Wednesday, 30 January 2013

On a wing and a prayer: lessons from Burgergate

I discussed the Tesco's horsemeat mess, now known as 'Burgergate', a few days ago. A procurement mess which has led to procurement being discussed at 'the top table', family dinner tables and restaurant tables the length and breadth of the country.

It's featured on every main UK news channel (even on Sky News as I write). Today it was trotted out in a webinar I was taking today with colleagues in India and USA.  It is now though Horseburgers could have been on the UK plate for at least a year. Burgergate has cost Tesco around £1m so far.

Be careful what you wish for when you want a higher profile for a profession!

I won't cover the issues discussed in today's excellent Channel 4 News blog - certainty worth a read. It is also worth having a look at the statement issued by Tesco today, one statement itself is interesting:
"The evidence tells us that our frozen burger supplier, Silvercrest, used meat in our products that did not come from the list of approved suppliers we gave them," 

Let's remember that Burgergate was concerned with more than Tesco - other food retailers were also in the manure.

Today Tesco's announced that:
  1. The supplier thought to be at fault has lost their business - the implication is that Tesco brought in a poor supplier;
  2. The horsemeat came from outside the UK and Ireland - the implication, given that this could have gone on for more than a year, is that Tesco really don't know what they have been buying or its source or whether potentially dangerous food could be on their shelves;
  3. The supplier deemed 'at fault' had not used a source from Tesco's approved list - the implication is that 1st and 2nd tier supplier vigilance and performance management was lax;
  4. Tesco will be putting in new food quality assurance measures - the implication being that we should believe the new systems will work even though the previous responses to CJD etc didn't. 
I suppose we should say all well and good, but there are some lessons applicable to us all:
  • Are we as confident as we should be with the procurement approach to selecting suppliers? It's all well and good blaming the supplier for not sticking with the approved list, but the fact that a supplier, brought in through the procurement process couldn't be relied upon does place procurement processes in the frame too;
  • Are we confident that we have actually identified procurement risks and are managing them?
  • When we issue approved lists or even nominated suppliers, how confident can we be that that's what are actually used?
  • How confident are we will quality assurance and performance management systems? 

Don't get me wrong, procurement are not solely to blame for Burgergate but procurement does need to learn from the lessons and help sort out the fallout.

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