A problem in the U.S. supply chain could affect several products that include: milk, yoghourt, butter, cheese, ice cream, crackers, sandwich bread, candy, chocolate, cereals, and lunch meats. An ice cream business that uses contaminated milk in its manufacturing processes could damage consumer trust in its products, trigger product safety alerts, and face legal suits from customers and the government (Lim). The management of the company should be held responsible for the use of contaminated milk in its manufacturing processes. The management of the company owes its customers a duty of care to ensure that they only produce food products that are free from harmful ingredients (Mooney).
A customer relationship management (CRM) system involves the managing of every aspect of the customer relationship with a firm in order to improve customer service, increase customer loyalty and improve the profitability of the firm (Dess, Lumpkin and Eisner). Using a CRM system would help track the customer feedback and therefore, CRM can help a firm to identify quality problems in their products and the source of the problem in the supply chain. If a company finds out contaminated milk in their supply chain, the company should use CRM to identify the supplier responsible for the contamination and quickly take corrective action in order to restore customer confidence in the company’s products.
The contamination of the milk with melamine a compound used to manufacture plastics caused the death of four infants and another fifty four thousand infants were diagnosed with kidney stones (Mooney). Judging by the gravity of the matter it is fair that the Chinese courts sentenced the middlemen to death and the dairy boss to life imprisonment. Adding melamine in order to boost the tested protein in watered down milk was a case of a reckless pursuit of profit at whatever cost (Lim). Companies have a responsibility to put the interests of their customers before profits and must never produce goods that will be harmful to the customers. I believe that US should also adopt such strict laws so that company executives act ethically not just for the sake of maintain a positive image among customers, but because they also know that unethical behavior will attract stiff penalties and severe punishment.
Midler refers to the tendency of Chinese suppliers to deliberately and clandestinely increase their profit margins by compromising on quality as a “quality fade”. Chinese suppliers deliberately and gradually lower the quality of the products that they supply to their customers (Midler). The first consignment is usually okay, but the successive consignments contain less and less of key components. In one case, an American company that engineered aluminum systems used in construction of high-rise buildings subcontracted the manufacturing of the profiles to a Chinese supplier only to find out that in some circumstances the profiles weighed less than 90% of the specified weight (Midler). WND notes that there have been many instances of defective products sourced from China that have been recalled in the US that include, toys that could choke children, hammock stands that could snap and cause the user to fall, and magnet toys that could perforate children’s intestines.
The effect of such quality failures is damage in the reputation of the company, and the possibility of legal suits. In addition, as more American firms outsource their manufacturing to cheap Chinese suppliers, there is a loss of jobs in America. However, if the Chinese persist in their “quality fade” it is likely that the American companies will wise up and find new suppliers.
Works cited
Dess, Gregory G, G. T Lumpkin, and Alan B Eisner. Strategic Management. New York:
McGraw-Hill Irwin, 2010. Print.
Lim, Vivien. "Tainted Milk: Unravelling China’S Melamine Scandal". Thinkbusiness.nus.edu.
N.p., 2013. Web. 22 Apr. 2016.
Midler, Paul. "Dealing With China's 'Quality Fade'". Forbes 2007. Web. 22 Apr. 2016.
Mooney, Paul. "The Story Behind China's Tainted Milk Scandal". US News & World Report.
N.p., 2008. Web. 22 Apr. 2016.
WND,. "Made In China, Recalled In U.S.". 2007. Web. 22 Apr. 2016.
