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Horsemeat saga hasn't stimulated better supply chain engagement

A high proportion of chief executives are disengaged from their supply chain, despite supply issues being raised by the ongoing horsemeat scandal.

A report from the Chartered Institute of Purchasing & Supply (CIPS) found that more than a third of chiefs are not actively engaged with their suppliers, while almost half of the companies surveyed do not have a risk mitigation strategy for their supply chain.

Over 50% of supply chain professionals commented that the horsemeat scandal, which involved horse DNA found in top food stores’ processed meats, has been cause by supermarkets squeezing their suppliers.

Additionally, nearly 90% of supply chain managers said they feel regulators do not fully understand supply chains, although 60% said that in the wake of the horsemeat saga, they are taking their risk assessment more seriously than before.

Dave Noble, CIPS chief executive, commented: “The horsemeat scandal highlighted the damage that can be caused when supply chains are not adequately managed.

“The reality is, supermarkets are among the most advanced supply chain managers in the corporate world and though there are exceptions, many have fallen woefully short. It is only a matter of time before other sectors suffer a similar fate.

“These survey results are disappointing, but not surprising, given how few CEOs and boards take supply chain issues seriously.

“We will continue to witness scandals such as this, in a multitude of sectors, until investors, analysts and boardrooms place appropriate emphasis on the importance of their supply chain to their business and take steps to ensure they are fit for purpose.

“As the financial crisis showed, too little attention is often given to the areas of a business that have the potential to create the most damage.

“We hope this sorry tale will at the very least ensure supply chains are recognised as one of the most important aspects of a business and adequately scrutinised at every level.

“Those investors and businesses that do acknowledge this and master their supply chain will succeed, those that don’t will eventually get found out.”

This was posted in Bdaily's Members' News section by Miranda Dobson .