Companies struggle to capitalize on mobile popularity

on Saturday, August 29, 2015

Companies struggle to capitalize on mobile popularity

Technology is always evolving. It must be, to keep up with an on-the-go, fast-paced society. Because of this, companies continue to upgrade their devices to provide the best products to today's consumers. This is particularly true for phones. People have had the ability to talk without a landline for decades, and now they expect to be able to do more. Smartphones satisfy that desire. However, the growth in popularity of the devices has added pressure for e-commerce businesses to meet demand, and the supply chain is struggling to earn revenue.

The popularity of mobility
Cellphones today come with so many abilities that you don't even need a desktop computer or landline phone to go online or communicate with people. You'll be able to text, make calls, look up the answer to a question and view your social media pages all from your mobile device. If it weren't for the size of the screen, you wouldn't need other technology to do the majority of other things.

Many people are seeing the benefits of this. According to Trinity Digital Marketing, there are approximately 6 billion mobile subscribers, and one in seven searches is now done from a mobile device as opposed to a desktop computer. With these numbers, companies must take advantage of smartphones' abilities to capitalize on mobile usage.

Struggle to make ends meet
Unfortunately, making revenue isn't as easy as it sounds. According to the Pew Research Center, mobile spending makes up 37 percent of the $50.7 billion-worth of digital advertisements. However, those ads aren't bringing in the money that businesses had hoped, considering the popularity of mobile devices. Only 10 percent of The New York Times' digital ad revenue comes from mobile, Advertising Age reported.

This can come from a variety of issues. There isn't much room to display content that is both visually appealing and informational like there is on a larger screen, and publishers and marketers may not fully understand the strategy that is needed to earn a return on their investment, the source explained. They've stuck to desktop methods rather than adjusting their approach.

"It's still largely unchartered territory," Rachel Pasqua, lead of mobile and emerging technologies at MEC Global, told Advertising Age. "When you have uncharted territory, the knee jerk is to go to the big player everyone is familiar with."

To make all parts of the supply chain financially stable and beneficial, companies will need to rework their marketing strategies for mobile devices.


Negotiating Vendor Contracts: Best Practice Tips

on Friday, August 28, 2015

Oftentimes, the contracting process becomes an afterthought for procurement professionals. So much time goes into developing and executing sourcing events, that when the business is finally awarded to a winning vendor it may seem like the job is done. While selecting a supplier to partner with is a certainly an achievement to be celebrated, the supplier relationship cannot truly begin until a contract is signed. And in order to make sure that the relationship is long-lived and effective, the contact should be fair for both the vendor and the customer. Below are some tips that can help you get through the contracting process as quickly as possible, while also getting the most beneficial terms for your company:

  • Always use your own contract draft. Suppliers will try to convince you that using their paper is more beneficial, as they have included certain terms and definitions that only apply to their services. While this may be true in some instances, it is always possible to include some of this supplier suggested language in your own contract draft via the red-line process. However, using your own paper helps ensure that you stay in control of the negotiating process.

  • Whenever possible, give vendors the opportunity to review and comment on your contract draft throughout the evaluation process (i.e. during the RFP process). This way, if you have two suppliers with identical capabilities and pricing proposals, but one supplier indicated that they would require extensive changes to your contract draft while another indicated that their required changes would be minimal, you can go with the one you know will lead to a quicker contract negotiation process.

  • Identify the internal team that will need to be involved in the contract negotiation process. The procurement and legal teams will typically always be involved, but depending on the complexity of the agreement you may also need input from the business stakeholders, the insurance department, etc. Identifying all of the stakeholders ahead of time will help ensure that you will not miss anything throughout the process.

  • Identify any points or terms that are must-haves for your company and any that are only nice-to-haves. This way, if you notice that a supplier does not want to accept some of your nice-to-have terms, you can use that as leverage to ensure that you are able to get all of you must-haves.

  • Make sure that your team and the supplier always track their changes via the red-line process whenever making changes to the agreement document. If one party fails to track their changes for even one version, it could result in having to restart the contract negotiation process to ensure that no not-agreed upon changes accidentally made their way into the final version of the agreement.

