The supply chain's missing link

Radio Frequency Identification (RFID) is a technology designed to make our supply chains more efficient and safe. However, is there a risk of too much reliance on technology, causing employees to become complacent to safety and security risks?

And, what are the privacy risks? The following case illustrates the failure of technology to protect the food supply chain. In addition, a serious privacy breach occurs as well.

The Case of the Tainted Meat

It was 7 A.M. and Dr. Emily Watson was exhausted. Twelve hours ago, Holy Cross Hospital, located in a major midwestern city, had admitted four patients suffering from E.coli poisoning. Two had died during the night and her other two patients were in critical condition.

In her office, Emily poured herself a large cup of black coffee and reached for the phone. Her first call was to check in with the health department and the second was to a reporter for the local TV station who wanted to interview her for the morning news.

Emily had already met with family members of the deceased -- all orthodox Jews who lived in the same community. As the family described what happened that day, Emily learned that the patients had dined on kosher lamb. According to the family, they all shopped for their meats at Martin's, one of the few local supermarket chains that feature kosher meats. Emily reported this fact to her contact at the health department. "I can't say definitely that it was Martin's meat, but I would immediately issue a warning," advised Emily. The department began an investigation.

Roger, general manager of Martin's, was at the store's loading docks checking a delivery of produce when he was paged. Roger returned to his office to take the call from the health department. "What do you mean E.coli?" said Roger. "We only carry the finest meat. Plus we have technology that tracks the shipment so we know if food is spoiled or packages tampered with." Using RFID tags imbedded into the package, Martin's was able to track the age of each product and the origin of the meat.

As he hung up the phone, Roger worried about the reputation damage to the market. As he sat at his desk, he listened to the local radio station reporting the deaths of two people from E.coli poisoning and suspicions that the source of the tainted meat was Martin's. "I have to find out what happened and fast," Roger muttered. He called Martin's head office to explain what was going on. Sophie, Martin's Midwest regional vice president, told Roger they would check on transactions captured by the market's loyalty cards. "I thought this RFID technology would protect the safety of our supply chain," Roger said. In addition to the department of health, the FBI launched its investigation. Since the World Trade Center attack, many in government fear that the country's food and water supplies are vulnerable to terrorism.

Martin's market had routinely scanned all the meats to determine whether RFID tags registered out-of-date or inconsistent records. Because of the E.coli issue, Roger did a 100 percent RFID sweep of all meat and dairy packages to check for package inconsistencies. To Roger's surprise, there were three packages of ground lamb that registered inconsistencies. "Wait a second, according to the RFID technology this meat was supposed to be sold. How did this get back into the store," he wondered.

The three suspicious packages were linked using the RFID technology to loyalty card records of patrons. Martin's technology team went to work and, according to its records, soon traced the sale of the kosher lamb to a local Muslim. The FBI was notified and brought the man in for questioning who denied that he had purchased the meat. That evening, the local news showed the man who had been brought in for questioning.

Sally, one of Martin's clerks, was watching the news and recognized the man and soon called Roger. "He was going to buy the meat but his debit card was rejected. I personally returned the lamb to the butcher," Sally said. "Of course, the packaging had been scanned and it was recorded as sold and linked to the customer's record," she added. Roger quickly notified the FBI. But he still wanted to know: "If the meat was really tainted, where did the technology fail us?"

Consequences

Was it an act of terrorism? Or was it a failure that occurred in the supply chain? In any event, Martin's suffered irreparable damage to its brand. The head office made the decision to close the store.

The local TV station would not let the story rest. It did an investigative report on the civil liberty issues and surveillance of innocent people through the use of their grocery store purchasing data.

Lessons from Martin's Supply Chain

What is the lesson for companies? It is the need to recognize the importance of having internal controls such as monitoring and accountability procedures in place to identify negligence in the supply chain or improper usage of personal data. The missing link in this case was the human element. It was the company's failure to ensure that its employees had the special competencies to manage the supply chain technology it came to depend upon. As a result, an innocent man was arrested and personal information was abused.

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