minimum 6 pages. Scenario This is a true story that dominated the media in Canad

Question

minimum 6 pages.

Scenario This is a true story that dominated the media in Canada in the summer of 2008 and shook an established and trusted company to its core. Once the crisis was over, 22 people had died as a result of tainted meat. More details are easily available online but the following is from an April 2013 Financial Times article. The Story Maple Leaf Foods is one of the leading food processing companies in Canada, where many of its processed meat brands are household names. The company also supplies restaurants and hotels. The Challenge On August 12 2008 management became aware of a possible case of listeriosis contamination at one of its meat processing plants near Toronto. By August 23 the contamination had been confirmed and by the end of September more than 20 people's deaths had been linked to the listeriosis outbreak associated with Maple Leaf Foods. Many more fell ill. The Canadian press attacked the company and a number of class-action lawsuits were launched on behalf of victims and their relatives. Consumers started to avoid Maple Leaf brands, and trade customers began switching to other suppliers The Response Maple Leaf Foods responded swiftly. All products from the affected plant were recalled as soon as the presence of listeriosis was confirmed. Michael McCain, chief executive, took personal charge. He later told the Toronto Globe & Mail that in his handling of the crisis, "there are two advisers I've paid no attention to. The first are the lawyers, and the second are the accountants." His public offer of a full apology and acceptance that Maple Leaf Foods was solely responsible was considered a bravedecision because it left the company open to legal action. Mr. McCain accepted this risk: the point was to act first in the interest of public health and then to be open and transparent. The management dealt with the crisis on a number of fronts, including PR, strategy and restructuring.

Explanation / Answer

1. Appraisal cost :

This is cost incurred in measuring and controlling current production to assure conformance to requirements, such as -

A. Purchasing Appraisal Cost :

# Receiving or incoming inspections or test : Maple leaf foods, products should undergo strict inspection before packaging

# Qualification of Supplier Product : As far as raw materials are concern, products supplied through external suppliers needs to be tested before processing further

B. Operations Appraisal Cost :

# Product or service quality audits : Regular audits needs to be done so as to improve quality of product.

# Inspection and test Material : Processed meat should go through special tests.

2. Prevention cost :

It is costs incurred to prevent the occurance of non-conformances in the future such as -

A. Product Development :

# Product qualification test : Meat should be free of any listeriosis contamination.

# Field Test : Test in the meat processing plants.

B. Purchasing :

# Supplier Reviews : Keeping close eye on the reviews of the suppliers

# Supplier Ratings

# Purchase order tech data reviews.

3. Internal Failure Cost :

These are costs generated before a product is shipped as a result of non-conformance to requirements such as -

A. Product failure cost : As processed meat was contaminated resulted in failure cost such as -

# Corrective actions to remove contamination

# Reproduction and throwing previous processed meat in scarp

B. Purchasing failure cost :

# Purchased meat replacement cost

# Uncontrolled material losses

C. Operational failure cost :

# Troubleshooting issues in the plant of production

# Investigating the rootcause cost

4. External Failure Cost :

Cost generated after a product is shipped as a result of non-conformance to requirements such as -

A. Complaint Investigation cost incurred by the company

B. Penalties :

# Cost incurred for legal action on the company

C. Lost Sale :

# As company image was damaged in public eye, they lost sale of the product

Analysis :

# Canada's most respected food processing company, Maple Leaf Foods reputation rapidly dissipated when it was announced that a bacteria had not been detected by its inspection process. It resulted in damaging company reputation as well as market share as other competing products quickly filled the void.

# Despite Maple Leaf Foods commitment to its stringent food safety procedured failed to identify a bacteria which led to death of 20 people

# It was traced at Maple Leafs Toronto plant. Here a root cause to develop a bacteria is not cleaning of equipments properly which led to grow contamination that cause illness

# The company's response to the crisis has been fascinating as once it became clear that Maple leaf foods was linked to outbreak, Mr. McCain wasted no time in getting out in front of the media and telling the company's side of story

# Maple Leaf Foods was able to manage an agenda in terms of media content of the crisis, further four key communication themes emerged : product safety, Government Investigation, Corporate Reputation and Product Reputation

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.