  • Remember to be professional and fair. Although your instinct may be to want to come out of the negotiating process without any changes to your contract draft, the reality is that because most drafts are very standard, some changes will be required to address specific aspects of a supplier’s service offering. In order to maintain a long term on-going relationship, both sides should see the contract as fair and conducive to the future growth of their respective companies.

Although the above list is certainly not a comprehensive list of everything you need to think about during the contract negotiation process, it should provide a good framework for the negotiating process. Neglecting some of the above ideas may lead to issues in the day-to-day relationship with your vendor, and eventually a combative renegotiation or even contract termination. 

Source One Round Up! August 28, 2015


Source One Round Up: August 28,2015 

Here's a look at where Source One experts have been featured this week!


Onboarding a new marketing agency to your organization can be both exciting and challenging. This week, Source One Analyst Liz Skipor shares her marketing strategic sourcing insight to help your new marketing agency hit the ground running. She explains how to get the agency up to speed with your organization's culture and expectations to establish an effective vendor relationship early. 

Source One's Senior Project Manager and Latin America Liaison Diego de La Garza shares his years of nearshoring expertise to help shed light on the complexities and advantages of nearshoring. In this podcast, De la Garza explains why the trend has taken off and how companies can fully benefit by moving their supply chain closer to home. 


NASA plans interplanetary mission to Mars


NASA plans interplanetary mission to Mars

When Mark Watney was stranded on Mars, he never thought he'd want to return. He encountered a multitude of problems in his 562 solar days - or 687 Earth days - on the planet. From separating hydrogen and oxygen to nearly running out of food, the narrator of Andy Weir's  novel"The Martian" had his share of obstacles. He didn't have much say in the matter when he found himself stuck on Mars, and he probably wouldn't want others in the same situation.

However, Watney may have found that other people aren't as reluctant to visit the planet as he is. Starting in the 2020s, NASA will send volunteers on a trip to the red planet, which may require some updates and additions to the supply chain.

NASA has eyes on interplanetary travel
There is a wealth of knowledge to be gained through space exploration. However, Earthlings haven't had the technology to allow them to travel into the depths of space - until now. NASA is in the process of building and testing Orion, the first spacecraft made for human occupancy and long-distance traveling since the Apollo missions. This will open up new doors for astronauts to explore much further than the Moon.

In 2021, Orion's crew will set off on its first mission to collect an asteroid and bring it into the Moon's orbit. This will not only provide further insight into these masses, but will also serve as an evaluation for the capabilities of the spacecraft. This will allow NASA's team to test the durability, electrical systems and safety to ensure that a longer journey will go smoothly.

NASA hopes to send astronauts to Mars in the next 20 years. At the moment, there are rovers and robots exploring the red planet, gathering information and searching for signs of life. This will help NASA plan for maintaining human life for an extended time on Mars.

Kinks in the supply chain need to be fixed
Unfortunately, an extended stay in space comes with its problems. Other planets do not have the atmosphere that Earth does, whichmay affect the health of astronauts. According to EuroNews, being in zero gravity and having contact with radiation reduces muscle strength and bone calcium. Just one year on the International Space Station can leave astronauts weak. Several years on Mars may be detrimental to their health. NASA will need to work out a plan to ensure these space voyagers can maintain their endurance while on the planet.

Space travel is also costly. Building the launcher and the spacecraft is just the start of the bill. NASA also sends equipment and cargo ahead of time to make sure astronauts have what they need while not on Earth. All of these supplies add up to excessive amounts for the agency. However, Ontario-based Thoth Technology may have a way to reduce at least some of the costs.

The company has received a patent for a space elevator, which will be used for launching payloads, scientific purposes, intergalactic communication and tourism, Agence France-Presse explained. The tower would allow spacecraft to be launched from the stratosphere instead of the ground, which may reduce costs by approximately 33 percent. This would eliminate drag and require less fuel, both of which add expenses and obstacles in space travel.

With blastoff to Mars set for sometime in the 2030s, NASA has time to work out any potential problems. Astronauts will need food, water, oxygen, shelter and a way to communicate to be able to survive on the red planet, and global sourcing will be futile for this mission. The supply chain must be able to account for interplanetary travel so that Mars' colonists don't end up in a Mark Watney situation.


