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HP Case Study: GS1 - Building Trust in the Global Supply Chain

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In this case study, Business Value Exchange looks at how supply chain nonprofit GS1 worked with HP Enterprise Services to help move from a slow and disjointed manual recall process to a standardised, …

In this case study, Business Value Exchange looks at how supply chain nonprofit GS1 worked with HP Enterprise Services to help move from a slow and disjointed manual recall process to a standardised, cloud-based solution for its members.

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  • 1. Business Value Exchange presents HP Enterprise Services case studies  Building Trust in the Global Supply Chain
  • 2. Business Value Exchange presents HP Enterprise Services case studies  Supply chain management is not just about getting the right products to the right place at the right time. With roughly 48 million cases of food borne illnesses every year, ensuring the quality of food on the market is a top public safety priority. In this case study, Business Value Exchange looks at how supply chain nonprofit GS1 worked with HP Enterprise Services to help move from a slow and disjointed manual recall process to a standardised, cloud-based solution for its members. Read on to find out how this change reduced product recall times and prevented contaminated and unsafe products from causing large-scale public health problems. 2
  • 3. Business Value Exchange presents HP Enterprise Services case studies  The challenge These days, identifying contamination in food and finding out where it occurred is a quick process for scientists. With greater government regulation and legal oversight too, the need and expectation to act quickly and decisively is greater than ever. But recalling a product can be a complicated and slow process. Different retailers, suppliers, manufacturers and other links in the supply chain often favour different technologies, with differences in the quality of information supplied at various stages, and with a variety of regional regulations to comply with.. AMR Research Inc., part of Gartner Research, found that the average time between detecting a problem and acting on it was 18 days, in the North American food industry. It then took another 42 days to actually complete the recall, meaning that a dangerous product could often stay in circulation for 60 days. Not only that, but AMR also discovered that 43% of products could be traced by manufacturers but not actually located. Not only is this a danger to the public, but it also has a knock on effect on brand reputation and stock value. Within 24 to 48 hours, stock value could fall by 2% for companies that do not have an adequate recall process in place, and up to as high as 20% after 14 days, in extreme circumstances. 3
  • 4. Business Value Exchange presents HP Enterprise Services case studies  “In 2010, approximately 3,000 people died in the USA from eating contaminated food. With around 48 million cases of food borne illnesses and 150,000 hospital admissions per year and an annual cost in excess of $100 billion for foodborne illnesses, the industry faced a significant challenge; how to enhance traceability and improve product recall efficiency whilst satisfying regulatory requirements.” – John Keogh Global director, product and consumer safety, GS1 Global Office The challenge: Speed up recalls 4
  • 5. Business Value Exchange presents HP Enterprise Services case studies  Accounting for difference As a not-for-profit, non-partisan body operating across 150 countries and a membership totalling 1.5 million organisations, there is huge variation in capabilities, infrastructure and operating environments. Firstly, debates about which technology solution to use could get in the way. Each organisation has its own preferences and wants the solution that is simplest for its teams to implement. This can also lead to concerns about the accuracy and completeness of the information passed along during the recall process. Secondly, there are problems with compliance. Laws and regulations about food quality, safety and recall differ between countries and regions, causing another headache for any business trying to instigate a worldwide recall. It also makes it tough to standardise forms, as they must meet government requirements internationally. There was also a practicality problem a large scale IT project, with worldwide implications, could mean a lot of money upfront on obtaining hardware and licenses. As a non-profit body, this presented a significant financial challenge for GS1. The challenge: Standardise the process 5
  • 6. Business Value Exchange presents HP Enterprise Services case studies  The solution Meeting all of these requirements was a challenge, but a solution was found in taking a cloud-based approach. The system was successfully piloted in the Canadian food industry, from the growers and manufacturers, all the way along the chain to retailers. As a secure and compliant solution hosted in a central location, the use of cloud services eliminated the problems caused by the diversity of systems. Instead, a web-based, uniform system could be accessed remotely by GS1 members, simplifying and speeding up the product recall process. The project was a resounding success. The entire end-to-end recall process was reduced from 42 days to just one hour. On top of that, the new notification tool, based on GS1 standards, was able to reduce ambiguity in the process and improve accuracy when identifying and tracing contaminated products. Finally, with the system built to comply with the law, risk was feduced for all the businesses involved. There was a cost benefit too. GS1 were able to move away from a CAPEX model to one based on regular OPEX costs instead. For a non-profit organisation that is not an IT specialist, paying for computing as a managed utility suits its needs perfectly and provides a predictable monthly accounting cost. 6
  • 7. Business Value Exchange presents HP Enterprise Services case studies  Cloud: A standardised solution By providing a neutral platform, putting standards into effect across entire industries was made much easier. A standardised form for the recall process was developed and all stakeholders were quick to agree on what it needed to include, helping to build trust and improve trading relationships. Not only that, but it was flexible enough to accommodate differences between regions - 90% of the form stayed the same, but the rest could have small alterations made to it in order to ensure compliance with a variety of legal and regulatory frameworks. The final product was easy to use. Brand managers simply needed to log on to a self-service web portal, which could be accessed on demand. As a Software-as-a-Service (SaaS) solution, extra resources could be provided as needed, scaling capacity up or down to cope with demand. Global deployment The success of the pilot in the Canadian food industry spurred GS1 to roll out the service to other industries and other countries. In Canada, the solution was quickly extended to cover the merchandise sector, with plans to move it into the healthcare and pharmaceutical sectors too. A number of businesses in Australia are using the service too, including the grocery, merchandise and liquor industries. In India, a pilot was completed in the food industry in 2012, with the input of representatives from the industry and from government. Following successes in these countries, the service has recently been piloted in New Zealand, Germany, Poland, South Africa, Mexico and Chile. 7
  • 8. Business Value Exchange presents HP Enterprise Services case studies  “Global supply chain standards are the foundation to effective product recall. GS1 global standards are used by millions of companies worldwide to enhance the safety, security and efficiency of their supply chains. By integrating GS1 standards with HP’s cloud computing platform, we’re reinventing the way recall information is exchanged between businesses and further supporting industry efforts to improve consumer safety.” – Arthur Smith President and chief executive officer, GS1 Canada The solution: Standardised recall tools 8
  • 9. Business Value Exchange presents HP Enterprise Services case studies  Our new case study series looks at the real benefits that organisations have gained from modernising their IT systems - not just estimates and predictions. Accurate planning and careful risk assessment need real data, not guesswork. Your organisation can benefit from the example of others. That’s why we’ve provided case studies from a cross-section of industries and sectors, from supply chain management and high fashion, to benefit provision and education. Take a look at more of our resources on the Business Value Exchange website. Businessvalueexchange.com is brought to you by HP Enterprise Services, in partnership with CIO Magazine and IDG. Copyright © 2013 HP

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