Supply chain scandal forces companies to act

Petra Urhofer Blog, Supply Chain 0 Comments

A number of major corporations were caught on the back foot by the discovery of horse meat in several products. Many of the UK’s major food retailers have had to remove stock from shelves and issue apologises to their customers.

The scandal highlighted the growing level of risk associated with global supply chains. Not only does a far reaching web of suppliers make products difficult to track but it also opens the door for criminals to take advantage of this limited visibility. Growing pressure on suppliers to reduce costs has also contributed to less stringent checks.

Reduced Customer Confidence

A recent survey carried out by Which? revealed that one quarter of UK consumers have lost faith in the food industry. As a result, 30 per cent are buying fewer processed meat products and just under a quarter have reduced their consumption of ready-made meals. In an attempt to avoid further reputational damage and regain consumer trust, some companies have begun to act.

One example is McDonalds. The fast food restaurant, which was not linked to the scandal, has nonetheless acted to allay the fears of its customer base. The American company invited members of the public to trace the supply chain of some of the products on its menu. This initiative, entitled “Quality Scouts“, will see a number of consumers chronicle the journey from farm to restaurant, of several of the ingredients which make up the chain’s popular offerings.

Closer Working Relationships

The horse meat scandal exposed the risks of not working closely with suppliers. Many businesses which cut costs by outsourcing production to vendors whose practices they did not monitor, suffered severe reputational and financial losses. By treating suppliers as an extension of their own business and working together to cut costs, retailers can ensure a similar situation does not occur in the future.

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