Car recalls are driving customers away


Car recalls are driving customers away

Unless you live in a city, you probably need a car to get from point A to point B. Unfortunately, ownership comes with added expenses. You'll not only have to pay for a car, but you'll need to take care of gas, registration and repairs. In many places, gas prices are the most reasonable they've been in years. However, repairs are another story. This year's vehicle recalls have significantly reduced customer satisfaction with the automotive industry.

Customer satisfaction decreases with recalls
Buying your first car comes with the thrill of being an independent and free person. You no longer have to borrow your parents' vehicles or get rides from friends. However, the excitement of that may decrease once you hear of the countless recalls that have occurred in the past year. The U.S. Department of Transportation's National Highway Traffic Safety Administration reported 47 recalls for faulty car seats, defective air bags, oil leaks and incorrect manufacturing since Aug. 1. In the first seven months of the year, nearly 35 million cars were recalled, the Wall Street Journal stated. While that is a decrease from 2014's 49 million vehicles during the same time period, the number still causes problems for many citizens and companies.

According to the 2015 American Consumer Satisfaction Index, there has been a 40-percent increase in recalls since the second quarter of the previous year. This has caused people to be dissatisfied with service and car quality. Even the costs of vehicles in today's society have created a chasm between auto manufacturers and consumers. Satisfaction has fallen 3.7 percent to 79 of 100 on the scale.

"While it is true that all cars are now much better than they were 10 to 20 years ago, it is alarming that so many of them have quality problems," Claes Fornell, ACSI chairman and founder, said. "The number of recalls is at an all-time high. This should not happen with modern manufacturing technology and has negative consequences for driver safety, costs and customer satisfaction."

Used cars may cause more problems than new ones
Unfortunately, new car owners aren't the only ones to face problems with recalls. People who own used vehicles may experience even more issues. Federal law only stops dealers from selling new cars that have been recalled, but pre-owned vehicles have no such regulation, Consumer Reports explained. Dealer-owned companies may ensure that there aren't any recalls prior to selling to consumers, but private lots aren't guaranteed to perform such research and tests, nor do they always provide accurate information.

This means consumers must remain informed about recalls to ensure their cars are safe to drive. Consumer Reports recommended checking government databases, visiting auto manufacturers' websites, contacting your local dealerships and going to CarFax for car histories.

To make sure cars are safe for consumers, manufacturers and government agencies need to work together to improve the supply chain. Rigorous tests should be performed both before and after vehicles hit the market to ensure the safety and durability of these cars. A new method must also be created for making used-car owners as knowledgeable as new vehicle purchasers.


Companies remove color additives from food

on Thursday, August 27, 2015

Companies remove color additives from food

As consumers, people have become accustomed to how their food looks and tastes. They expect the electrifying green color of Mountain Dew and the rainbow of shades in Trix cereal. However, many of these colors are about to change. To follow consumers' desire for "natural" products, food manufacturers have pledged to remove artificial coloring from their offerings, which may leave parts of the supply chain struggling.

What is the problem with color additives?
Striving to make their products more natural has proven to be a process for manufacturers. According to Wired magazine, there is no set definition for the term "natural" in regard to consumer-packaged goods, which can raise confusion. What may mean non-genetically modified organisms to some people could imply no chemicals to others. Even the U.S. Food and Drug Administration has been unable to properly define the term, and generally accepts foods that have no color additives, artificial flavoring or man-made substances as being worthy of the "natural" label.

Recently, many companies have adopted no artificial color as their definition of the term, and are attempting to dye their products with only naturally existing materials, much to the happiness of certain consumers and organizations. It is believed that certain color additives present a number of health issues for people who consume them, the Center for Science in the Public Interest reported. The FDA allows nine artificial colors to be used for food products - seven in food and two for casings. However, the CSPI found that many of these cause tumors, hyperactivity and hypersensitivity. While the FDA has not discovered a correlation between the dyes and health concerns, the organization is conducting further research because of the high amounts of additives people consume, according to a poster presentation from the agency.

