Horse burgers? When supply chains become mane news…

Darragh McCarthy 22.01.2013

Media reports about equine DNA found in beef burgers shocked many, and brings into focus the potential dangers of overextending or not properly controlling your supply chain.

In what remains a challenging and highly competitive global economic climate, supply chain efficiencies are one of the best ways to gain a competitive advantage, and more and more companies continue to change their supply chain cost structures by increasing the use of third party or outsourced manufacturing models.

Irish manufacturing in particular has seen a noticeable trend towards outsourced manufacturing over the past few years, and this will continue at pace in the years to come; not only in the food industry, but also in pharmaceuticals, medical device and consumer electronics.

This has presented a number of challenges for companies' supply chains, but also some interesting opportunities for supply chain professionals with the right skill-set and experience.

Supply chain and quality assurance are the two functions with most responsibility when it comes to properly managing what is received, and how, from contract manufacturers. What is key is gaining visibility into production methods and quality issues within contract manufacturing sites, which may or may not be based abroad, so that products of unacceptable quality can be prevented from entering the inbound supply chain. 

Many companies find that their contract manufacturer may be using the same plant to manufacture products for multiple customers and because of this, find it difficult to support diverse quality systems and expectations. Horse meat is widely eaten in other European countries but not in Ireland and the UK, where the majority of consumers were horrified.

Where this all leads to interesting opportunities for supply chain professionals now however is in managing these contract manufacturers. Over the past year we have seen a noticeable increase in demand for supply chain professionals with experience in this area. Food, pharma and medical device companies have shown an increase in vacancies for supplier relationship managers and CMO technical managers. For most however, it has remained the responsibility of procurement to select the right suppliers and to manage the SLAs and relationship thereafter with the necessary technical support from their quality function.

Otherwise you could have a horse inside.

Darragh McCarthy's picture
Associate Director | Supply Chain & Procurement
dmccarthy@morganmckinley.ie