Undercover footage obtained by The Guardian and ITV News recently shed light on the hygiene breaches and tampered food safety records of the 2 Sisters Food Group. This prompted the knee-jerk reaction of household names, such as Aldi, M&S, and Tesco, to suspend orders, and culminated in the chicken supplier suspending operations pending further investigation.
In the wake of 2013’s horse meat scandals, the response of the Chartered Institute of Procurement and Supply to the ‘chicken scandal’ was chilling in its simplicity:
“Supermarkets still do not have complete control of their end-to-end supply chain and knowledge about their suppliers continues to be severely impaired years after the horse meat scandal.”
Supply chains suspended
In response, many clients of 2 Sisters Food Group conducted their own investigations, with all clients suspending their supply. It could be argued, however, that the damage is already done.
- Standards/regulations have been broken
- Money has been made illegitimately
- The supplier has been indicted, with fines inevitable, and the impact on their business potentially devastating.
- Clients’ reputations have also been damaged, and as they will probably need to destroy existing stock, profits will be reduced.
Supermarket giants are more likely to be concerned about damage to their reputations than the fiscal loss, but the impact arising from the supplier’s wrongdoing is likely to linger in other ways.
For SMEs, a comparable situation could potentially force them into dire straits.
How to manage supply chains effectively
The sobering truth is all organisations need to manage their supply chain effectively. This can be achieved by rigorous scrutiny at both core stages:
Sourcing: you must vet your potential supply chain. This goes beyond sustainability, to cover areas like ethics, the Modern Slavery Act, and the management of suppliers’ own core material providers, as a failure in each of these can damage your reputation. If you are a young SME, this could potentially be the only reputation you have, severely hindering the development of subsequent supply chain relationships.
Management: initial sourcing can be as meticulous and as in depth as you please, taking days at a time; unfortunately, it shares a flaw with driving tests, in that it means you only have to meet a standard on a given day. Thereafter, performance and standards may improve (or not) without you knowing. When bidding, a lack of knowledge can lead to doubt from the contracting authority, which in turn suggests risk, and generally results in low assessment scores. Supply chain management should therefore be woven into your quality management system, and punctuated with meetings to ensure both you and your supplier are aware of performance benchmarks, areas for improvement, and the best means of sustaining an efficient and transparent business relationship.
By effective, sustained analysis of the supply chain, you will always remain abreast of emerging concerns, allowing you to pre-empt potentially poor suppliers/performance, and ensure your culture of effectiveness, efficiency, and ethics flows throughout your business operations.
Supply chain in tender responses
At Executive Compass, we have experience of writing concise, yet multifaceted responses to supply chain management questions, and can provide you with the persuasive narrative you need to truly convey your responsible, sustainable, and safe supply chain, allowing you to increase your win rate and instil confidence in your potential clients.
Contact our team today to discuss how we can help.