S w 9B02D020 UNIFINE RICHARDSON Professor Carol Prahinski prepared this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected] Copyright © 2002, Ivey Management Services Version: (A) 2009-11-30 On April 11, 2002, Rob Pincombe, purchasing manager at Unifine Richardson in St. Mary’s, Ontario, received a telephone call from Joanna Killian at Harrington Honey, his main honey supplier. Killian was calling to inform him that the Canadian Food Inspection Agency (CFIA) had recently found traces of chloramphenicol in Chinese honey. Not only that, but until China developed a reliable measure to test for the banned substance, its honey exports would be rejected in Canada and Europe. As Pincombe hung up the phone, he was particularly concerned about meeting his customers’ demands. His company relied heavily on honey imported from China, and his supplier’s Chinese honey inventory would be fully depleted by May 17, 2002. Unifine Richardson Unifine Richardson manufactured salad dressings, ice cream toppings, sauces and syrups on a three-shift operation with 110 employees. The company was a subsidiary of Cosun, a co-operative of sugar beet farmers based in the Netherlands with facilities throughout Europe and North America. The firm sold its products to the food service market (restaurants and caterers), retailers (chain stores and artisan producers) and industrial customers (food manufacturers). Unifine Richardson purchased approximately one million pounds of honey annually, representing three per cent to five per cent of the firm’s total expenditures. Almost all of its honey purchases were for a 50-50 blend of Chinese and Canadian honey that cost $1.08 per pound. Historical prices are shown in Exhibit 1. Harrington Honey purchased unpasteurized honey from a variety of farmers and international brokers. After the honey was pasteurized, it was sold in bulk to manufacturers and distributors, such as Unifine Richardson. Unifine Richardson transformed the bulk honey into smaller packages, each customized to customer specifications. Eighty per cent of the firm’s recent honey sales had been to one large franchise retail operator for use as dipping sauce for its fried chicken pieces o.

1. S w
9B02D020
UNIFINE RICHARDSON
Professor Carol Prahinski prepared this case solely to provide
material for class discussion. The author does not intend to
illustrate
either effective or ineffective handling of a managerial
situation. The author may have disguised certain names and
other identifying
information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction,
storage or transmittal without its written permission.
Reproduction of
this material is not covered under authorization by any
reproduction rights organization. To order copies or request
permission to
reproduce materials, contact Ivey Publishing, Ivey Management
Services, c/o Richard Ivey School of Business, The University
of
Western Ontario, London, Ontario, Canada, N6A 3K7; phone
(519) 661-3208; fax (519) 661-3882; e-mail [email protected]
Copyright © 2002, Ivey Management Services Version: (A)
2009-11-30

2. On April 11, 2002, Rob Pincombe, purchasing manager at
Unifine Richardson in St. Mary’s, Ontario,
received a telephone call from Joanna Killian at Harrington
Honey, his main honey supplier. Killian was
calling to inform him that the Canadian Food Inspection Agency
(CFIA) had recently found traces of
chloramphenicol in Chinese honey. Not only that, but until
China developed a reliable measure to test for
the banned substance, its honey exports would be rejected in
Canada and Europe. As Pincombe hung up
the phone, he was particularly concerned about meeting his
customers’ demands. His company relied
heavily on honey imported from China, and his supplier’s
Chinese honey inventory would be fully
depleted by May 17, 2002.
Unifine Richardson
Unifine Richardson manufactured salad dressings, ice cream
toppings, sauces and syrups on a three-shift
operation with 110 employees. The company was a subsidiary of
Cosun, a co-operative of sugar beet
farmers based in the Netherlands with facilities throughout
Europe and North America. The firm sold its
products to the food service market (restaurants and caterers),
retailers (chain stores and artisan producers)
and industrial customers (food manufacturers).
Unifine Richardson purchased approximately one million
pounds of honey annually, representing three per
cent to five per cent of the firm’s total expenditures. Almost all
of its honey purchases were for a 50-50

3. blend of Chinese and Canadian honey that cost $1.08 per pound.
Historical prices are shown in Exhibit 1.
Harrington Honey purchased unpasteurized honey from a variety
of farmers and international brokers.
After the honey was pasteurized, it was sold in bulk to
manufacturers and distributors, such as Unifine
Richardson. Unifine Richardson transformed the bulk honey
into smaller packages, each customized to
customer specifications. Eighty per cent of the firm’s recent
honey sales had been to one large franchise
retail operator for use as dipping sauce for its fried chicken
pieces on a “cost plus” basis, such as cost plus
15 per cent. The remainder was sold to other franchise operators
or used in smaller quantities, such as with
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Page 2 9B02D020
Unifine Richardson’s honey-mustard sauce. Pincombe knew that
these customers demanded product
consistency.
The Honey Industry
As shown in Exhibit 2, China, the United States and Argentina
dominated world honey production from
1997 through 2001. Each was a major exporter to Canada, which
itself was a major honey producer; in
2001, Canada was the 10th largest honey producer in the world.
As a commodity, honey pricing was
delineated based on its classification by color (water white
through dark amber), flavor (e.g., canola,

