, e.g. in cases
where batches of goods need to be
traced and withdrawn from the market
for safety, health or other reasons,
allowing damage to be limited.
Alternatively, having a false
certification would provide
commercial/contractual means for
the buying companies to sanction the
suppliers, not to mention that falsifying
such records is likely a criminal offence.
That would put major pressure on
ensuring the right information is
provided for each delivery, reducing
the risk of such mishaps occurring
to almost nil. In today’s economy,
investing the time and money into
ensuring a fully integrated supply
chain will prevent such high-profile and
reputation destroying incidences from
arising and will in turn prevent any
damage to organisations, such as Tesco
and Iceland. The certification of the
origin of the ingredients should have
been a mandatory part of the supply
chain process.”
opinion
RS
February - March 2013 RS 39