In this month’s issue on supply chains and minimizing their risks, China Business Review (CBR) oddly doesn’t mention anything milk-related (although there is an article about mitigating the risk of…windstorms).

If you sift through the bundle of cover stories, though, you will find a rather obscurely titled article, “Managing Brands through Supply Chain Visibility.”

It’s still well worth a read for anyone interested in the health of babies or customers generally, as it concludes: “Brand owners that source from China must keep a close eye on every link in the supply chain to maintain quality standards.”

Interesting Point #1: If It’s Not Made in China, It Might Be Worse

“Based on observations and analysis of recalls of products that were manufactured in China during the second half of 2007, Intertek found that the top five reasons for recalls involved unapproved changes to products, components, housing material for electrical components and auto parts, design, and wire and contact material (to reduce copper content),” CBR reported. “In many cases, these component materials originated in other countries and were exported to China for manufacturing.”

So quality problems may not arise so much from stuff “Made in China,” but rather, stuff made outside of China, then incorporated into the manufacturing process on the mainland. You might want to get to the bottom of where your components really are coming from, and what shape they’re in when they arrive.

Interesting Point #2: The Brand Risks the Most

Maybe you think your manufacturer has as much vested interest in making sure the product is as error-free as you. After all, good products are win-win, right?

Wrong.

“Though brand marketers, wholesalers, and retailers all have vested interests in protecting the brand’s value, ultimately the brand owner has the most at stake,” CBR reports. “Brand owners must not only develop and design safe products, they must ensure that every unit produced and on store shelves meets the same safety standards as the initial test product. To maintain product quality and safety, brand owners must maintain transparency and traceability throughout the supply chain.”

Interesting Point #3: Does the Supplier Care about More than Money?

Well, probably not.

But be on the lookout for suppliers with “sound social responsibility practices and those that aim to minimize their carbon footprint.”

Those that have adopted such touchy feely practices may be better than others.

Interesting Point #4: Two Chains Are Better Than One

“Evaluating and developing multiple supply chain sources will reduce reliance on a single supplier and ensure the future availability of supplies,” CBR reports. “This step mitigates risks related to resource allocation, natural disasters, and suppliers’ financial situations.”

And who knows, there might actually be some milk makers out there that don’t include melamine as a nutrient.

Interesting Point #5: Feel the Suppliers Pain

“Recent regulatory factors that affect suppliers in China include measures to suppress overheated export growth—such as last summer’s export tax rebate adjustments and the addition of several hundred commodity categories to the Catalogue Restricting Processing Trade Commodities,” CBR reports. “These developments have raised the production costs of related commodities and forced some small and medium-sized companies to close.”

So if you’re not monitoring trends that are affecting your supplier, those “great” low prices you keep getting could be maintained by decreasing quality standards.

Final Interesting Point: Grade Your Supplier

Keeping tabs on your supplier with score cards (measures that can track quality control and security practices, for instance), and then sharing the grades with them could encourage them to perform better.

Companies and suppliers should agree on the same measurement factors.

After all, you wouldn’t want to be graded on a course you didn’t elect to take, would you?

    Channel: Vital News     |