Last Wednesday, October 10th, Toyota announced that 7.43 million cars, trucks, and sports utility vehicles would be recalled to correct a faulty power window switch that can start fires, the Associated Press reports. This is the largest recall in Toyota's 75-year history. More than a dozen models produced from 2005 to 2010 are affected, including the top-selling Camry. The recall serves to undermine the automaker’s efforts to come back from recent natural disasters and other safety problems, including the seven million vehicles recalled about two years ago for problems with unintended acceleration. Measuring Supply Chain Emissions Makes Business Sense
The issue centers on the power window switch located inside the driver’s door. According to Toyota, lubrication was applied unevenly during production, and friction, smoke, and fire can result when used. Dealers will apply special grease to correct the problem and, in some cases, replace switches and circuit boards. While no deaths are reported, 161 fires and nine injuries have been recorded in US safety filings.
Many are questioning whether Toyota has solved the quality and safety issues that troubled the company in 2009 and 2010. The recalls also have the potential to jeopardize the automaker’s rebound from the Japanese earthquake and tsunami in 2011, which crippled some factories and shorted inventories. However, Mike Jackson, director of American production forecasting at consulting firm IHS Automotive, says Toyota is a brand that engenders a great deal of loyalty. Jackson says the recall “is not going to be the primary point of consideration for most consumers out there."
Successful companies seek to reduce risks and maximize opportunities in their global supply chains. Now, Forbes contributor Manish Bapna writes, large, multinational companies including Honda, BASF, and SAP are even taking advantage of measuring greenhouse gases throughout their value chains__not only to promote the environment, but because it is good for their reputations, risk profiles, and opportunities for innovation. Compounding Pharmacies Blamed in Meningitis Outbreak
Many other multinationals are heading down this path. According to a Carbon Disclosure Project survey, 70 percent of top global companies measured value chain emissions in 2011, up from about 50 percent in 2010. One motivator for this behavior is customer demands. Retail and corporate customers increasingly demand to see evidence that manufacturers apply sustainability principles to the products they produce, as well as their entire supply chains.
By examining environmental impacts at suppliers, companies also increase their awareness of the potential of environmental risks, including water scarcity and climate change. More than four-fifths of survey respondents indicated that climate change presents an actual risk to the business, with 37 percent considering it a “real and present danger.”
Finally, measuring emissions in the value chain can lead to efficiency boosts and cost reductions. Gaining an awareness of supply chain hotspots helps focus efforts for better product design and other innovation opportunities.
A growing number of people believe that compounding pharmacies__specialized locations where drugs are mixed, processed, or otherwise reformulated before being dispensed__are unsafe and require increased regulation, USA Today reports. In a high-profile example, a facility called the New England Compounding Center is under fire for manufacturing large quantities of medicine without prescriptions, and a contaminated steroid it produced may be linked to a deadly 11-state meningitis outbreak.
Compounding pharmacies play an essential role in customizing drug mixtures and providing hard-to-find compounds to customers. In recent years, however, the number of these companies has grown considerably, and some have grown into de facto manufacturers, producing and shipping thousands of medications throughout the country. Compounding pharmacies are not subject to the same rigorous safety requirements as large-scale drug manufacturers. There also is a question of what body regulates them in the United States, with responsibility falling to both the Food and Drug Administration (FDA) and state pharmacy boards.
The FDA has sent more than 40 warning letters to compounding pharmacies since 2001, with violations including sanitation and failure to stop the manufacture and sale of dangerous or ineffective drugs. In that same period, more than two dozen deaths have been linked to compounding pharmacies. Yet, demand for compounded drugs is growing, says Eric Kastango, pharmacist at Clinical IQ, a consulting and training firm for compounding pharmacies. “This has been a concern for the last 20 years, and it’s only going to get worse.”
APICS Extra Live: Supply Chain Sustainability: Strategic Implications for the Consumer Goods Industry
Marco Ugarte, Ph.D., CPIM, CSCP, CQIA, Research & Business Development Manager, The Sustainability Consortium
December 6, 2012
1:00 p.m.–2:00 p.m. CT
Click here to register.
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Discover the new 2012 APICS Supply Chain Risk and Reward Folio
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APICS Supply Chain Sustainability Folio: Uncovering the Triple Bottom Line
Supply chain and operations management professionals are increasingly called on to carry the torch of innovation to reduce costs, demands on resources, and waste; while increasing the reuse of existing assets, and enabling lean operations. Employing sustainable practices is critical to meeting these business needs.
APICS Supply Chain Strategy Folio: Make the Most of Supply Chain Strategy
Understand challenges and identify areas where senior management and operations management can work together to maximize the effectiveness of your supply chain strategy. Access this APICS folio to delve into critical supply chain functions and tasks that may not be effectively supporting your supply chain strategy.
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Mitigate and anticipate supply chain risks at your organization—from rising and falling demand to natural disasters, market uncertainty, and varying levels of trust among supply chain partners. Purchase this APICS folio to identify tools to deal with risk at your organization.
APICS S&OP Folio: How to Be an S&OP Champion
Predicting the future generally is thought impossible; yet, S&OP users seek to do just that by strategically directing businesses to achieve competitive advantage. Purchase this APICS folio to understand how you can enable your organization’s bottom-line effectiveness with S&OP.
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Predicting the future generally is thought impossible; yet, S&OP users seek to do just that by strategically directing businesses to achieve competitive advantage, and—more and more—are expected to do so to enable their employers' bottom line profitability.
Supply chain professionals: Take the APICS CSCP Learning System Free Demo today
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APICS CPIM exam study options
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