6 steps for managing the supply chain of custody
By Bill Michels with Jim Kiser
Two people in the northeast U.S. died recently from E. coli attacks, probably related to contaminated ground beef. Meanwhile, in a separate report the New York Times says there are loopholes that make it impossible to trace every E. coli contamination back through all the processing steps before it reaches the frozen food aisle.
This is what you call a “chain of custody” issue in the supply chain.
Chain of custody is the unbroken path a product takes from raw material through production to the end customer. Many complex supply chains are designed with more than 100 links, complicated even more by companies that are outsourcing manufacturing to other countries.
Federal regulations spell out the chain of custody requirements in the pharmaceutical and aerospace industries, because a problem can have a huge impact on public safety. However, most other industries don’t operate with established standards, although recent concern about toxic gypsum wallboard, lead-contaminated toys, some food products and other consumer items is pushing chain of custody into essentially every category of consumer product.
Without government-set standards, industry associations are trying to help companies establish adequate standards that are appropriate to the risks. The Forest Stewardship Council and the Marine Stewardship Council have certificates for sustainable practices that depend on solid chain of custody documentation. From those and other industries, we can outline a six-step process for managing the chain of custody that’s a good start for any company.
Step 1: Develop key control points.
Review the manufacturing process. Understand each production stage where products are joined together. Identify key control points where there is a combination of products.
Step 2: Identify material with a uniform marking system.
Identify all components, both certified and non-certified. The marking system must be clear throughout every process from raw material to delivered product to a consumer.
Step 3: Use a standard system to keep records and documents.
Maintain detailed records down to the lot, batch, minute and second of the manufacturing process.
Step 4: Assign responsibilities, accountability and authority with assurances of compliance.
Organizations can expect large investments in systems and people with the responsibilities, accountability and authority for the design and implementation of chain of custody.
Step 5: Set up rigorous internal and external audits to drive compliance and process integrity.
Chain of custody is a form of insurance - most of the time the systems won’t be needed. Furthermore, there are no regulatory pressures for compliance. That increases the chances that procedures won’t always be followed rigorously. Mechanisms have to be put in place to keep the chain of custody consistently intact, so it works when it has to.
Step 6: Integrate chain of custody through the supply chain.
Supply managers will have the burden to integrate internal chain of custody with supplies coming upstream to them and the requirements of demanding customers.
None of this is easy or cheap, but the pressure for it is unrelenting. When regulations do come, companies will be required to invest significantly in people and systems to implement and audit compliance for many levels of components.
Smart companies are not waiting for regulations to come, they are planning and implementing tighter chain of custody right now.
Bill Michels is CEO, and Jim Kiser is VP,Operations of ADR North America LLC, Ann Arbor, Michigan, a consulting firm specializing in global supply chain management.