The following commentary is the author’s guest blogger contribution to the Supply Chain Expert Community web site where it can also be viewed and commented upon.

Supply Chain Expert Community members probably know that this author has spoken and written about the emerging positive benefits in leveraging “systems of engagement”, the social media based systems that bring both people and teams together to solve problems or orchestrate more timely and informed decisions.  Unfortunately, like many things new, there can be a negative side to these systems, one that senior business and supply chain leaders need to consider.

Readers will recall the recent well-publicized incident concerning additives utilized in the production of beef hamburger in the U.S… A company Beef Products Inc. (BPI) developed a food product which makes ground beef leaner.  The product was called “lean finely textured beef” and many restaurant and food chains found the product to be innovative, enough to sustain a growing business and the need for four production facilities to support upstream customer demand.  Customers included very well respected brands to include Burger King, Kroger, McDonalds, Taco Bell and Wal-Mart. A man by the name of Eldon Roth, who founded BPI, has been inducted into the Food Industry Hall of Fame because of his recognized innovation in beef products and positive contributions to this industry.

Then, something went terribly wrong.  Many referred to the product as “pink slime” and that caught the attention of food and socially conscious bloggers. An online petition drive ensued to have the product banned from use by school children, and then traditional media, not to be undone by social media, began to run with the story of a potentially unsafe substance in hamburgers eaten by our children.

For a full account of all the details of this story, I recommend reading the April 16-29, 2012 Bloomberg Businessweek article, Was a Food Innovator Unfairly Targeted?  The article points out that at peak production last year, BPI produced over 500 million pounds of its product. Social media bloggers, with a motivated concern relative to what school children were being fed, leveraged the ugly negative connotations of “pink slime” to eventually influence many educational institutions, restaurants and food purveyors to ban the use of the product because of the public outcry relative to food safety.  The Businessweek article quotes Matthew Salganik, a Princeton University sociology professor noting: “Social media is something that adds oxygen to the environment… It increases the chance that a small spark will turn into a big fire.”

BPI however was and remains viewed as an industry innovator. Businessweek states: “BPI has been in the forefront of food safety in the beef industry for a decade or more.” In mid-March of this year, while insisting that the BPI product was safe, the U.S. Department of Agriculture indicated that it would let schools and other food purveyors elect whether to buy meat with or without the BPI textured meat additive. Although BPI began aggressive efforts to tell its side of the story, that being the positive benefits of their product, including initiating the web site, events cascaded beyond control and consumers elected not to allow their families to consume beef containing the BPI lean additive. BPI eventually had to close all but one of its plants and the negative connotations also affected other meat processing producers such as Cargill and AFA Foods. Hundreds of workers have since lost their jobs.

We at Supply Chain Matters submit that there is obvious important learning from this beef industry incident. Senior business and supply chain leaders cannot afford to ignore or dismiss what occurs on social media. Whether you embrace the power of “systems of engagement” or not, what occurs in social media can and will have an impact on either the business, or the way people, and especially your employees, gather and exchange information, and make conclusions. There are both positive as well as negative connotations to this reality.

In this commentary, we have highlighted the consequences of a negative connotation associated with a product, and how potential good intentions can spiral without offering factual education.  More importantly, it serves as a reminder that firms need to have designated people responsible for monitoring these systems, along with proactive strategies directed at both leveraging or mitigating any business impacts.  The obvious lesson is ignoring social media and “systems of engagement” as a well understood component of business practices is not wise given the highly mobile and social world that exists today. Representation of your product is managed by both traditional and social strategies. That is a new reality for business, and for supply chains that must respond to product management needs.

What is your firm’s strategy related to “systems of engagement”? Does your company view the positive benefits, as well as the potential impacts to business strategies?

Bob Ferrari