Editorial: A Chance to Add Value.

By Len Monheit
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Last week I spoke a bit about the role of suppliers and solution providers in the natural and nutritional products industry. Whatever the industry, events will occur to challenge business processes and relationships, whether these events involve government, competition, international issues or consumer perception. And suppliers, whether of ingredients or finished products, must respond to these forces. Solution providers, with a philosophy of ‘challenge resolution’ are typically better prepared.

This week, the issue takes on an expanded importance as FDA begins the next stage of its implementation of the Bioterror Act of 2002. Beginning October 16th, FDA will post the form for and begin accepting facility registrations from food manufacturers and suppliers around the world seeking to do business in the United States. This legislation is expected to affect between 200,000 and 400,000 companies around the globe and includes dietary supplements and dietary ingredients.

After December 12th, facilities must have in their possession, a registration number which they must submit along with their prior notice of goods before each shipment to the United States is accepted. Changes presented in the interim final rule suggest FDA will use enforcement discretion for the first four months to make it a bit easier for companies to fully comply and the prior notice period, originally set at noon the day before goods arrival, has now been changed to allow submission two to eight hours ahead of shipment arrival and the form is intended to be a single one for both FDA and customs purposes.

The final rule is much more practical than previous versions and has received support from groups which will be affected. Despite an apparent lessening of the compliance burden, there will still be an impact. And with this impact, as is so often the case, comes a chance for companies to take a proactive approach to add value to their supply chain relationships. While it is true that most North American companies should rather easily comply, offshore suppliers are more vulnerable. If you or your clients rely on offshore sources, then the potential for disruption is high, and some planning may be a good investment.

It’s probably safe to say that some companies will not comply at all, despite the four month enforcement discretion period. This means new business opportunities for correctly positioned and properly communicating organizations. And if you’re familiar with the process, perhaps there’s even a chance to add value to your clients by helping them prepare. If you’re a broker or representing multiple suppliers, you can develop a checklist and audit system to ensure your suppliers comply – well in advance of the deadline. This means facility registration, appointment of a US based agent and a system for ensuring that advance notice of shipments will be well handled by your designated suppliers. Communicating the safeguards and checks you’ve put in place to your clients (or even additional inventory you’ve brought into stock to handle unexpected supply disruptions) is one idea. Actually recommending or providing systems for your clients to use could be an excellent practice and may be an opportunity to take your organization from being merely a low-priced supplier of commodities to being a value-added operational partner.

These opportunities to think creatively and strengthen relationships come frequently, no matter where you are in the value chain. All it takes is an effort to understand your client’s operation, perceptions, issues and challenges, both in the present and in the future.

It’s relatively easy to pitch products, and more difficult – and more valuable – to offer solutions.

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