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Just in Case

Just in Case

The fallout from September 11 has hit some industry sectors hard. For instance high-tech electronic companies in North Asia, already feeling the effects of the US recession prior to the suicide attacks, have seen a major contraction of business. But industries typically seen as recession proof, such as the food industry, have also noticed an impact..

Roger Bayliss, Austrade executive general manager for the Middle East and Indian Ocean region, says food security in particular has taken on an extra importance after the anthrax scares, with consumers seeking certainty on the quality and integrity of the food they are purchasing. That need for reassurance has direct implications for Australian business.

"The events that have unfolded since September should be a warning to Australia business to carefully examine their supply chains. Where there is any doubt about the supply chain's integrity, organisations should seek to shorten [the supply chain] as far as possible," Bayliss says. "They must ensure that they're delivering a quality product to the consumer faster and in first-class condition and in a form where the consumer is confident that they're receiving a top quality product that has not gone through an elaborate supply chain."

Philip Cryer, a managing partner of Dawson Consulting, says fear of product tampering will force manufacturers and suppliers to build better product recall mechanisms into their supply chains. He says companies will need to ensure the physical infrastructure can support a very efficient recall of product, in a kind of reverse logistics. "I also think the information flow will be increasingly important. Because one thing that we've learned from September 11 is the need to have the message right to keep consumers or the general public confident about what's going on."

Scott Dawes, director e-business industry strategies at Oracle, agrees with that sentiment. Throughout Europe, North America and Australia, he says customers' largest concerns are around product protection and ability to trace and track product - the "genealogy of product" - in terms of tampering. In the US, federal authorities are beefing up legislative requirements that will force companies to better manage the "traceability" of their product, he adds.

"There's a lot of movement towards what companies will have to do with their supply chain in terms of products they buy, profits they make, how they package products, how they ship them, and how they track all those processes," Dawes says. "Companies will need to keep a much tighter control and data network on what goes in to a product, what was done to it, and where it goes. Then in case of an emergency, they're able to cut the process off as quickly as possible and inform those who may have received the product."

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More about AMR ResearchAustralian Graduate School of ManagementAustralian Trade Commission (Austrade)Dawson ConsultingE*TradeFord MotorGartnerGartner ResearchHolden- General MotorsIncitecMotorolaToyota Motor Corp AustTransportationXerox

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