Recent Food Scandals Highlight Need for Supply Chain Management Oversight

Robert Brice
Thu, Sep 11, 2014

In the wake of a number of supplier-related miscues in the Pacific Rim countries to companies like McDonald's, Starbucks and Canada-based Burger King, a report in The Guardian suggested that businesses need to look at their supply chains and take proactive measures to avoid any future scandals. Those actions could include deployment of automated data collection as a means of ensuring what goes on upstream is known at company headquarters.

Consumer Interests Are Paramount
The British Government commissioned a review of food supply chain practices by Professor Chris Elliot, food and safety director of the Institute for Global Food Security at Queen's University Belfast, who suggested new regulations requiring food supply chain managers to put consumer welfare and safety ahead of everything else. Elliot's report also said that there needs to be laboratory standards established for all food inspection.

Criminals Have An Easy Time Of It
The review found that criminal behavior in the food supply chain is so prevalent that a police force should be created to stop fraudulent behavior. The findings come in the wake of the so-called "horsemeat" scandal of last year. Although this report is geared toward food supply chains in the United Kingdom, food providers in the United States should take the findings to heart and utilize them on their own supply chains. Because U.S. fast food purveyors are rapidly growing in foreign markets, the chance of unethical or worse practices could bring major problems to an otherwise successful operation.

Social Responsibility Makes A Business Thrive 
An International Business Times article showed how major food companies are increasingly becoming aware that they have a social responsible to keep customers happy and purchasing their products. Consumers are far more active in discovering flaws in the supply chain and that influences buying behavior, the story found. Dr. Thomas Ngniatedema​, a professor at Kettering University in Michigan, said findings from a PricewaterhouseCoopers study that showed 80 percent of investors considered sustainability in decisions on where to put their money indicated how neglecting ethical concerns can negatively impact the supply chain.

Beth Rusert​, a St. Louis-based consultant, told the IB Times that executives need to pay attention to what people are telling them.

"When [a companies is] not listening to what ... stakeholders are saying, it has a direct impact on the company's reputation, which then carries over into purchase patterns, investments, and retainment and hiring of employees. There's so much of a domino effect," Rusert said. "Those organizations who listen, have conversations with their stakeholders and really engage with them on a regular basis, are going to be much more successful than those that think they have the answers."

Cultural Shifting
Major food companies are faced with a growing need to change their policies regarding environmental practices. They also are expected to ensure safe and non-exploitive working conditions for all employees, including suppliers, according to the I​nternational Business Times story. If they take these relatively easy actions, market shares will likely stay the same or even increase as consumers understand the company's commitment to sound management practices. Leslie Pascaud is with Added Value in New York and she told the Times that companies are being proactive because they don't want to take the hits that McDonald's has taken over the past 10 years for poor supply chain management.

Being proactive and socially conscious is critical for modern supply chain managers to keep their customers happy, their workers and products safe and their reputation unsullied from scandals emanating from within their business operations.

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