"This is a devastating example of what can happen if you don’t have control and knowledge of your suppliers – all the way down the supply chain.
Supplier relationship management is a key function of a professional approach to purchasing and managing a supply chain effectively, and in this case, it appears supplier knowledge was severely impaired. Many companies, even large corporations get caught out at lower levels in their chain – such as tier 2 and 3, and though they may have a good relationship with the first tier, they have no idea what others are doing.
The recession has undoubtedly placed more pressure on companies looking at costs and where savings can be made. Though full details of the extent of this malaise are not available yet, quality controls, sufficient audits are crucial – especially in food chains, where the temptation may be to pass these on to the suppliers instead through self-certification. Though this may offer legal redress should problems occur, all the explorations and recriminations will not prevent these types of scandals from wreaking substantial damage to reputation and consumer trust."
Here is how Supply Management magazine reports the latest devlopments and possible fraud issue thoughts from CIPS Procurement Fraud adviser.