How are manufacturers adhering to the desire for natural food?
Despite not having full evidence of color additives' health effects, food companies are working to remove the dyes from their products. The Scientific American reported that Kraft has pledged to remove yellow dyes from its macaroni and cheese by January 2016, and Medical Daily said Nestle will eliminate artificial coloring from its chocolate by the end of the year. 

However, keeping these products looking the same has proven to be an issue for food manufacturers, according to The Associated Press. Natural materials do not have the same dyeing capabilities as man-made additives, which means consumers may find their favorite foods have different appearances. Greens and blues have not been easy to replicate, and natural dyes for these colors have only been available since 2013. Because of this, General Mills' Trix cereal will appear without its blue and green pieces when the new version of the product is released later this year.

Dyes made from fruits, vegetables and spices may not be able to provide the same vivid colors that people have grown used to, but they will eliminate the potential for health concerns. However, they have caused problems to arise along the supply chain, The Associated Press explained. With natural dyes, purchasing and production costs increase. These materials also aren't as sustainable as their artificial counterparts. Fruits and vegetables can easily rot if not used within a certain time period, which adds more expenses for food manufacturers. These muted colors could also turn off some customers, as foods might not look as appealing as they once did. Companies will need to experiment with their formulas and dyeing methods to ensure they get the best and healthiest colors possible.


How to Jumpstart Your Procurement Operations

on Wednesday, August 26, 2015

Now more than ever, a competitive advantage is rooted in efficiency. Most would agree that businesses want to save the maximum amount of capital while also maintaining or increasing the value of their services. While simple cost reduction measures may work in the short-term, there is no solution more effective in the long-term greater than the establishment of a proficient, integrated, and empowered procurement department. Procurement might evoke a negative connotation that is associated with the siloed departments of a decade ago, but now more than ever, procurement finds itself squarely rooted in most business decisions.
Starting a procurement department that is integrated and efficient can be a daunting task. From hiring the appropriate individuals, to setting realistic goals, to internally (and externally) marketing the program, there is much work to be done. For a more in-depth look at the first part of the equation, talent in procurement, read: Attracting Talent to Procurement.


Health care benefits from low oil prices


Health care benefits from low oil prices

Health care requires an endless amount of supplies, from latex gloves to medications. However, full inventories of these products rely on the success of other industries. If a supplier struggles to meet demand, health care may face a similar setback in patient care. However, when business is good, doctors will notice the savings. Recently, procurement prices on plastic-based materials have decreased, meaning medical facilities are taking advantage of the lower costs of supplies.

Why is plastic inexpensive?
The price of oil has plummeted in the past two months. As of August, the cost of crude oil has fallen 4 percent, a six-year low since March 2009, according to The Associated Press. Since June, there has been nearly a $20 price difference, from $61.43 to $43.08. This is the lowest it's been since 2009. Because consumer demand has fallen and drilling has continued, there is a surplus of crude oil, which has led to lower prices for both oil and the products that require the resource. While this isn't good for oil companies, it is beneficial to airlines, shippers and other businesses.

The plastic industry is one of those areas that enjoy the low costs of oil. Plastic is made by combining natural gas, crude oil, salt, coal and cellulose, the Association of Plastics Manufacturers in Europe explained. This mixture produces hydrocarbon gas liquids, which are then used to make the material. Because the cost of oil has decreased, the price of plastic has also gone down.

How does this benefit health care?
The health care sector uses plastic materials in various medical devices, including pacemakers, gloves, syringes, bed pans and catheters. It even uses the product in its cafeteria trays and utensils. With the amount of plastic medical facilities need, the costs add up. Luckily for them, low oil prices lead to more inexpensive plastic products, which means fewer costs for hospitals and doctors' offices, Healthcare Finance News reported.

These facilities have contracts with the suppliers who provide them with their plastic products.Because if the decreased oil prices, supply chain executives have started to renegotiate the price of the materials to reflect the low costs, the source explained. To take advantage of these prices, hospital administration needs to track the progress of the supply chain so they know how individual parts are faring.

