Apply a Profit Imperative to Traceability Regulations

profit_imperitive_traceabilityWhat follows is a transcript of a podcast recently recorded [hear the podcast recording].

Today we will be talking about The Profit Imperative of New Approaches to Traceability Regulations. I am Debra Gray, and would like to introduce Rick Gallisa, Industry Director for DELMIA Apriso and Julie Fraser, Principal at Iyno Advisors. So, let’s get started. I’ll kick it off with a question to Rick.


Debra: Regulated industries have always had to provide traceability and genealogy. Why is this issue pressing now?

Rick: You’re absolutely right Debra; it always has been a pressing issue. The reason it’s becoming a more pressing issue today is with regards to mandates coming out of regulatory agencies. If you look at the Life Sciences industry, you have the ePedigree initiative around Pharmaceutical and Biotech. You have the Unique Device Identifier initiatives in Medical Device manufacturing. And, oh by the way, both of those have many counterparts in many parts of the world with different governments. In Food & Beverage, you have the Food Modernization Act that was put into law in 2011. And, even in Aerospace & Defense there’s been a spike of counterfeits that have been found in highly sophisticated defense and intelligence systems. All of these things have recently escalated and heightened the sensitivity to counterfeits and the need for higher level of traceability for consumer protection and defense. Those are really the reasons why it’s taking off now.

Julie: Yes, governments have sprung into action with many new regulations, and the thing that you hinted at is that each government takes its own action, so may have a slightly different mandate. Companies need to comply with each of these and “oh by the way,” they need to do it for every product or every variance of a product, so it’s an exponentially more complicated than if you think about just one product or one regulation. So, what’s really what’s been going on is that companies are complying with a lot of regulations for every single product.

Debra: No wonder companies are complaining about all these new regulations. Sounds like it will cost them a lot of money to comply.  How can companies understand that impact?

Julie: I recently wrote a paper explaining that traditional approaches to traceability can make you compliant but they are very, very inefficient. We advise people to consider not only the costs of these traditional ways of doing it, but also some of the soft costs and to go beyond looking at the really obvious costs and include some of the more hidden costs – there are a lot of them to managing quality and traceability and the soft cost of traceability failures are another thing to consider – they’re difficult to calculate but they are very real and really the failures in quality are the impetus behind the regulations.

Rick: At DELMIA Apriso, we saw this coming across these industries we’ve been discussing for the past several years and have developed some very robust solutions that help our customers with better traceability and genealogy tracking. Not just within their four walls of a given manufacturing site, but across their entire global manufacturing operations. And, increasingly more and more with their collaborative partners that these manufacturers are embracing to help with expanding their reach into new markets while lowering their costs. The supply chains are becoming increasingly more complex, which really adds to the challenge.

Julie: It is a huge challenge. Really, every company has a unique information technology landscape. So, companies need to do due-diligence. You really need to identify your systems of record and ask a realistic question: “Are they capable of handling traceability and containment as an end-to-end process?” In many cases, we suspect the answer won’t be “yes,” but you have to realize that profitability is going to be impacted both by the processes to comply with these mandates, and any failures that might result from a lack of traceability and containment.

Debra: Thanks Rick and Julie for sharing your views on why this issue is critical now.