Sometimes The Truth Hurts.

Thursday, June 6, 2013 6:15
Posted in category From the Factory Floor

So, we all know that there are certain red lines in China that you just don’t cross, and it appears that the  ex – Fonterra head just crossed one when he told a group of people that:

China was full of surprises. “You’ve got to go and do business with your eyes wide open.”

Asked by an export manufacturer how small New Zealand businesses could ensure they were not ripped off when trading in China, Sir Henry said bad experiences should be used as opportunities to learn.

“That’s my point about China. You will be full of surprises. Don’t ever trust them…never..”

Honesty, as much as I empathize with him and the rest of the “poorly made in China” crew, the simple fact is that like so many before him (Mattel), and after (Yum), the system that he built failed him. It was a system, not all that unlike Yum’s, that had too many suppliers with too few equality control tests/ check points, and by the time the milk had gone bad there was little that could be done except call Beijing and ask for them to intervene.

A painful truth for Fonterra, and a HORRIBLE place to be in when tens of thousands of kids are ingesting your product, with my main point being that there are firms who invest in systems to mitigate risk and catch problems before they leave the factory and there are those that only find out about them when they pick up newspaper. And while investing into better systems does not guarantee 100% quality, it is an investment that provides a lot of advantages when it comes to identifying the problem early, shutting off the line (even if orders are lost), proactively communicating to stakeholders, and ultimately maintaining consumer confidence in your products.

Something I would hope others take away from this stories, and others like it, where you see an executive using the Chinese as their excuse for why THEIR product failed.

Sure their supplier failed, but it was their failure to keep the product out of the hands of their consumers that was the real problem.

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