"Certainly there are a number of facilities where decreases in oil prices and modification of market prices impact on plastics-based products don't really register as a blip," Anthony Long, principal of Pinnacle Healthcare Consulting, told Healthcare Finance News. "But those who are up to speed and who have more sophisticated systems in place or resources to draw on are reaching out with the drive-down in petroleum prices and ultimately plastics."

While oil prices don't directly affect the health care sector, they do have an impact on the companies that provide hospitals and practices with the products they need. By monitoring the rest of the supply chain, medical professionals can ensure they receive the best materials at the lowest prices.


Can veterans solve the skills gap in manufacturing?


Can veterans solve the skills gap in manufacturing?

While the manufacturing sector has improved since the Great Recession, it's not in top shape yet. The industry still lacks skilled workers to fill positions. According to a report from Deloitte and the Manufacturing Institute, approximately 2 million positions will go unfilled in the next decade because of the declining number of people entering the sector to replace retiring baby boomers.

Manufacturers have been targeting school-aged young adults to boost interest in the sector, but there may be another group that companies are excluding. Veterans are already trained in the science, technology, engineering and mathematical fields, which means there are a number of skilled workers just waiting to be employed throughout the supply chain.

Military provides STEM training for recruits
When people think of the military, they may imagine people in fatigues on the battlefield. However, that isn't the only job soldiers are enlisted to do. There is also a need for "enablers," or supporting roles, such as doctors, nurses and technicians, the U.S. Army website explained. The Army Reserves is nearly solely dedicated to that purpose. This allows members to transition seamlessly between military and civilian life.

Even those who aren't part of the Reserves learn STEM skills during their enlistment. The Huffington Post contributor Lt. Gen. Clarence McKnight Jr. explained that new recruits go through a series of tests to evaluate their interests and abilities. From there, the military is able to find positions where members will excel and best serve their time. They receive hands-on training with veteran non-commissioned officers to ensure that they have a grasp of their roles in the armed forces.

"If you looked at the skills that we have - in the engineers, the cyber warriors, the medical - many of these are on the cutting edge with the technology that we use in the military that can also be applied on the civilian side," said Maj. Gen. David Conboy​, as quoted on the U.S. Army's website.

Along with the training from veteran NCOs, enlisted members are also able to pursue academic degrees. According to Conboy, the rushed pace of today's current society and economy can put stress on young adults, who may be torn between continuing their education and getting a full-time job. However, the military allows recruits to do both. They get paid to learn STEM skills and improve their knowledge, and they have much more time to do so.

Employing veterans benefits everyone
According to the U.S. Department of Defense, approximately 1 million to 1.5 million people will be leaving the military within the next five years, the Nebraska Manufacturing Advisory Council reported. Considering 2 million manufacturing positions will go unfilled in the next decade, veterans may be the answer to the employee procurement problem.

The switch to civilian life can be hard for veterans, but jobs in manufacturing may help ease the transition. Veterans have experience making decisions in high-stress situations, which can improve productivity along the supply chain, U.S. News & World Report explained. Their technical skills from the military can go a long way in making executive decisions to ensure the success of the company. Veterans will also excel at working in teams, as they are used to having roles in groups and following a chain of command, according to the NMAC.

"Everything that you do in your organization happens in the military, too," Mike Grice, a board member for Medtech and the Biotech Veterans Program, told U.S. News & World Report. "It's just a variation on a theme."

Through apprenticeships and mentorships, businesses can show veterans how to transfer their military skills into manufacturing. This will help them make the transition into civilian life and show them how to perform certain tasks to benefit their new employers.

While a worker shortage is predicted for the upcoming years, it doesn't have to dominate the manufacturing sector. By recruiting veterans to their companies, manufacturers will be able to close the gap while offering retired members of the military civilian positions.


Beer: The new breakfast of champions?

on Tuesday, August 25, 2015

Beer: The new breakfast of champions?

As the Pawnee Parks and Recreation Department's most dedicated employee Leslie Knope once asked, "Why would anybody ever eat anything besides breakfast food?" The "Parks and Recreation" TV character may have had a point. There are many foods and beverages that would be considered breakfast food. Eggs and pancakes make the perfect main dish, while bacon, sausage and hash browns complement them to perfection. Maybe you'll have a glass of orange juice or a mug of steaming coffee to wash it all down. For the more untraditional breakfast eaters, cold leftover pizza and water may alleviate the hunger.

