Better Data Sharing Could Help Predict and Prevent National Shortages in Baby Formula and Other Critical Consumer Goods – Center for Data Innovation
After Abbott Nutrition’s Michigan plant shut down in February 2022, parents across the country have faced baby formula shortages, with the national out-of-stock percentage reaching 74 percent as of early June. More than four months into the crisis, the United States still lacks a comprehensive picture of its shortage. The Food and Drug Administration (FDA) and White House need higher quality data on national inventory levels for baby formula. To combat these data issues, policymakers should institute a formalized data-sharing partnership with formula manufacturers, retailers, and government agencies to ensure continued access to retail data. Having access to better data can help produce more effective prevention and response for national shortages of baby formula and other critical products.
Policymakers still lack concrete data on the formula shortage despite the situation worsening. The White House monitors all facets of the supply chain in order to be able to craft a swift and effective response when issues arise. This includes tracking ships, cumulative imports, retail inventories, and production of goods. But the Biden administration has admitted that federal data sources have continually failed to give a complete picture of the situation.
Incomplete data on retail stocks has delayed the response to the plant shutdown and continued supply chain issues. While the White House receives updated production data from baby formula companies, it still lacks complete data for retail stock. To monitor retail inventory levels, the White House uses aggregated sales data from IRI Supply Index and Datasembly, despite some known deficiencies in these indexes. These third-party sources collect data and track retail inventories nationwide using standardized metrics. IRI’s index frequently reports higher in-stock rates than other sources. Moreover, its data is national and does not reflect regional variations in stock, largely obscuring local situations.
To try to ameliorate the situation, the FDA agreed to a contract with data analytics company NielsenIQ in June in order to access the private company’s retail tracking data. Before receiving Nielsen’s data, the FDA Office of Food Policy and Response had been working with a piecemeal of data sources from various government agencies, formula companies, individual retailers, and market research firms. With this new data, the government can better target and refine its response.
At present, the FDA does not have the authority to require private companies to report data about their supplies. For products impacting health and safety, Congress should grant the FDA the authority to collect this kind of data, as there is a public interest in knowing the state of certain consumer goods like toilet paper and other personal hygiene products. Better access to data would allow government agencies to spot and potentially mitigate supply chain issues before they arise.
The FDA, along with other agencies such as the Department of Agriculture, the Department of Commerce, the Department of Energy, and the Department of Transportation, should also explore the development and use of a cross-agency predictive analytics platform to identify goods shortages and other supply chain issues. The past year has been filled with upheavals, from the coronavirus pandemic to an increase in natural disasters, labor shortages, and energy shortages. These crises demonstrate the importance of visibility at all points of the supply chain. Predictive analytics, or analysis of current data to forecast future situations, can be used for things like product demand, pricing strategies, determining inventory levels, and could have prevented the baby formula shortage. But in order to take full advantage of the opportunity, policymakers must get improved retail data.
Improving data sharing across government and industry, as well as developing cross-agency predictive analytics capabilities will help both the public and private sectors prevent future supply chain crises. To move forward, the White House Office of Science and Technology Policy should solicit public comments on organizing these types of partnerships. Only with better data can policymakers adequately prepare and prevent shortages of critical consumer goods and take advantage of advances in emerging technologies.