Week 4 Tutorial:

Supply Chain Management

Sustaining Organisational Performance

Session Outline

• Discuss in small groups the factors that a small

shopkeeper should consider when choosing a

supplier

• Discuss the complexity of the supply chain and

related issues in the 2013 horsemeat scandal

and reflect on lessons learnt (or not) for the

current car makers crisis cheating emissions

targets

Discussion 1: “Supplier selection for a

small shopkeeper”

In small groups discuss:

• What factors should a small shopkeeper consider

when choosing a supplier?

• You may also consider: How much supply (of single

or multiple items) should be dedicated to a single

supplier?

Discussion 1: “Supplier selection for a

small shopkeeper”

• Price

• Quality

• Delivery

Discussion 2a: Horsemeat Scandal

Watch: Horsemeat scandal: what are we eating?

https://youtu.be/C1yMZWeBXUg

Lawrence, Allen and Scruton suggest in The Guardian (Tuesday, 22nd

October 2013, Accessed 29/09/15) ‘the web of companies is so complex

that pinning down the point at which the crime of mislabelling took place

in the horsemeat scandal has proved elusive’.

1. Identify the key players involved in this scandal from “hoof to

plate” and consider how this process is regulated.

2. What are your thoughts on what went wrong based on your

understanding of global supply chains?

See: Lawrence, F., (15/02/2013), Horsemeat scandal: the essential guide, The

Guardian (Accessed: 29/09/12),

http://www.theguardian.com/uk/2013/feb/15/horsemeat-scandal-the-essential-guide

Complex?

Regulation in the meat industry

• Licensed slaughterhouses across Europe are required to have an official vet

in attendance when slaughtering takes place – in the UK most used to be

directly employed by the government but many are now supplied under

contract to the Food Standards Agency by the private company Eville &

Jones.

• Plants over a certain size are also required to have a meat hygiene inspector

• A trend to deregulate and leave industry to police itself, begun under the last

government

• Smaller cutting plants are no longer subject to daily inspection

• The Food Standards Agency has limited powers – it has depended on

industry alerting it to the results of tests voluntarily

• Enforcement largely falls to individual local authorities and their trading

standards officers, and their budgets have been slashed

Extracted from: Lawrence, F., (15/02/2013), Horsemeat scandal: the essential guide, The Guardian

(Accessed: 29/09/12), http://www.theguardian.com/uk/2013/feb/15/horsemeat-scandal-the-essential-

guide

Government control of food safety and

standards

• Food standards agency set up after the BSE crisis

• Need one agency that coordinated all regulation on food safety and quality

• The coalition government broke up much of the FSA in its bonfire of the

quangos, so that responsibility in the current scandal is split.

• The FSA is still in charge of food safety;

• The Department of Health is responsible for nutritional standards;

• The Department for Environment, Food and Rural Affairs covers labelling and

veterinary medicines.

Extracted from: Lawrence, F., (15/02/2013), Horsemeat scandal: the essential guide, The

Guardian (Accessed: 29/09/12), http://www.theguardian.com/uk/2013/feb/15/horsemeat-

scandal-the-essential-guide

Traceability in a meat supply chain

• Industry argues full traceability of its supply chain which it audits

frequently

• Most of the factories caught up in the scandal have accreditation with

mainstream auditing schemes such as that run by the British Retail

Consortium but it failed to spot the problem

Extracted from: Lawrence, F., (15/02/2013), Horsemeat scandal: the essential guide, The

Guardian (Accessed: 29/09/12), http://www.theguardian.com/uk/2013/feb/15/horsemeat-

scandal-the-essential-guide

Discussion 2b: Horsemeat scandal

Watch Prof. Mohan Sodhi response on the question posed: Are

overstretched supply chains to blame for the horsemeat scandal?

Watch: https://youtu.be/e5G3MzjEwXs

“We [with reference to Audi & Tesco] have no idea what we are selling

you” Professor Mohan Sodhi

Provide your own thoughts on the question above and reflect on

any potential lessons learnt at all for the current automotive crisis

(i.e. VW emissions testing scandal)?

What crisis might be next?

Comment & reflections – impact on global

supply chains

• A survey by the Chartered Institute of Purchasing and Supply (CIPS)

argued that supermarkets have “fallen woefully short” in the

management of their supply chains.

• Is it simply down to poor regulation of supply chains?

• Are supply chains as Professor Mohan Sodhi puts it ‘overstretched’?

• What we do know is that the scandal will and has to date had a

significant impact on global supply networks and how we perceive

industries such as the meat processing industry.

Comment & reflections – next crisis?

• It was reported in The Telegraph (Lawrence et al., 2013) that Tesco would

pledge to open up its supply chain after the horsemeat scandal, but do we

know any more?

• Has the Horsemeat scandal been forgotten?

• Did it change the way we think about food and what we consume?

• What about ensuring transparency and traceability in ‘free-from’ food products

or even ‘Halal’ processed foods?

• Can we actually be sure that Body Shop suppliers, including the ‘suppliers,

supplier’ has not at any stage of the process tested on animals?

• Are we 100% sure that fair trade coffee is exactly that – fair trade?

• We have learnt a great deal over the past few weeks regarding the crisis in

the car industry with Volkswagen cheating emissions performance targets

Many were surprised – what’s next?

Comment & reflections – building resilient

supply chains

• Christopher and Peck (2004) wrote an interesting seminal article on

‘Building the resilient supply chain’

• Raised the issue that supply chain vulnerability has became a

significant issue particularly as supply chains become more complex

as a result of global sourcing and the continued trend to ‘leaning-

down’. Christopher and Peck (2004) argue that this leads to an

increase in supply chain risks.

• They ask how organisations can mitigate these risks by creating more

resilient supply chains

Worth a read to broaden your horizons …

Assessment guidance

• 3000 (+/- 10%) word report contributing 50% to your final grade on the SOP module

• Deadline: Friday 30th October (Week 8) by 1pm

Prior Reading

• You should read the case study entitled ‘Carmakers out of crisis?’

posted on Moodle

Task

• In small groups discuss the nature of the assignment brief and

offer advice to classmates on how to tackle the questions set

Context

Recent signals seem to show a dramatic improvement in car sales in the

UK as well as output. Manufacturing is beginning to boom once more in

the US and the UK is catching up. However, some major challenges still

remain as well with some manufacturers still facing particular difficulties

(e.g. Ford, Vauxhall, Volkswagen).

• You have been appointed as a Senior Consultant to a major UK/EU

car manufacturer of your choice to write a short business report

to the Board of Directors.

– Ensure you understand what is meant by a ‘report’

– Understanding the ‘intended reader(s)’ is critical in report writing

(i.e. the Board of Director’s of an automotive company)

Assessment briefNote: weightings for comprehension & analysis

1. Critically assess the lessons that have been learnt and influence that the

Japanese car manufacturers have had on the organisational performance of

UK/EU automotive manufacturers

a) Lean thinking [30% total weighting]

b) Quality & environmental sustainability leadership [15% total weighting]

2. Investigate the challenges and pressures faced by UK/EU automotive

manufacturers to globally source supplies from low-cost countries (i.e. BRIC

countries) [15% total weighting]

3. Make recommendations on the performance objectives that should be

adopted to ensure that the chosen carmaker can remain competitive in the

face of competition of producers in low cost countries [15% total weighting]