Many corporations post in their news releases and annual reports that they embrace sustainability and corporate social responsibility. As responsible consumers, we invest in those corporations and buy their products. As we know, from companies like Chipotle, who truly think they are conscientious and are providing healthy food, if the investment in a sound chain of custody process and policy are not embedded, disaster may strike. A Bloomberg article on Chipotle highlights that the cost of building the right process will be very expensive and take a long time.
Monday, shares of Lumber Liquidators tumbled more than 19 percent after the CDC said people exposed to certain types of the company’s laminate flooring were more likely to get cancer than it previously predicted. The road to recovery will be very rocky for them for sure.
I have long said that companies need to implement a robust chain of custody process for their supply chains. To put it simply, the chain of custody is the unbroken path from the first stage of the supply chain to the end customer. The chain of custody is a key area were food and other supply chains lack process, focus, procedure, systems and audit capability. Without it, they can be inviting regulation, which is not a desired outcome from the company’s perspective. Because there is no traceability from point-of-origin to point-of-consumption, it takes regulators a long time to reverse track the chain of custody when there’s an incident involving personal injury, illness or harmful chemicals found in the product. The chart below identifies a simple six-step process that companies should consider to identify, maintain and track the chain of custody.
Chain of Custody Process
To learn more about the steps, there’s a description in this article I wrote for Food Safety magazine.
The end result is that chain of custody requires systems, processes, audits, training and additional people to manage and document the chain of custody. The pharmaceutical and aerospace industries have perfected this to assure regulatory compliance. If the food and other industries fail to self regulate, the government will step in. Sadly, most companies are not willing to make the investment before a catastrophic event causes negative publicity, tanked stock prices and lawsuits; then it may be too late for the business to recover.
The days of lip service to sustainability and social responsibility will catch up to companies that cannot track their products through the supply chain.
Isn’t it time to make that investment?