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Reputation and Traceabilty of the Food Supply Chain

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Part of a webinar sponsored by Food Manufacturing magazine in September 2013. Event called: Food Safety & Traceability: Supply Chain Visibility from Farm to Fork

Part of a webinar sponsored by Food Manufacturing magazine in September 2013. Event called: Food Safety & Traceability: Supply Chain Visibility from Farm to Fork

Published in: Business, Technology
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  • 1. Linda Locke Principal Traceability: The Key to Food Manufacturing Reputation 18 Sept 2013
  • 2. 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
  • 3. 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
  • 4. Reputation advantage Reputare Consulting LLC Chart: Yahoo! Finance Apple Stock Price vs. DJIA: 2007-2012
  • 5. Reputation penalty BP Stock Price vs. DJIA: 2007-2012 Chart: Yahoo! Finance
  • 6. Reputation •  Customers •  Suppliers •  Investors •  Advocacy groups •  Regulators •  Policymakers •  General public Reputation = judgments and perceptions of stakeholders
  • 7. 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
  • 8. 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
  • 9. The dimensions of reputation How do you make me feel? Adapted from Reputation Institute
  • 10. 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
  • 11. Risk = Hazard + Outrage
  • 12. The causes of outrage Do I put up with this? Awareness Choice Detectability Pressure Groups Nature Scientific View DreadMedia 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?
  • 13. Three phases of outrage Sloth Greed Pride Wrath Envy Sloth Lust Young Elderly Human error Media-attractive Abuse of Power Lack of Responsiveness Impoverished
  • 14. Many organizations are not prepared to manage reputation risk Reputation literacy not on risk agenda Risk literacy not on reputation agenda
  • 15. 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
  • 16. Monitor how you are seen Source: evolve24
  • 17. Consider the role of emotion in stakeholder reaction Source: evolve24
  • 18. Know how you compare to your competitors Source: evolve24
  • 19. 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
  • 20. 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
  • 21. Linda Locke Principal Linda.Locke@ReputareConsulting.com 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 


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