Firms urged to keep control of supply chains following pork investigation
LARGE firms with national – even international – supply chains must ensure they have a clear understanding of where those suppliers source their goods, a leading academic has said.
Dr Mark Johnson, associate Professor of Operations Management at Warwick Business School, was speaking after the discovery that pork chops sold in Tesco while branded British, were actually Dutch in origin.
An investigation by the BBC found that a pack of pork chops from the supermarket had a less than 1% chance of coming from the British Isles, despite being labelled as British.
The meat in question was supplied from Cranswick Country Goods in Hull, which in turn had sourced its meat from Wolverhampton-based F A Gill.
Dr Johnson, who has carried out extensive research into supply chain management, said: “As firms outsource to other firms – creating supply chains – they lose control and visibility of what is going on as suppliers outsource to other suppliers in the drive for lowest cost. UK labelled Dutch pork is one example of this occurring, the recent horse meat scandal another, with the Mattel recall of toys yet another.
“So, what can be done to ensure that consumers know exactly what they are buying? Firms with lengthy and complex supply chains need to understand what they actually look like. They also need to build relationships with suppliers to ensure transparency. In the short-term this is more expensive. In the longer-term, it leads to improved consumer confidence and can highlight areas where additional value – profitability or cost savings – can be made. For example Waitrose work with farmers to assist with the certification of organic produce, which has higher value to shoppers.”
He said the news that pork from Tesco bearing the Red Tractor logo – indicating that it is produced in the UK – originated in Holland, though unfortunate, was not unexpected.
“All firms use suppliers to provide products and services, creating complex, lengthy and opaque supply chains. They use suppliers to provide things that they deem to be ‘non-core’ while focusing their activities on areas that they excel at,” he added.
Tesco, as an example, is an excellent retailer not farmer. Raising and slaughtering livestock for meat is done by someone else. Apple is excellent at product design and marketing. Assembly of the various electronic devices is done by someone else. This specialisation allows firms to be more profitable and responsive but does have downsides.”
FA Gill denied that the pork could have been Dutch as the company did source its supply from the Netherlands.