However, even Knope may not have considered having the newest addition in the morning. Food manufacturers and breweries have blended their supply chains to bring consumers breakfast-themed beer.

The sugary goodness of breakfast on tap
While the alcohol isn't necessarily meant to be drank at breakfast, it is styled after some of your favorite morning treats. You'll still have to make your own bacon and eggs, but you may soon enough be able to find the sweetness of cereal and pastries in bottles.

General Mills has partnered with several breweries around the United States to bring you a delicious treat for many occasions. Recently, the manufacturer has teamed up with Fulton Brewery to create the breakfast of champions in liquid form. HefeWheaties will be available in the Minneapolis and St. Paul, Minnesota, regions by the end of the month, according to The Associated Press. While the beer isn't made with the cereal, it is modeled after the wheat ingredients.

"We're not saying it's a breakfast beer, but we're not saying it's not," Ryan Petz, president of Fulton Brewery, told the source.

The breakfast corporation has also contributed its sweet Count Chocula cereal to Colorado's Black Bottle Brewery's Cerealiously Count Chocula ale. Last October, the beer producer bought out its local store of the breakfast treat, The Coloradoan reported. This time, General Mills provided the supply the brewery would need. Black Bottle plans to re-release the beer on tap on Aug. 25 and the drink should appear in bottles around Halloween. The brewery has used Golden Grahams and Cinnamon Toast Crunch in previous recipes, according to Fortune magazine.

However, cereal isn't the only breakfast food you'll be able to drink. San Francisco-based 21st Amendment brewery's new beer gives a nod to Kellogg's Pop-Tarts, the source explained. Toaster Pastry, an India Red Ale, contains 7.6 percent alcohol by volume in each 19.2-ounce can. The beer comes with the bitterness of an IPA, but the sweetness of the processed treats, which may make an interesting combination, according to the source.

The cure to what ales you
These new alcoholic creations may bring a new crowd of breakfast lovers to companies' audiences, which may be beneficial in many ways for some. General Mills' sales have not been as high as they once were. According to Euromonitor International, U.S. sales have dropped from $63.7 million in 2009 to $19.4 million in 2014, The Associated Press reported. This partnership with Black Bottle and Fulton breweries may help increase the company's revenue.

No matter what sales are like for any business, the shared venture between breakfast companies and breweries has extended the supply chain. Both manufacturers may reach audiences they would not have appealed to otherwise. Breakfast lovers may be drawn to the sugary alcohol, while beer drinkers could find they enjoy the taste of certain cereals. This has opened new avenues for these companies, and may redefine the way consumers view breakfast.


Strategic Sourcing Opportunities in Brazil

on Monday, August 24, 2015

The following article comes to the Strategic Sourceror courtesy of Supply Solutions, a leading Supply Management services provider based in Brazil. 

Most executives in the world know that Brazil is a huge market, but less know why and how there are so many opportunities. Brazil is one of the largest consumer markets in the world, with a highly productive agriculture sector and a diversified economy, and it is the 7th economy worldwide and accounts for almost USD 3,0 trillion GDP (2014 basis).

According to consolidated data from the 1,000 biggest companies in Brazil produced by Valor Econômico (the largest local financial newspaper) in partnership with Serasa Experian and Business School FGV:

By the end of 2015, however, this table will be out of date because of a serious political and economical crisis. The GDP shall decrease as Brazil is facing a recession and investigations of corruption in the government.  It is directly affecting sectors like Gas & Oil and Electric Power (where there is government participation) as well as others such as Automotive and Construction & Engineering.

Still, there is some good news. The favorable exchange rate is making some companies take advantage and export more. In the domestic field, some companies expanded geographically and won market share as others decided to please class C consumers like some retail chains. Also drug retailers are thriving, particularly thanks to the aging population. Therefore there certainly are great opportunities of sourcing from Brazil at this time.

