In a recent Spend Matters post, Jason Busch called attention to a Forbes.com commentary article titled Safety First Abroad, which clearly addresses the growing issue and concern for the need for a supply chain risk management strategy when presented with a growing global supply chain. Jason within his post encourages the procurement community to step up to the plate and invest in supply risk and performance management solutions that go beyond just simple scorecarding of suppliers. I would agree.
But this Forbes article brings to light an even more important take-which has been often reinforced for manufacturers and retailer readers of Supply Chain Matters. Outsourcing, either raw materials, finished goods, or contracted manufacturing within your global based supply chain does not absolve any organization from its ultimate responsibility for product quality and safety. Just follow the multiple posts on this site tracking the issue of Heparin contamination. This is not just a technology and/or tool consideration, but also an issue of overall management and accountability culture.
“When companies had integrated vertical manufacturing processes, they were responsible for what went out the door” author Ben Heineman, Jr. points out in his article. “The “deverticalization” of the production process through off-shoring and outsourcing doesn’t-or shouldn’t-change that ultimate responsibility.”
In other words, companies should not assume that risk is also something that can be outsourced.