In 2008, Sanlu’s infant formula was suspected to be contaminated with melamine. The chemical is known to cause kidney stones, especially if consumed in high doses. During this time, the company recalled 700 tons of its formula. The company also admitted that their formula contained melamine and led to the stopping of the formula production. Tests later revealed that out of 490 milk samples collected from 109 brands in the country, 69 from 22 brands had melamine. Sanlu was at the top of the rank in terms of contamination. The concentration of melamine in the infant formula was a thousand times more than the acceptable quantity. It is clear from this information that Sanlu is to blame for this contamination (Lu and Tao 7). It is important for any company producing items being consumed by people, especially children to be sure of the contents of their products regardless of whether they have other suppliers of raw materials. It is their duty to perform thorough examinations and tests on these products.
Outsourcing is the provision of certain business processes by an external provider. Outsourcing is almost a guarantee of expertise and specialty in the field. The people outsourced have the necessary technical expertise and tools to provide the services. Also, it is beneficial for a company in matters of risk-sharing. Certain responsibilities of the organisations are shifted to the external vendor. Once a company outsources, it risks exposing their confidential data to the external partner. Also, the vendor may not focus on the customer’s needs like the organisation would and may focus more on expertise needs (Flatworld Solutions).
Some companies rely on their suppliers to provide resources needed to produce a product. It is important to ensure that the products supplied are inspected and that they meet the set safety standards. Ethics are important for many reasons, one of which is the management of cases. The investigation of a case, once completed suppliers can submit their reports seeking approval of corrective action. The managers can use this investigation to review the actions and measures established and prevent reoccurrence. Ethics are also important in the development of effective compliance policies, some of which are beneficial to the entire supply chain (i-sight).
It is possible for consumers to regain their trust of dairy products after the Sanlu incident. The country can set high standards for the milk products requiring the producing companies to meet these standards. Such standards can monitor every product from the suppliers to the producers. Also, they can set consequences if the companies do not meet the standards. For instance, the closure of companies including popular companies that are well-known and have been in the industry for long.
After the contamination incident, the vice-president of the company gave a public apology about the babies who had consumed Sanlu’s formula and died. However, the company did not take full responsibility for the incidents and blamed some of the suppliers. For this reason, the company did not manage the crisis effectively.
Works Cited
Flatwold Solutions. The Advantages and Disadvantages of Outsourcing, 2016. Web. Retrieved from https://www.flatworldsolutions.com/articles/advantages-disadvantages-outsourcing.php
i-sight. The Importance of Supply Chain Ethics and Compliance. i-Sight, 2016. Web. Retrieved from http://i-sight.com/resources/supply-chain-ethics-compliance/
Lu, Jiangyong and Zhigang Tao. Sanlu;s Melamine-Tainted Milk Crisis in China. Asia Case Research Center: The University of HongKong, 1-24. Print.