8. clover, mixed flowers), aroma and purity.
CFIA monitored food, animal and plant health to ensure that
producers and importers met federal
regulations for quality and safety. On March 8, 2002, the CFIA
modified the importation regulations for
pre-packaged and bulk honey from Greece, China and
Argentina. According to this report, the European
Union had imposed a ban on all animal products from China,
including honey, because of concerns with
China’s lack of controls over veterinary drugs. Recent CFIA
sampling of both Greek and Chinese products
had revealed adulteration of the honey with veterinary drugs. In
addition, the United States had imposed an
anti-dumping tariff on honey from both China and Argentina
and needed to ensure that honey would not be
diverted from these two countries to Canada for re-export to the
United States.1 The CFIA report noted
that, in Canada, all Greek and Chinese honey would be
inventoried and detained pending receipt of
laboratory results, to take no more than 20 days. The
Argentinean honey would be tested but could be
released prior to the lab results. If samples were found to be
non-compliant, CFIA would determine the
most appropriate action, which could include fines, marketplace
removal and return of the contaminated
honey to the country of origin, all at the manufacturer’s
expense.
Upon reading the regulation notice in early March, Pincombe
called Harrington Honey, its single-source
supplier of the Chinese-Canadian blend, to obtain that
company’s reaction. He was assured that the supply
would be neither affected nor disrupted. According to the CFIA
report and Harrington Honey, the CFIA
did not even have a means to analyse evidence of some drugs,

9. such as chloramphenicol.
Chloramphenicol
Chloramphenicol was an antibiotic that had been approved for
human use in Canada only as a last-resort
drug treatment in life-threatening bacterial infections. It had
been banned for use in food-producing
animals in many countries because it was found to be associated
with aplastic anemia in a small percentage
of cases. Aplastic anemia is a serious blood disorder that is
usually fatal in severe cases.2
Pincombe believed that because honeybees were typically
resistant to antibiotics, the Chinese had used this
strong antibiotic to remedy a contagion in the Chinese honeybee
population. Pincombe believed that the
Chinese government had not considered the repercussions
associated with the antibiotic. Pincombe heard
estimates that it would take about 15 months to eliminate the
chloramphenicol traces from the beehives.
1Dumping is defined as selling goods below cost in selected
markets (APICS 10th Annual Dictionary). At the instigation of a
U.S. industry, the U.S. Department of Commerce, with
consensus from the International Trade Commission, imposed
antidumping tariffs on selected imported products in an effort to
protect the U.S. producers from unfair price competition.
2Source: Gordon L. Coppoc, Chloramphenicol and Relatives,
Purdue Research Foundation, 1996.
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Page 3 9B02D020

14. In early April, the Canadian government developed a way to
measure chloramphenicol. Almost
immediately, a honey shipment from China destined to a
competitor of Harrington Honey was found with
a residue greater than the legal limit of 0.001 parts per million
(ppm).
The Phone Call
On April 11, 2002, Killian called to announce that Harrington
Honey had decided to discontinue importing
Chinese honey until China had developed a means to test for
chloramphenicol and could thereby detect and
reject contaminated honey. Killian expected that Harrington’s
inventory of Chinese honey would be fully
depleted by May 17, 2002. However, because of possible
consumer product recalls, the supplier
recommended that its customers immediately switch to an
alternative source and proposed three main
options: a 100 per cent pure Canadian honey, a 100 per cent
pure U.S.A. honey, or a 50-50 blend of
Canadian-Argentinean honey. Killian was quick to note that
because the available supply of honey on the
world market had decreased by approximately 20 per cent, the
prices for the non-Chinese honey had gone
up significantly. In addition, there were concerns about product
availability regardless of price. And
finally, Killian suggested that Pincombe consider a long-term
contract to lock down on a specific price.
Killian provided the following prices: The 100 per cent
Canadian honey was available at $1.75 per pound;

15. the 100 per cent U.S. honey was available at $1.10 per pound in
U.S. dollars;3 the 50-50 Canadian-
Argentinean honey was available for $1.42 per pound.
As Rob Pincombe hung up the phone, he wondered what he
should recommend. His largest honey
customer was known for having tough standards and purchased
many Unifine products besides honey. In
addition, he believed that the Canadian-Argentinean blend did
not taste as good as the pure Canadian or
pure U.S. honey and that his customers would probably agree
with him. Pincombe figured he had about
one day to make his decision and act on it.
3 In April 2002, the United States dollar was equivalent to
approximately $1.63 Canadian dollars.
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Page 4 9B02D020
Exhibit 1
HONEY PRICES
Exhibit 2
INTERNATIONAL HONEY PRODUCTION

