For those that believe supply chain risk is limited to sectors like automotive where many suppliers are increasingly moving into crisis mode, think again. Supply chain risk even impacts end consumers. Consider this article which describes how fake Lipitor is entering the UK supply chain, reaching end consumers at the pharmacy counter. If you think this problem is isolated, guess again. Lipitor, a widely popular cholesterol lowering drug produced by Pfizer, has faced counterfeiting before. Consider how "last year Pfizer said it was forced into a mass recall of 120,000 packs of Lipitor as 73 packs of counterfeit drug seized -- after already entering the supply chain -- carried the same batch number as the genuine batch." One of the problems with counterfeiting, the article cites, is that "parallel trade, whereby drugs are shipped around Europe to exploit price differences, also makes detecting counterfeits a major challenge."
When it comes to supply risk management, few organizations think beyond the cost of supply disruptions when suppliers go bankrupt or face performance challenges. But the reality is that supply risk impacts the entire supply chain and fake products, whether they're produced by your suppliers in a "third shift" or copied offshore by a producer who specializes in knock-offs, can wreck havoc with the top line by damaging brands and harming sales. Granted, most companies would do well to address supplier financial and operational risk first, but it's no longer enough to just consider the harm that identifiable sources can bring. Only by maintaining absolute visibility across the integrated supply chain -- including the delivery, logistics and warehousing functions -- can companies truly hope to conquer downstream supply risk. Jason Busch