Enhanced Data Exchange May Aid in Anticipating and Preventing Nationwide Deficiencies in Baby Formula and Essential Consumer Products
The ongoing baby formula shortage in the United States, with a national out-of-stock percentage reaching 74 percent as of early June 2022, has highlighted the need for improved data sharing and predictive analytics in the supply chain.
Incomplete data on retail stocks has delayed the response to the plant shutdown and continued supply chain issues. The United States lacks a comprehensive picture of the baby formula shortage, with the Biden administration admitting that federal data sources have continually failed to give a complete picture of the situation.
To address this, the White House uses aggregated sales data from IRI Supply Index and Datasembly to monitor retail inventory levels, despite some known deficiencies in these indexes. However, these measures are not enough. Improving data sharing across government and industry, as well as developing cross-agency predictive analytics capabilities, will help prevent future supply chain crises.
The crisis has been ongoing for more than four months, and policymakers are considering instituting a formalized data-sharing partnership with formula manufacturers, retailers, and government agencies to ensure continued access to retail data. Congress should grant the Food and Drug Administration (FDA) the authority to collect data on consumer goods like baby formula, toilet paper, and other personal hygiene products due to public interest.
The FDA, along with other agencies, should explore the development and use of a cross-agency predictive analytics platform to identify goods shortages and other supply chain issues. In fact, predictive analytics can be used for things like product demand, pricing strategies, determining inventory levels, and could have prevented the baby formula shortage. Crises like these highlight the need for visibility and predictive analytics in the supply chain to prevent future shortages.
To enhance supply chain visibility, the White House Office of Science and Technology Policy should solicit public comments on organizing partnerships for data sharing and predictive analytics. Key strategies include adopting Digital Product Passports (DPPs), expanding advanced Master Data Management (MDM), mandating standard formula and ingredient data submission platforms, increasing regulatory collaboration and data integration, and enforcing transparency and accountability via legal frameworks.
These improvements would enable better visibility into inventory levels, production capacity, and distribution bottlenecks to proactively address baby formula shortages and other critical product shortages. The past year has been filled with upheavals, including the coronavirus pandemic, an increase in natural disasters, labor shortages, and energy shortages, demonstrating the importance of visibility at all points of the supply chain.
In June, the FDA agreed to a contract with data analytics company NielsenIQ to access the private company's retail tracking data. The White House monitors all facets of the baby formula supply chain, but the FDA needs higher quality data on national inventory levels for baby formula.
The baby formula shortage is a stark reminder of the need for improved data sharing and predictive analytics in the supply chain. Only with better data can policymakers adequately prepare and prevent shortages of critical consumer goods and take advantage of advances in emerging technologies.
- The ongoing baby formula shortage has underscored the need for improved data sharing and predictive analytics in the supply chain.
- Incomplete data on retail stocks has complicated the response to the plant shutdown and continued supply chain issues.
- To address the data gaps, the White House is using aggregated sales data from IRI Supply Index and Datasembly, but these measures are not sufficient.
- Policymakers are considering instituting a formalized data-sharing partnership with formula manufacturers, retailers, and government agencies for continued access to retail data.
- The Food and Drug Administration should explore the development and use of a cross-agency predictive analytics platform to identify goods shortages and other supply chain issues.
- Improvements in data sharing, predictive analytics, and technology can enhance supply chain visibility, prevent future shortages, and address bottlenecks in the distribution of critical consumer goods.