Supply Solutions 13 years experience has shown that Brazilian market has evolved fast. There is a comprehensive professional supply market available to meet demands in almost every segment. Most of them knows Strategic Sourcing Processes very well and already deal with customers using local or foreign SaaS solutions. It means that closing deals is becoming more professional over time.

There are still a lot of opportunities, of course. Many companies rode the successful wave of Brazilian growth during the periods of 2003-2008 and 2010-2013. Some grew very fast and others were born as a result of the merger or acquisition processes. The ones who seized the moment and improved their administration processes are now ready to face this complicated economic time.

There are however many that are facing difficulties and need to rethink their cost processes rapidly - but are still struggling to make a decision.  

The Brazilian government intervenes in business environment at its own convenience. It changes taxes and business rules, and creates an uncertain environment impacting on decisions companies have to make.  Even for multinational companies or highly professionalized local companies, decisions take more time because of the additional analysis that this uncertainty requires.

Local companies tend to be faster. They override this problem and just carry on. They tend to be smaller than their competitors and risk much more on almost all ways. The decision must bring quick wins and if not they just change it until they go right.

In summary it can be said that doing business in Brazil is not so complex - it just needs some knowledge about the business behavior and to be current about governmental measures on the sector - just like you need in any other country.

Consumers want transparent seafood supply chain

on Sunday, August 23, 2015

Consumers want transparent seafood supply chain

In many countries, seafood is a staple in their citizens' diets. They feast on various fish, shrimp and shellfish. While fishing provides many places with the amounts they require, the practice is not sustainable in the long run. People consume large of quantities of seafood, which means they need another source for provisions beside fishing to accommodate them. This has caused fish marketers to turn to farming fish. However, consumers want to know where their food is coming from, which means companies need to follow guidelines to ensure people receive the information they desire and that the supply chain remains sustainable.

Globally sourcing seafood for consumers
As sustainability becomes a larger issue for consumers and the debate over genetically modified foods continues, companies must be open about where they are sourcing their provisions. People desire transparency throughout the supply chain. They want to know where their food is coming from and the farming methods those locations use to catch the food consumers require. To accommodate this need, businesses should be open about their procuring and purchasing habits.

The U.S. Department of Agriculture created the Country of Origin Labeling laws to fulfill this desire, and the ruling covers seafood, fresh meat, fruit, vegetables and nuts. Under these regulations, companies must label their food with where it was sourced in a way that people will understand. When it comes to seafood, retailers must also specify whether their food is wild or farm-raised. This allows consumers to buy the products they desire from the region they want they want. More people are interested in buying local and homegrown items, which could boost the domestic economy.

Changing laws may alter supply chain
Because of the desire to buy local and sustainable products, consumers do their research before purchasing. However, this ability may soon change. In May, the World Trade Organization deemed the COOL law discriminatory, as it potentially harmed business for Canadian and Mexican companies, Food Safety News reported. The U.S. would be required to pay $3 billion in penalties because of lost revenue. To counteract this, Congress has proposed repealing the mandatory COOL law and replacing it with the Voluntary Country of Origin Labeling and Trade Enhancement Act of 2015, which would allow businesses to choose whether or not they label their foods. While, at the moment, this law only applies to meat, it may expand to seafood at some point.

This may be beneficial for other countries and companies. In August, Alphin Brothers Inc. pleaded guilty to making false records and mislabeling their shrimp. Nearly 25,000 pounds of farm-raised shrimp were labeled as wild-caught and sold to consumers in Louisiana. The company was required to forfeit more than 20,000 pounds of shrimp and pay $100,000 in fines. Alphin Brothers was also placed on a three-year probation and will need to have all its employees participate in a training program on federal labeling requirements.

While the voluntary regulation will help businesses such as Alphin Brothers and other countries like Canada and Mexico, it may prevent consumers from finding out where their food has come from. They will no longer know the country of origin or how it was procured through simply reading the label unless companies decide to voluntarily add them to the package. Local purchasing may become more difficult as shoppers will need to resort to other methods to acquire the information they want.

The Voluntary Country of Origin Labeling and Trade Enhancement Act of 2015 will expand the supply chain for suppliers, as they will face less competition from locally grown products.