GNC Provides Supplement Manufacturers Big Lesson in Supply Chain Control

While not admitting any wrongdoing, the largest global dietary supplement retailer, GNC Holdings Inc., just handed over $2.25 million to avoid federal prosecution. The allegations indicate that GNC sold a misbranded supplement made by Dallas-based USP Labs. According to the Justice Department, USP Labs was also indicted on charges that they conspired to import ingredients from China using false information. This costly mistake should present a lesson to other supplement manufacturers in strengthening supply chain control.

According to “The largest supplement company in the world just settled a case with the US government,” posted by Sarah N. Lynch on BusinessInsider.com, Benjamin C. Mizer, the principal deputy assistant attorney general for the US Department of Justice, said that ‘unlawful dietary supplements are an important enforcement priority.’ GNC just learned that lesson the hard way. In 2013, GNC sold a misbranded supplement called OxyElite Pro Advanced Formula made by USP Labs. In 2015, USP Labs was indicted on charges that it had imported ingredients from China using false certificates of analysis and false labeling. GNC claims to have been in compliance with the Federal Food, Drug and Cosmetic Act, suggesting that USP provided false information about their products.

Strengthen Supply Chain, Protect Consumers With ERP

As part of the non-prosecution agreement, GNC agreed to suspend the sale of products that are on the FDA watch list, list acceptable and unacceptable supplement ingredients, and conduct stronger due diligence of suppliers. With a product list as vast as that offered by GNC, supplement manufacturers, as well as pharmaceutical manufacturers, would have a difficult time managing inventory and suppliers with manual or specialty software. An integrated enterprise resource planning (ERP) solution will streamline the process and provide valuable insight into the supply chain.

ERP provides businesses with a single source for information including supplier and vendor information, contractual agreements, and product specifications and inventory requirements, such as allowable or prohibited ingredients. Quality assurance and quality control testing data can be managed in ERP, keeping key data within easy reach should a product be called into question. Traceability measures also make it easier to manage product information and quickly recall products that could put customers at risk.

The pressure is on for supplement and pharmaceutical manufacturers to improve communication and collaboration throughout the supply chain to improve product safety and protect consumers. Contact AKA Enterprise Solutions for more information about strengthening your supply chain with ERP.

By AKA Enterprise Solutions, a Microsoft Dynamics CRM and ERP Partner for Life Sciences