Reputation and Traceabilty of the Food Supply Chain
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Transcript of Reputation and Traceabilty of the Food Supply Chain
Linda Locke Principal
Traceability: The Key to Food Manufacturing Reputation
18 Sept 2013
Our ultimate business goal is to be trusted
Risk is predictable, if…. • You know your stakeholders • You understand what drives their
perceptions • You are aware of their values • You listen to them
Act With
integrity
A strong reputation can enable a company to succeed
v
Provided by Trust Across America
Based on: Financial stability Accounting conservatism Corporate integrity Transparency Sustainability
Reputation advantage
Reputare Consulting LLC Chart: Yahoo! Finance
Apple Stock Price vs. DJIA: 2007-2012
Reputation penalty
BP Stock Price vs. DJIA: 2007-2012
Chart: Yahoo! Finance
Reputation
• Customers • Suppliers • Investors • Advocacy groups • Regulators • Policymakers • General public
Reputation = judgments and perceptions of stakeholders
Why reputation matters
• The intangibles can comprise more than 60% of a company’s value
• Public perception impacts profitability, book value, sales • Strong reputation can result in strong stock price growth • Investors use reputation in purchase decisions • Companies with a strong reputation can:
• Charge premium prices • Hire the best candidates • Attract the best business partners
• A strong reputation can be a competitive differentiator
For the food industry: operations = reputation
• Industry focuses on both quantity and quality – Consumers want food that is safe, fresh, nutritious
• Supply chain integrity is not just about operations, but about reputation – Consumers reject products seen as harming the environment,
workers, and communities
• Companies that experience supply chain disruptions saw shareholder value drop; recovery can be lengthy
• Traceability is key; Consumers want to know the origin of food products, including location and life history
• Rapid response in a crisis is essential to protect reputation
The dimensions of reputation
How do you
make me feel?
Adapted from Reputation Institute
Supply chain integrity delivers reputation risk resiliency
• Two sides of risk resiliency: Preventing conditions of risk
Managing consequences of events
Source – Carnegie Mellon Software Engineering Institute
Risk = Hazard + Outrage
The causes of outrage
“Do I put up with this?”
Awareness Choice
Detectability
Pressure Groups Nature
Scientific View
Dread Media
Equity
Have I noticed pressure groups focusing on it?
Was there a problem? Did you let me know about it?
Did I choose to take the risk or was it imposed on me?
Is the risk natural or man-made?
Do I fear this risk?
Can I touch/see it? Is it quantifiable/ Containable?
What does the risk do for me? Is anyone bearing the risk who doesn’t benefit from it?
Do experts understand it? Do they agree/disagree about it?
Have I read about it/seen it in the news?
Three phases of outrage
Sloth
Greed
Pride
Wrath
Envy
Sloth
Lust
Young
Elderly
Human error
Media-attractive
Abuse of Power
Lack of Responsiveness
Impoverished
Many organizations are not prepared to manage reputation risk
Reputation literacy not on risk agenda
Risk literacy not on reputation agenda
Reputation competency requires the right tools and perspective
Data-driven insight
24 x 7 monitoring
Outside-in perspective
Willingness to engage, act
Enterprise-wide understanding
Protecting revenue
and reputation
Monitor how you are seen
Source: evolve24
Consider the role of emotion in stakeholder reaction
Source: evolve24
Know how you compare to your competitors
Source: evolve24
Traceability and transparency can help sustain the business
• Traceability enables recalls to be targeted to the origin instead of the entire industry… – Think spinach, peanuts and pistachios
• Full backward and forward traceability provides authenticity to claims of: – sustainability, – halal, kosher, allergens – safety – organic origin – Fair Trade
Supply chain integrity requires traceability
• Consumers expect manufacturers to be knowledgeable and forthcoming about the origin of food products, including location and life history
• In a crisis many stakeholders will hold the manufacturer, distributor, and grocer responsible for the entire supply chain
• A robust traceability program can enable rapid identification and containment of the issue – Protects the industry – Calms fears of consumers – Mitigates amplification by the media
Linda Locke Principal [email protected] Twitter: Reputationista 314-435-3428
Thank you. Corporate reputation consulting Reputation Strategy Reputation Risk Identification Measurement Internal Alignment External Engagement Crisis Management and Communications Strategic, Executive Communications