20. Source: Food and Agricultural Organization of the United
Nations, 2002.
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OPER8080: Capstone Project (Supply Chain Management–
Global)
Individual Assignment (30%)
Instructions
Purpose & Learning Outcomes: The purpose of this ‘applied
learning’ assignment is to give you a practical opportunity to
independently apply your supply chain management knowledge
and skills (incl. concepts, methods, techniques, tools, etc.)
gained from the various program courses, and learn how to
critically and analytically:
· Examine given information/data about a company, its supply
chain, business environment, challenges and situation
· Conduct research (as needed) to collect any additional
required or useful information/data
· Identify the firm’s key supply chain issues and opportunities
for improvement
· Analyze their impacts and root causes
· Accordingly devise the best strategies and solutions that will

28. enable the company to resolve the issues (by tackling the root
causes) and realize the opportunities
· Evaluate and demonstrate the value added to the business by
implementing your recommended strategies and solutions
Due: Week 6 – before class
Deliverable/Requirements: Based on your analytical study of a)
the provided case and b) additional secondary research as
needed, prepare a professional Supply Chain Improvement
Report as follows:
· Word document with line spacing 1.5 or 2, font Calibri or
Arial
· 4-6 pages + cover page, table of contents, appendices (no page
limit), references
· In line with the general indicativeReport Contents provided
below – feel free to adapt and make changes to the section
headings and content as needed and appropriate
· Provide a high-quality report that clearly demonstrates your
achievement of all learning outcomes outlined above
· Have a logical flow and consistency (no contradictions)
· Be professionally written using business English, with no
errors in spelling, grammar, sentence structure, punctuation,
etc.
· Contain proper citations and references as per
[email protected]
· Marks will be deducted for not following/demonstrating the
above requirements
See next page for Report Contents
Report Contents (indicative approx. page length)
Cover Page (incl. company name, appropriate report title, date,
course & student info, etc.)
Executive Summary (0.5-1 pg)
Write this section last, after completing all other sections.

29. Provide a brief summary of only the most important aspects of
your report, including:
· company profile and its supply chain context/situation
· key supply chain issues and improvement opportunities, and
their significant impacts on the supply chain and business
performance
· objectives and targets for resolving the issues and improving
supply chain & business performance
· effective strategies and solutions recommended to achieve the
above objectives and targets
· demonstrate how your recommended strategies and solutions
will enable the company to resolve the key issues, achieve the
improvement objectives and targets, and add value to the
business
1. Introduction (~0.5 p)
· Provide a brief background on the company and its supply
chain context, incl. internal situation, external business
environment, and supply chain challenges
2. Supply Chain Issues & Improvement Opportunities (0.5-1 pg)
· Based on your examination of the case, identify and clearly
describe the key supply chain issues (problems/challenges) and
improvement opportunities (what can be improved) – Max. 3
· For each issue, describe its actual negative impacts on the
supply chain and business performance
· For each improvement opportunity, describe its potential
positive impacts on the supply chain and overall business
performance
3. Analysis of Key Issues & Opportunities (1-2 pg)
· For each key issue, perform and present a thorough critical
analysis of its root causes using the various methods/tools you
have learned about in your various courses
· For each key improvement opportunity, describe how you
identified it as an opportunity and/or what factors
caused/created it
4. Improvement Objectives (~0.5 pg)
· For each key issue / improvement opportunity, based on your

30. above analyses, define ‘SMART’ objectives, including key
performance indicators (KPIs) and targets (max. 3), that will
enable the company to effectively and sustainably resolve the
issue and/or improve the supply chain and overall business
performance
5. Strategies &
Solution
s (1-2 pg)
· For each of the above objectives and targets, based on your
above analyses, devise and describe the best strategies and
solutions/actions that will enable the company to effectively
and sustainably resolve the issues, realize the opportunities, and
achieve the objectives and targets
· While devising your strategies and solutions, take into
consideration the company’s key stakeholders and any relevant
‘triple bottom line’ (environmental, social, economic) aspects
that could create value/benefits for the key stakeholders, and
ultimately contribute to the company’s long-term sustainable
success. If you find any such relevant aspects, incorporate them
into your recommended strategies and solutions.
· Demonstrate the value added to the company’s supply chain
and overall business performance by implementing your above
recommended strategies and solutions. To the extent possible,
provide a simple Cost-Benefit Analysis of their quantitative

31. (financial, etc.) costs and benefits/value, as well as qualitative
pros and cons.
Appendices (no page limit)
· Provide supporting and relevant additional data, information,
evidence, tables, charts, examples
References (as per [email protected])
Page 2 of 2