Choose your suppliers carefully

Every Pony Helps This morning the news broke that Irish food safety officials tested a sample beef burger from Tesco and found horse meat accounted for approximately 29% of the meat content.  Pig was also found in over 80% of the samples (arguably a more serious problem for those of a religious persuasion).

Tesco were quick to pull the affected (and related) products from the shelves, and the meat processing plants who supplied the burgers were also quick to make it clear they didn’t process horse meat.  The most likely culprit is thought to be the European third-party suppliers of bulk ingredients, but that doesn’t help Tesco’s PR team, nor does it do much to restore the trust their customers have in the brand.

It could be you

This is an important lesson for any IT department, as we all rely (to a greater or lesser extent) on suppliers of products or services to deliver a service to our customers.  It doesn’t matter whether its just a supplier of small components, critical infrastructure hardware, or services you rely on (like your network provider or utility supplier); ultimately if your service suffers because of their failure, then it’s still your fault.

In this scenario some IT departments lay the blame with their supplier, but the customer doesn’t care why it went wrong; it IS your fault, and it IS your job to fix it.  If I was to tell a customer a problem was caused by a supplier I’d be very careful to point out that the problem is still our responsibility, and make it clear efforts were being made to ensure the problem doesn’t happen again.

Fix the problem before it happens

I would expect Tesco to have a contract with the meat processing plants which supply the beef burgers, which stipulates the minimum standards the product has to satisfy.  In turn, that places an obligation on the suppliers to ensure their supply chain enables them to meet those standards.  In this case, the failure on Tesco’s part appears to be choosing the wrong suppliers, or their suppliers making the same mistake.  Whether Tesco could have picked up this failure by testing or auditing their suppliers is open to discussion.

The customer doesn’t care why it went wrong; it IS your fault, and it IS your job to fix it

One way to avoid this scenario is to choose your suppliers with care.  In many tender processes getting the price down is the most important thing, but there are other important steps to follow;

  • Check your suppliers references, preferably from companies in your sector (with the same priorities and pressures as you)
  • Look for differentials, the things one supplier does which makes your life easier, and the others don’t do
  • Make that the minimum standards the supplier has to meet are clearly stipulated in the contract
  • Get the supplier to agree penalty clauses for failure (meaning they are either confident failures won’t occur, or at least motivated to prevent them in the first place)
  • Don’t get locked into a contract with a failing supplier, make sure you can exit before the end of the contract term in certain scenarios without penalty clauses being invoked
  • Review the suppliers financial position and their track record, and if it’s important to you, their ethical standing

Remember, you might shave another £50,000 off the contract value by choosing the cheapest supplier, but how much will their failures cost you in the long run?

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