Nestle: Supply Risk Permeates Chocolate Chip Cookie Dough

It seems no food ingredients are safe these days from tainted sources of supply (or inappropriate production techniques). From milk products to peanuts to lettuce to pistachios, no ingredients are safe. Moreover, the speed with which information becomes publically available about tainted products is increasing as well, damaging brands faster than ever before. Over on his blog, Bob Ferrari recently penned a blog summarizing some of the details of Nestle's cookie dough recall from last week (which sickened over 60 people) while also finding time to opine with a few thoughts on what it means.

According to Bob, we should first applaud Nestle for "having a response plan" to the incident. To this end, putting in place a "response plan and marshaling a crisis team are all critical steps to effective crisis management of these situations". But given the speed with which information travels, one wonders whether or not Nestle had any choice in this matter. Bob notes that by his "informal observation, the first AP story announcing the recall hit the media a little after 9 AM Eastern Time. By 3 PM Eastern, Google had a listing of 774 categorized news stories with the keywords of Nestle USA Toll House, and E. Coli associated in the banner, and most of the national and cable networks were featuring the story on breaking news or health related sites. By 5 PM, the number rose to over 900."

From Bob's observations, I believe we can discern a few things about the new supply risk rules that apply to companies across industries today -- especially those risks involving quality or production defects. First, the more information a company has about its suppliers and its broader supply chain, the faster it can respond with a credible response to a crisis, putting its customers at ease about the rest of its product lines. Second, even though we can all agree that early -- or even pre-emptive -- detection of risks should be a primary goal of any supply risk program, risk mitigation steps and procedures including but not limited to the speed with which a company can find supply alternatives are equally as important. And third, in the increasing litigious society we live in -- after all, the new US healthcare tsarina comes from a background of trial lawyer advocacy -- the best defense against business and consumer lawsuits around supply risk issues is a good offense that starts with controls and audit trails that prove corporate investment and concern for the area.

Jason Busch

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