Calculate cost vs. risk The issue of cost is, of course, considerable in calculating supply chain risk and vulnerability. The conundrum facing manufacturers regarding cost is two-edged: Every time you audit the product, it creates friction in the supply chain.
Calculate cost vs. risk
The issue of cost is, of course, considerable in calculating supply chain risk and vulnerability. The conundrum facing manufacturers regarding cost is two-edged: Every time you audit the product, it creates friction in the supply chain.
And then there's the consumer to consider, especially when it comes to consumables and expensive goods that have a cachet. Supply chain advances are "changing in the food industry, any place where the product touches or goes into the human body, because of the health risk," says Accenture's Alvarenga. He believes that for certain products, the day will come when the consumer will be able to scan smart packaging using a smartphone camera and see exactly where a product came from.
The question is, will consumers pay more for a higher degree of integrity or a more ethical supply chain? That question has yet to be answered.
With the right technology, you can substitute information for inventory. Glen Goldbach, PricewaterhouseCoopers
In other areas, several sources say, costs are coming down. RFID chips are cheaper (though antennas aren't). XML is making electronic data interchange (EDI) feeds easier to integrate, and making data connections less onerous. Sensors are also cheaper and easier to incorporate; as sensors become inexpensive enough to incorporate in packaging, pallets, trailers and warehouses, commercial shippers like FedEx, which recently debuted its new Senseaware technology, are able to easily identify exactly where their packages are in transit.
Thaker points to specific technologies bringing costs down. "In the old days, we would have someone hand-carry a live organ to the transplant destination to ensure it was properly handled. But now you can buy temperature control sensors for $100 that keep the organ at the proper temperature when it's shipped as cargo."
PricewaterhouseCoopers' Goldbach also sees value in supply chain technology. "Companies can use it to reduce inventory in order to save capital. That's especially true for industries such as technology, where products have a short lifecycle and you don't want to be caught with inventory whose value goes to zero quickly. With the right technology, you can now substitute information for inventory."
Frequent contributor Howard Baldwin last wrote for Computerworld on email addiction in the enterprise..
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This story, "Supply chain 2013: Stop playing whack-a-mole with security threats" was originally published by Computerworld.